| Metric | Current Period | Prior-year Period | YoY |
|---|---|---|---|
| Revenue | ¥387.3B | ¥387.8B | -0.1% |
| Operating Income | ¥7.1B | ¥21.4B | -66.7% |
| Ordinary Income | ¥9.5B | ¥23.7B | -59.9% |
| Net Income | ¥6.2B | ¥16.3B | -62.3% |
| ROE | 3.4% | 9.4% | - |
For FY2026 Q3 (cumulative), Revenue was ¥387.3B (YoY -¥0.5B, -0.1%), essentially flat, while Operating Income was ¥7.1B (YoY -¥14.3B, -66.7%), Ordinary Income was ¥9.5B (YoY -¥14.2B, -59.9%), and Net Income was ¥6.2B (YoY -¥10.1B, -62.3%), showing a significant deterioration in profitability. Gross Profit Margin declined to 24.6% from the previous year, and the SG&A ratio rose to approximately 22.8%, pushing the Operating Margin down to 1.8%. The Equity Ratio stands at 59.5%, indicating maintained financial soundness; however, short-term borrowings surged to ¥34.1B (+93.8% YoY), and accounts receivable expanded to ¥82.8B (+44.0% YoY), revealing issues in working capital management and short-term liquidity. The Full Year outlook assumes a recovery in the second half with Revenue of ¥510B, Operating Income of ¥11.0B, and Net Income of ¥9.0B.
[Profitability] ROE 3.5% (a sharp decline from 5.8% in the prior year), Net Profit Margin 1.6% (down -2.6pt from 4.2%), Operating Margin 1.8% (down -3.7pt from 5.5%), and an EBIT margin of 1.8% indicate a rapid deterioration in operating profitability. DuPont analysis shows Net Profit Margin 1.6%, Total Asset Turnover 1.29x, and Financial Leverage 1.68x, with the primary driver of the ROE decline being the substantial deterioration in Net Profit Margin. The 24.6% Gross Profit Margin is at the lower bound for the food industry, and SG&A of ¥8.84B (SG&A ratio 22.8%) is pressuring profits. Interest Coverage is 26.4x, indicating a light interest burden, but the low Operating Income highlights a fragile earnings base. [Cash Quality] Cash and cash equivalents are ¥3.12B, and short-term debt coverage is 0.3x, leaving a limited liquidity buffer against ¥9.74B in short-term liabilities. Accounts receivable are ¥8.28B with DSO of 78 days, confirming elongated collection; working capital is ¥6.12B and has expanded versus the prior year. The sharp increase in short-term borrowings to ¥3.41B suggests pressure from working capital and tighter funding. [Investment Efficiency] Total Asset Turnover is 1.29x, with the estimated ROIC at a low level, indicating weak capital efficiency. [Financial Soundness] Equity Ratio 59.5%, Current Ratio 157.4%, and Quick Ratio 122.6% indicate that payment capacity remains at a healthy level. The Debt-to-Equity Ratio is 0.25x, reflecting low leverage; however, the Short-term Debt Ratio of 77.3% signals a high dependence on short-term debt, warranting attention to refinancing risk.
Due to the absence of detailed disclosure on Operating Cash Flow (OCF), investing cash flow, and financing cash flow, funding dynamics are inferred from balance sheet trends. Cash and deposits edged down by ¥0.02B YoY to ¥3.12B, while accounts receivable increased by ¥2.53B, accounts payable by ¥1.39B, and short-term borrowings by ¥1.75B, indicating that the deterioration in working capital due to delayed receivables collection is being financed by short-term borrowings. Working capital expanded to ¥6.12B, and the elongated DSO of 78 days is straining liquidity. The sharp increase in short-term borrowings to ¥3.41B (+93.8% YoY) likely covers funding needs amid limited prospects for operating profit growth, raising concerns about declining cash generation from operations. While the Current Ratio of 157.4% indicates maintained short-term payment capacity, the short-term debt coverage of 0.3x reflects a thin cash buffer, elevating repayment pressure and refinancing risk. The increase in accounts payable may reflect changes in procurement terms or higher purchases, but it is insufficient to offset the rise in accounts receivable, and net working capital is deteriorating.
Against Ordinary Income of ¥9.5B, Operating Income was ¥7.1B, implying a net non-operating gain of approximately ¥2.4B. Netting non-operating expenses of ¥0.4B against non-operating income of ¥2.8B boosted Ordinary Income; this likely includes items such as interest and dividend income, foreign exchange gains, and gains on sales of investment securities. Non-operating income accounts for 0.7% of Revenue and is likely composed primarily of financial income and equity-method income. In the absence of OCF disclosure, the linkage between Operating Income and cash generation cannot be confirmed; however, the sharp rise in accounts receivable (+44.0%) and higher short-term borrowings suggest that profits are not sufficiently translating into cash. As underlying operating earnings power weakens, dependence on non-operating items is relatively increasing, raising questions about the sustainability of the earnings structure. The 1.8% Operating Margin corresponds to a warning for deteriorating EBIT margin, making the rebuilding of the recurring operating earnings base an urgent task.
[Industry Positioning] (Reference information, in-house research) Profitability: ROE of 3.5% significantly underperforms the food industry median of 5.2%, placing the company in the lower tier. Net Profit Margin of 1.6% (industry median 3.4%) and Operating Margin of 1.8% (industry median 4.9%) are both below medians, indicating inferior profitability within the industry. Return on total assets is estimated at around 2.0%, below the industry median of 2.6%. Soundness: The Equity Ratio of 59.5% is above the industry median of 48.0%, with financial soundness above the industry average. The Current Ratio of 157.4% is close to the industry median of 176%, preserving short-term payment capacity. However, the high Short-term Debt Ratio is a risk factor even within the industry. Efficiency: Total Asset Turnover of 1.29x far exceeds the industry median of 0.61x, indicating relatively favorable asset efficiency. Meanwhile, Days Sales Outstanding of 78 days exceeds the industry median of 71 days, indicating slower collection. Days Payables Outstanding is about 95 days, exceeding the industry median of 64 days, implying longer payment terms; however, the increase in receivables is worsening net working capital. Inventory days are around 35 days, below the industry median of 51 days, indicating good inventory efficiency. Growth: Revenue growth of -0.1% is below the industry median of +3.8%, indicating stalled growth. EPS growth of -62.3% is significantly negative and diverges markedly from the industry median of +16%, placing the company near the bottom of the industry. Industry: Food (N=13 companies); Comparison period: 2025-Q3 (equivalent to FY2026 Q3); Source: In-house aggregation
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. The industry benchmarks are reference information aggregated by our company based on publicly available financial statements. Investment decisions are your own responsibility; consult a professional as needed before making any decisions.