ROCK FIELD CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥25.06B
• Operating Income: ¥84M
• Net Income: ¥110M
• EPS: ¥-3.84

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Rock Field Co., Ltd. FY2026 Q2 shows modest topline resilience but significant profitability compression, resulting in a small operating profit and a net loss. Revenue declined slightly by 0.9% YoY to ¥25.063bn, suggesting weak consumer traffic or limited price/mix uplift in a still-inflationary cost environment. Gross profit of ¥14.623bn implies a high gross margin of 58.3%, but this was almost entirely offset by elevated SG&A, leaving operating income at only ¥84m (operating margin 0.34%). Ordinary income was ¥109m, indicating small positive non-operating contributions (net of ¥1m interest expense), but the company posted a net loss of ¥100m (net margin -0.40%). The sharp -86.8% YoY decline in operating income despite a mild revenue dip underscores high operating leverage and a fixed-cost-heavy model. EBITDA was ¥929m (3.7% margin), but large D&A of ¥845m compressed EBIT, suggesting an asset-intensive production/distribution base (e.g., central kitchens, store equipment). Cash flow from operations was positive at ¥310m, exceeding the accounting loss, indicating some earnings quality resilience; however, free cash flow cannot be assessed due to undisclosed investing cash flows. The balance sheet looks conservative: low financial leverage (DuPont leverage 1.22x) and a reported debt-to-equity of 0.22x support solvency, while working capital is ample at ¥13.26bn. Liquidity ratios are strong (current and quick ratios at 340%), but these are flattered by non-disclosure of inventories, so caution is warranted. The DuPont ROE is -0.35%, driven entirely by the small negative net margin; asset turnover of 0.719x and modest leverage limited the downside to equity returns. Interest coverage is robust at 84x, highlighting minimal refinancing risk. An income tax line of ¥73m alongside a net loss suggests non-recurring items and/or timing differences; without extraordinary item disclosure, the bottom-line bridge remains partially opaque. Dividend data are not disclosed in this dataset, and DPS shows as zero; we therefore cannot infer policy changes from this quarter alone. Overall, the quarter reflects cost pressure and high fixed costs overpowering stable gross profitability, with balance sheet strength providing a cushion. Data gaps (inventories, investing cash flows, cash balance, share count, and equity ratio) limit precision in cash and per-share analyses; the conclusions focus on disclosed non-zero items.

Profitability Analysis

ROE_decomposition: DuPont: Net margin -0.40% × Asset turnover 0.719 × Financial leverage 1.22 = ROE -0.35%. The negative net margin is the primary driver of the negative ROE; asset turnover is moderate and leverage is low, limiting both upside and downside. margin_quality: Gross margin is high at 58.3% (GP ¥14,623m on sales ¥25,063m), consistent with a deli/ready-meal model where store labor and selling expenses sit in SG&A. SG&A is implied at ¥14,539m (GP minus EBIT), equating to ~58.0% of sales, leaving only 0.34% operating margin. Ordinary margin is 0.43% (¥109m), supported by small net non-operating gains; net margin is -0.40% (¥-100m). The compression from EBITDA margin 3.7% to EBIT margin 0.34% is driven by heavy D&A (¥845m). operating_leverage: Revenue fell 0.9% YoY, but operating income declined 86.8% YoY, indicating high fixed-cost operating leverage. Small top-line changes materially impact operating profit due to a high SG&A base and significant depreciation burden.

Growth Assessment

revenue_sustainability: Sales of ¥25.063bn were down 0.9% YoY, implying flat-to-slightly negative demand or limited pricing power. Without store count or same-store data, the sustainability of revenue is uncertain, but the small decline suggests no sharp deterioration. profit_quality: Gross profit generation remains strong, but the cost structure (labor, utilities, logistics, and depreciation) suppressed operating profits. Ordinary income exceeded operating income, indicating small positive financial/other contributions. The presence of income tax despite a net loss points to non-recurring/timing effects, leaving after-tax profit quality less clear. outlook: Near-term profit recovery hinges on SG&A discipline (labor productivity, store efficiency), D&A versus capex trajectory, and the ability to pass through costs. Stabilization or easing of input and utility costs would support margins, but wage inflation remains a headwind. With low leverage and positive OCF, the company has capacity to bridge near-term earnings volatility.

Financial Health

liquidity: Current ratio 340% and quick ratio 340% indicate strong short-term liquidity, supported by ¥13.26bn working capital. Note: inventories are undisclosed, so the quick ratio may overstate true liquidity. solvency: Debt-to-equity is a modest 0.22x, and interest expense is only ¥1m with 84x interest coverage, indicating very low financial risk. DuPont financial leverage at 1.22x implies a high equity buffer. The reported equity ratio of 0.0% appears undisclosed rather than reflective of leverage conditions. capital_structure: Total assets ¥34.861bn vs equity ¥28.554bn imply equity finances the majority of assets. Low debt usage limits risk but also constrains ROE upside in profitable periods.

Cash Flow Quality

earnings_quality: Operating cash flow of ¥310m versus net income of ¥-100m (OCF/NI = -3.10) indicates cash generation exceeded accounting loss, supported by non-cash D&A (¥845m). This suggests underlying cash earnings are sturdier than the net loss implies. FCF_analysis: Free cash flow cannot be calculated reliably because investing cash flow is undisclosed (shown as zero). EBITDA of ¥929m provides capacity for capex, but the actual capex run-rate and growth investments are unclear. working_capital: Large positive working capital (¥13.26bn) underpins liquidity. However, without inventories and cash balances disclosed, assessment of cash conversion cycle and inventory turns is not possible.

Dividend Sustainability

payout_ratio_assessment: Payout ratio data are not available for this period (DPS shows as zero by non-disclosure). With a net loss, a mechanical payout ratio would be non-meaningful, and we refrain from inference without confirmed DPS. FCF_coverage: FCF coverage cannot be assessed because investing cash flows (and thus FCF) are not disclosed. policy_outlook: Given the conservative balance sheet and positive OCF, the capacity to support dividends over a cycle exists, but near-term distributions depend on management policy, full-year profitability, and capex requirements. No conclusion can be drawn from this quarter’s dataset alone.

Risk Assessment

Business Risks:

• Cost inflation in ingredients, packaging, and utilities compressing margins
• Labor cost pressure and staffing constraints impacting SG&A
• Demand softness and traffic volatility in retail food channels
• Limited pricing power or delayed pass-through vs. rising costs
• Operational fixed-cost intensity (central kitchens, logistics, stores) driving high operating leverage
• Food safety and quality control risks
• Supply chain disruptions for fresh produce and imported inputs
• Weather/seasonality effects on customer traffic and product mix

Financial Risks:

• Profit sensitivity to small revenue changes due to fixed costs
• High depreciation burden reducing EBIT despite positive EBITDA
• Potential capex needs for refurbishment/expansion not disclosed this quarter
• Tax and extraordinary item timing effects causing volatility in net income
• Data gaps on inventories, cash, and investing flows limit visibility
• Potential lease liabilities not reflected in headline leverage metrics

Key Concerns:

• Operating margin compressed to 0.34% despite a 58.3% gross margin, highlighting SG&A pressure
• Net loss of ¥100m with income tax expense of ¥73m suggests bottom-line volatility from non-recurring/timing effects
• High operating leverage evidenced by -86.8% YoY decline in operating income on a -0.9% sales decline

Investment Implications

Key Takeaways:

• Top line broadly stable (-0.9% YoY) but insufficient to overcome cost pressures
• High SG&A and large D&A drive sharp EBIT compression
• Positive OCF versus accounting loss indicates some resilience in cash earnings
• Balance sheet remains conservative with low leverage and strong liquidity
• Visibility on capex and FCF is limited due to undisclosed investing cash flows

Metrics to Watch:

• Same-store sales and traffic trends
• Gross margin and SG&A-to-sales ratio
• EBITDA and D&A trajectory; capex and store/kitchen investment
• Operating cash flow and FCF (once investing cash flows are disclosed)
• Labor productivity and wage inflation impact
• Input cost trends (ingredients, energy, logistics)
• Store count, refurbishments, and format performance

Relative Positioning: Within domestic prepared foods/retail deli peers, Rock Field exhibits strong gross profitability and conservative leverage but weaker operating margin resilience due to a heavy SG&A and depreciation load; recovery depends on cost discipline and effective price/mix management.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis