| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥2861.7B | ¥2723.1B | +5.1% |
| Operating Income / Operating Profit | ¥210.4B | ¥190.9B | +10.2% |
| Equity-Method Investment Income (Loss) | - | - | - |
| Ordinary Income | ¥244.4B | ¥209.3B | +16.8% |
| Net Income / Net Profit | ¥165.0B | ¥142.7B | +15.7% |
| ROE | 9.6% | 8.8% | - |
For the cumulative Q2 of FY2026 (Nov 2025–Apr 2026), Revenue was ¥2,861.7B (YoY +¥138.7B, +5.1%), Operating Income was ¥210.4B (YoY +¥19.5B, +10.2%), Ordinary Income was ¥244.4B (YoY +¥35.1B, +16.8%), and Net Income attributable to owners of the parent for the quarter was ¥165.0B (YoY +¥22.3B, +15.7%), continuing a trend of revenue and profit growth. The Gyomu Super (business supermarket) segment, accounting for 96.1% of sales, led growth with +5.0% YoY, while the Foodservice / Ready-meal segment achieved double-digit revenue growth of +12.5%. Gross margin improved to 12.4% (prior year 11.6%), about +0.8pt, and operating margin expanded to 7.4% (prior year 7.0%), +0.4pt. At the ordinary income level, non-operating income of ¥36.7B, including foreign exchange gains of ¥25.4B and derivative valuation gains of ¥11.5B, boosted profitability, improving ordinary margin to 8.5% (prior year 7.7%), +0.8pt. Progress against full-year guidance (Revenue ¥5,665.0B, Operating Income ¥430.0B, Ordinary Income ¥437.0B, Net Income ¥295.0B) is 50.5% for Revenue, 48.9% for Operating Income, and 55.9% for Ordinary and Net Income, which, even assuming a second-half weighting, represents generally healthy progress.
[Revenue] Revenue was ¥2,861.7B (YoY +5.1%), showing solid growth. By segment, the Gyomu Super Business recorded ¥2,790.9B (+5.0%, 97.5% of total), driving the top line. Foodservice / Ready-meal Business posted ¥93.8B (+12.5%, 3.3% of total) achieving double-digit growth, and Eco Renewable Energy Business was ¥20.7B (+0.2%, 0.7% of total) remaining in a flat range. In the Gyomu Super Business, price policy penetration and steady same-store growth contributed, while Foodservice / Ready-meal benefited from strengthened store roll-out and higher average spend. Revenue from contracts with customers totaled ¥2,861.7B, of which point-in-time transfers were ¥2,816.4B (98.4%) and performance obligations over time were ¥45.3B (1.6%), indicating a business model centered on immediate sales.
[Profitability] Cost of sales was ¥2,506.7B (YoY +4.2%), growing less than revenue, leading to a large increase in gross profit to ¥355.1B (+12.1%). Gross margin improved to 12.4% from 11.6% a year earlier (+0.8pt), driven by price revisions and favorable SKU mix. Selling, general and administrative expenses were ¥144.7B (+14.9%), rising faster than revenue, primarily due to higher logistics-related costs such as transportation expenses of ¥48.96B (prior year ¥44.47B, +10.1%). SG&A ratio rose to 5.1% (prior year 4.6%), +0.5pt, but gross margin improvement absorbed this, resulting in Operating Income of ¥210.4B (+10.2%) and Operating Margin of 7.4% (prior year 7.0%), +0.4pt. Non-operating income totaled ¥36.7B, driven mainly by foreign exchange gains of ¥25.4B (prior year foreign exchange loss ¥19.7B—net increase of ¥45.1B) and derivative valuation gains of ¥11.5B. Interest income received was ¥3.1B and subsidy income ¥3.9B also contributed. Non-operating expenses declined sharply to ¥2.7B (prior year ¥20.6B), with interest expense at a minimal ¥0.1B. As a result, Ordinary Income rose to ¥244.4B (+16.8%), and Ordinary Margin improved to 8.5% (prior year 7.7%), +0.8pt. Extraordinary gains/losses were minor (gain ¥0.3B, loss ¥0.4B), resulting in Profit Before Tax of ¥244.3B; after deducting corporate taxes of ¥79.3B (effective tax rate 32.5%), Net Income was ¥165.0B (+15.7%), and Net Margin improved to 5.8% (prior year 5.2%), +0.6pt. In conclusion, revenue and profit increased, supported by sustained gross margin improvement and favorable non-operating factors.
The Gyomu Super Business reported Revenue ¥2,790.9B (YoY +5.0%), Operating Income ¥232.2B (+10.6%), and Operating Margin 8.3% (prior year 7.9%, +0.4pt), leading consolidated growth and profitability. Revenue from contracts with customers in this segment was ¥2,750.9B, with point-in-time transfers of ¥2,727.1B and over-time transfers of ¥23.8B. Expansion of the franchise network, stable performance of existing stores, and price policy penetration have driven sustained margin improvement. The Foodservice / Ready-meal Business recorded Revenue ¥93.8B (+12.5%), Operating Income ¥6.2B (+12.6%), and Operating Margin 6.6% (prior year 6.6%, flat). It consisted of point-in-time transfers ¥89.2B and over-time transfers ¥0.9B; store roll-out and higher average spend contributed, but margins remained at a high level without further expansion. The Eco Renewable Energy Business, while Revenue was ¥20.7B (+0.2%), achieved a large increase in Operating Income to ¥5.3B (+235.0%) and Operating Margin surged to 25.4% (prior year 7.6%, +17.8pt). This segment’s revenue is entirely over-time transfers ¥20.7B (100%), and contract condition revisions and profitability improvements appear to have significantly contributed. Other operations were minimal (Revenue ¥0.1B, Operating Loss ¥0.1B). After deducting corporate expenses of ¥33.2B, consolidated Operating Income was ¥210.4B, with margin improvements in the core business and contributions from high-margin segments lifting overall profitability.
[Profitability] Operating Margin 7.4% (prior year 7.0%, +0.4pt), Ordinary Margin 8.5% (prior year 7.7%, +0.8pt), Net Margin 5.8% (prior year 5.2%, +0.6pt), showing steady expansion at each stage. ROE of 9.6% decomposes into Net Margin 5.8% × Total Asset Turnover 1.062 times × Financial Leverage 1.56x, with margin improvement the primary driver. Basic EPS ¥74.41 (prior year ¥64.48, +15.4%), Diluted EPS ¥74.10, reflecting net income growth translating to per-share earnings. [Cash Quality] Cash and deposits ¥1,389.4B account for 51.6% of total assets. Trade receivables ¥312.1B (prior year ¥302.3B, +3.2%) grew in line with revenue, and inventories ¥172.8B (prior year ¥176.3B, -2.0%) are being efficiently managed. Days sales outstanding is about 20 days, inventory days about 12 days, maintaining high turnover and good working capital efficiency. Interest coverage is Operating Income ¥210.4B ÷ Interest Expense ¥0.1B = approx. 2,104x, indicating interest burden is effectively negligible. [Investment Efficiency] Total Asset Turnover 1.062x (annualized 2.12x) improved slightly from 1.046x (annualized 2.10x) despite large cash holdings. Property, plant and equipment ¥666.2B (prior year ¥662.2B) increased slightly in line with sales expansion. Depreciation (SG&A portion) ¥5.8B (prior year ¥5.8B) was flat, showing no major change in asset efficiency. [Balance Sheet Soundness] Equity Ratio 64.0% (prior year 60.5%, +3.5pt) strengthened. Interest-bearing debt (short-term borrowings ¥241.2B + long-term borrowings ¥44.6B) total ¥285.8B, with Debt/Capital ratio 14.2% (prior year 18.7%, -4.5pt) indicating a more robust capital structure. Current ratio 241.9% (prior year 311.5%, -69.6pt) and quick ratio 220.4% (prior year 291.4%, -71.0pt) declined but remain ample. Cash / Short-term debt ratio is 5.8x (Cash ¥1,389.4B ÷ Short-term borrowings ¥241.2B), indicating no short-term repayment concerns. However, short-term debt ratio rose to 84.4% (Short-term borrowings ¥241.2B ÷ Interest-bearing debt ¥285.8B), and the sharp decline in long-term borrowings (¥270.2B → ¥44.6B, -83.5%) has increased maturity mismatch and warrants attention.
Since the cash flow statement was not disclosed, funding trends were analyzed from balance sheet movements. Cash and deposits increased to ¥1,389.4B (prior year ¥1,310.0B, +¥79.4B), suggesting strong cash generation from operations. Inventories decreased slightly to ¥172.8B (prior year ¥176.3B, -¥3.5B), maintaining inventory turnover efficiency. Trade receivables rose modestly to ¥312.1B (prior year ¥302.3B, +¥9.8B), and trade payables increased to ¥407.2B (prior year ¥380.2B, +¥27.0B), indicating overall efficient working capital management. Property, plant and equipment increased slightly to ¥666.2B (prior year ¥662.2B, +¥4.0B), indicating continued store rollout and capital expenditure. In financing activities, short-term borrowings surged to ¥241.2B (prior year ¥31.2B, +¥210.0B), while long-term borrowings fell sharply to ¥44.6B (prior year ¥270.2B, -¥225.6B). The shift from long-term to short-term borrowings and repayment of long-term debt is progressing; given the strong cash balance, short-term repayment capacity is sufficient in the near term, but the importance of rollover management has increased. Net assets increased to ¥1,723.3B (prior year ¥1,614.0B, +¥109.3B), reinforcing the capital base through retained earnings. Overall, stable cash generation from operations, efficient working capital management, and accumulation of cash buffers indicate healthy liquidity.
Of Ordinary Income ¥244.4B, Operating Income ¥210.4B represents the recurring earnings base, while non-operating income ¥36.7B includes foreign exchange gains ¥25.4B (prior year foreign exchange loss ¥19.7B, net increase approx. ¥45B), derivative valuation gains ¥11.5B, and interest income ¥3.1B. Foreign exchange and derivative valuation gains depend on market movements and are largely transient. The sharp decline in non-operating expenses to ¥2.7B (prior year ¥20.6B) was mainly due to reduced foreign exchange losses, another volatile factor. Extraordinary gains/losses were minor (gain ¥0.3B, loss ¥0.4B), with limited impact on Net Income ¥165.0B. Corporate taxes of ¥79.3B on Pre-Tax Income ¥244.3B imply an effective tax rate of 32.5%, a standard level. Comprehensive income was ¥169.2B (Net Income ¥165.0B + Other Comprehensive Income ¥4.2B), with foreign currency translation adjustments contributing ¥4.2B positively. The gap between Net Income and Comprehensive Income is small, indicating limited volatility from valuation/conversion differences. From an accrual perspective, changes in trade receivables and inventories are small (Trade receivables +¥9.8B, inventories -¥3.5B), suggesting little divergence between reported profits and actual cash flows. Overall, the operating earnings base is delivering stable growth, but upside in Ordinary Income is driven by foreign exchange and derivatives, which could reverse with future market movements.
Full-year guidance is Revenue ¥5,665.0B (vs prior year +2.7%), Operating Income ¥430.0B (+7.8%), Ordinary Income ¥437.0B (-9.1%), Net Income ¥295.0B, EPS ¥133.24, and dividend ¥32 per share. Progress through the cumulative Q2 is 50.5% for Revenue, 48.9% for Operating Income, and 55.9% for Ordinary and Net Income, roughly meeting or exceeding standard progress (50%). The upside in Ordinary and Net Income reflects contributions from foreign exchange and derivative valuation gains; the full-year plan implies these benefits are expected to fade or slow in the second half (full-year Ordinary Income forecast indicates -9.1% YoY). Operating-level profitability is expected to remain on an improving trend, with gross margin improvement and SG&A control as key. The second half is presumed to incorporate seasonal factors and an expected increase in logistics costs, suggesting conservative assumptions and leaving room for upward revisions based on first-half results. The dividend forecast of ¥32 implies a payout ratio of about 24% (based on full-year EPS ¥133.24), a conservative level with high sustainability. There were no revisions to forecasts or dividend guidance this quarter; the company appears reasonably confident in achieving its plan.
No interim dividend was paid; full-year dividend forecast remains ¥32 per share. The payout ratio based on full-year EPS ¥133.24 is approximately 24.0%, a conservative policy emphasizing retained earnings. Given cash and deposits ¥1,389.4B, stable operating cash generation, and minimal interest burden, the company has sufficient capacity to execute dividends. Prior-year dividend data is not provided, but a 24% payout ratio can be viewed as balancing growth investment. There is no mention of share buybacks; shareholder returns are limited to dividends. Future dividend increases will depend on sustained Operating Income growth and investment needs (store openings and capital expenditure), but current capital structure and cash position indicate capacity for dividend increases.
Low gross margin structure and risk of higher raw material and logistics costs: Gross margin at 12.4% is low, and sensitivity to raw material prices and logistics cost increases (transportation expenses ¥48.96B, YoY +10.1%) is high. With SG&A ratio up to 5.1% (+0.5pt), cost pressures could materially impact operating margin, so sustainability of gross margin improvement and cost control are key monitoring items.
Volatility in foreign exchange and derivative valuation gains/losses: Of non-operating income ¥36.7B, foreign exchange gains ¥25.4B and derivative valuation gains ¥11.5B are market-dependent and temporary factors. Depending on foreign exchange movements in the second half, these may reverse to losses, and if the upside in Ordinary Income reverses, the full-year Ordinary Income could realize the projected YoY -9.1% decline.
Refinancing and rollover risk from short-term debt concentration: Short-term borrowings ¥241.2B (prior year ¥31.2B, +¥210.0B) and long-term borrowings ¥44.6B (prior year ¥270.2B, -¥225.6B) have pushed the short-term debt ratio to 84.4%. Although cash ¥1,389.4B supports repayment capacity, in periods of short-term market stress rollover costs could rise, so attention to re-shifting toward long-term funding and diversifying maturities is warranted.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.4% | – | – |
| Net Margin | 5.8% | 7.0% (6.4%–7.5%) | -1.2pt |
Operating Margin 7.4% is solid for wholesale, but Net Margin 5.8% is 1.2pt below the industry median 7.0%. Volatility from foreign exchange/derivative effects and tax burden are factors behind the gap at the net income level, and strengthening the recurring earnings base remains a challenge.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 5.1% | 4.5% (2.2%–5.8%) | +0.6pt |
Revenue growth of 5.1% outperformed the industry median 4.5% by 0.6pt, driven by stable same-store growth and store openings. Growth ranks favorably within the sector, and continued margin improvement and SG&A control could sustain the profit growth trend.
※ Source: Company aggregation
Sustained gross margin improvement and operating leverage progression: Gross margin rose to 12.4% (prior year 11.6%, +0.8pt), contributing to Operating Margin expansion to 7.4% (+0.4pt). Continued price policy penetration and favorable SKU mix could support ongoing operating margin improvement. Containing SG&A ratio at 5.1% (+0.5pt) remains a challenge, but if revenue growth outpaces SG&A increases, operating leverage will act and create room for further ROE improvement beyond 9.6%.
One-off effects from foreign exchange and derivatives and conservatism in full-year guidance: First-half Ordinary Income was boosted by foreign exchange and derivative valuation gains, while the full-year guidance (Ordinary Income YoY -9.1%) implies these effects are expected to fade in the second half. Given first-half Ordinary progress of 55.9% and steady operating performance, maintaining guidance is conservative and there remains potential for upward revision.
Correcting short-term debt concentration and improving capital structure quality: Short-term borrowings surged to ¥241.2B while long-term borrowings fell to ¥44.6B, raising the short-term debt ratio to 84.4%. Although cash ¥1,389.4B supports repayment capacity, maturity mismatch has widened; re-shifting to long-term funding and diversifying maturities would improve capital structure quality. Future changes in borrowing composition and cash balance trends are key focal points.
This report is an AI-generated earnings analysis document based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are reference information compiled by our firm from publicly available financial statements. Investment decisions should be made at your own responsibility and, where appropriate, in consultation with a professional advisor.