BIC CAMERA (3048) FY2026 FY Earnings Report

Financial Highlights

• Net Sales: ¥1.04T
• Operating Income: ¥37.66B
• Net Income: ¥23.65B
• EPS: ¥118.86

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment Information

※ セグメント利益の測定基礎: 経常利益

Full Year Forecast

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AI Financial Analysis

Executive Summary

Bic Camera delivered a stronger FY2026, with profit growth outpacing sales growth. Revenue rose 6.8% year on year to ¥10,411.65億. Operating income increased 24.4% to ¥376.64億. Profit attributable to owners rose 16.5% to ¥203.53億. Gross margin improved by approximately 32 basis points to 27.0%. Operating margin expanded by approximately 51 basis points to 3.6%. SG&A grew more slowly than revenue, supporting that operating leverage. Merchandise sales remained the core business, contributing 98.8% of revenue and ¥369.26億 of segment ordinary profit. Its segment ordinary profit rose 23.7%, although its 3.6% margin leaves earnings sensitive to small changes in merchandise economics. The higher operating profit did not fully reach the bottom line: impairment losses rose to ¥42.52億 from ¥14.11億. Operating cash flow increased to ¥395.25億 and covered profit attributable to owners 1.94 times. That cash performance supports earnings quality, but a ¥119.43億 inventory-related cash outflow warrants monitoring. Year-end inventory represented 61 days of cost of sales, above the 60-day warning threshold. Liquidity remains adequate, with ¥831.81億 of cash and deposits against ¥585.94億 of short-term loans. Nevertheless, short-term borrowing accounts for approximately 70% of interest-bearing debt, creating refinancing exposure. FY2026 free cash flow of ¥243.95億 covered cash dividends paid during the year. The supplied full-year forecast implies slower subsequent growth—3.9% in revenue and 3.5% in operating income—and a broadly flat operating margin.

Profitability Analysis

The supplied three-factor DuPont calculation is 1.9% net margin × 1.994× asset turnover × 2.27× leverage, producing approximately 8.8% ROE; its leverage denominator includes non-controlling interests. For returns attributable to parent shareholders, FY2026 profit attributable to owners divided by average owners’ equity gives approximately 11.5% ROE, consistent with the raw reported ratio, versus 10.9% a year earlier. Parent-attributable net margin increased from approximately 1.79% to 1.95%, making margin improvement the clearest demonstrated driver. Gross margin rose from approximately 26.73% to 27.05%, while SG&A fell from approximately 23.63% to 23.43% of sales. SG&A increased approximately 6.0%, below revenue growth of 6.8%; operating income consequently grew 24.4%. The 3.6% operating margin remains thin for absorbing retail pricing or cost shocks. JGAAP goodwill amortization was ¥10.52億, only 2.2% of reported EBITDA of ¥472.48億; the supplied EBITDA before goodwill amortization is ¥483.00億. Goodwill accounting therefore has a modest, rather than thesis-defining, effect on comparability with IFRS peers.

Growth Assessment

Merchandise sales grew 6.9% to ¥10,286.05億, driving most consolidated growth. Their segment ordinary profit rose 23.7% to ¥369.26億, indicating improved profitability as well as scale. The subsequent full-year forecast calls for revenue of ¥10,820億, operating income of ¥390億, ordinary income of ¥395億 and profit attributable to owners of ¥212億. Those figures imply growth of 3.9%, 3.5%, 1.5% and 4.2%, respectively, from FY2026. Forecast operating margin is approximately 3.60%, essentially level with FY2026’s 3.62%, so the outlook does not assume further material margin expansion. The BS digital broadcasting business generated ¥110.97億 of revenue, up 1.1%, and ¥19.24億 of segment ordinary profit, down 5.8%; its margin was 17.3%. Other businesses generated ¥14.62億 of revenue, down 4.6%, and ¥0.59億 of segment ordinary profit, up 40.5%, for a 4.0% margin. Merchandise sales generated approximately 95% of total segment ordinary profit. Segment profits are measured on an ordinary-profit basis, not the consolidated operating-income basis.

Financial Health

Current assets of ¥3,060.98億 exceeded current liabilities of ¥2,228.66億 by ¥832.32億; the current ratio was 1.37×. The quick ratio was lower at 0.80×, reflecting the importance of converting merchandise inventory into cash. Cash and deposits of ¥831.81億 covered short-term loans of ¥585.94億 by 1.42×. Short-term loans nevertheless represented 69.7% of interest-bearing debt, so continued access to refinancing matters even with the present cash buffer. Debt/EBITDA was 1.78×, EBITDA interest coverage was 51.58× and debt/capital was 26.7%, indicating manageable current debt service. The supplied 1.27× debt-to-equity measure is below the 2.0× warning threshold. Retained earnings increased ¥129.90億, or 10.8%, to ¥1,333.71億, strengthening the equity base. Contract liabilities were ¥384.44億; asset-retirement obligations of ¥109.88億 are relevant to longer-term store and property commitments. Inventory accounted for 24.3% of total assets, making its realizability important to balance-sheet resilience.

Notable B/S Changes

Cash and deposits: +¥138.97億 (+20.1%) to ¥831.81億 — improves liquidity and coverage of short-term borrowing. Inventories: +¥118.57億 (+10.3%) to ¥1,270.37億 — now 24.3% of assets; the buildup increases markdown and cash-conversion sensitivity. Retained earnings: +¥129.90億 (+10.8%) to ¥1,333.71億 — reinforces internally generated capital. Short-term loans: −¥58.10億 (−9.0%) to ¥585.94億 — reduces near-term borrowing, although its share of total debt remains high. Construction in progress: +¥8.43億 (+207.6%) to ¥12.49億 — indicates a larger pipeline of assets under development. Goodwill: −¥13.85億 (−16.1%) to ¥72.12億 — a smaller goodwill balance limits acquisition-value exposure; the reported ¥42.52億 impairment relates to the merchandise segment’s fixed assets.

Cash Flow Quality

Operating cash flow rose approximately 56% year on year to ¥395.25億, versus ¥203.53億 of profit attributable to owners; OCF/profit was 1.94×. OCF/EBITDA was 0.84×: positive cash conversion, though below the supplied 0.90× excellent benchmark. The accruals ratio was −3.7%. Working capital absorbed cash through a ¥119.43億 inventory increase and a ¥26.59億 receivables increase, partly offset by ¥43.30億 from trade payables and ¥45.10億 from contract liabilities. These movements merit monitoring rather than, on their own, establishing working-capital manipulation. The ¥42.52億 noncash impairment also lifted operating cash flow relative to accounting profit. Supplied free cash flow, defined here as ¥395.25億 operating cash flow plus −¥151.30億 investing cash flow, was ¥243.95億. It covered ¥73.56億 of cash dividends paid approximately 3.32 times; coverage remained positive after ¥10.51億 of dividends to non-controlling interests. Capital expenditure of ¥70.13億 was 0.73× depreciation and amortization, while intangible-asset purchases were a further ¥48.02億.

Dividend Sustainability

FY2026 dividends were ¥48 per share, comprising ¥20 interim and ¥28 year-end. The dividend payout ratio is approximately 40.4% on ¥118.86 basic EPS, consistent with the raw reported ratio; profit attributable to owners is the appropriate earnings denominator. Cash dividends paid of ¥73.56億 were covered 3.32× by supplied free cash flow of ¥243.95億. At ¥48 per share and approximately 171.25 million issued shares excluding treasury shares at year-end, indicative annual dividends are approximately ¥82.20億, or 2.97× covered by FY2026 free cash flow. The subsequent forecast specifies ¥50 per share and ¥123.79 EPS, implying a similarly moderate dividend payout ratio of approximately 40.4%. Sustained inventory conversion and the forecast’s modest profit growth are more consequential for future dividend capacity than the current payout level.

Risk Assessment

Business risks include High priority — merchandise sales provide 98.8% of revenue, concentrating exposure to Japanese consumer demand, electronics replacement cycles and competitive pricing., High priority — year-end inventory equaled 61 days of annual cost of sales, versus approximately 59 days a year earlier. Electronics product cycles and online price competition heighten markdown and obsolescence risk., Medium priority — merchandise segment ordinary margin is approximately 3.6%, leaving limited room to absorb labor, occupancy or promotional cost increases., Medium priority — BS digital broadcasting segment ordinary profit declined 5.8% despite 1.1% revenue growth..

Financial risks include High priority — approximately 70% of interest-bearing debt is short term. Cash covers short-term loans 1.42×, but refinancing terms could worsen., Medium priority — the 0.80× quick ratio makes liquidity more dependent on inventory turnover than the 1.37× current ratio alone suggests., Medium priority — ¥42.52億 of merchandise-business fixed-asset impairment, up from ¥14.11億, raises the risk of further charges if store economics weaken..

Key concerns include LOW_OPERATING_EFFICIENCY: The 3.6% operating margin is below the 5% alert threshold. Thin margins are characteristic of competitive electronics retail, but amplify the earnings impact of small gross-margin or cost changes despite this year’s 51-basis-point improvement., REFINANCING_RISK: The 69.7% short-term debt share exceeds the 40% alert threshold. Current cash coverage and strong interest coverage mitigate, but do not remove, rollover risk., HIGH_INVENTORY_DAYS: Approximately 61 year-end inventory days exceeds the 60-day alert threshold and has worsened from approximately 59 days. Slower turnover could require markdowns and consume cash., HIGH_ONE_TIME_ITEMS: The flagged one-time-items measure is 22.6% of net income. Extraordinary losses of ¥48.59億 were dominated by ¥42.52億 of impairment; their increase constrained parent-attributable profit growth despite stronger operations., HIGH_TAX_BURDEN: The flagged 0.595 ratio divides parent-attributable profit by consolidated pretax profit and therefore reflects both income taxes and ¥33.00億 of non-controlling interests. The actual consolidated effective tax rate was 30.8%, not above 40%. The ownership allocation, rather than an unusually high effective tax rate, limits the conversion of pretax profit into parent-attributable earnings..

Investment Implications

Key takeaways include FY2026 operating leverage was favorable: 6.8% revenue growth produced 24.4% operating-income growth., Cash generation and dividend coverage were strong, while inventory absorbed cash and year-end inventory days increased., Higher impairment losses diluted the benefit of stronger underlying operations to parent shareholders., The subsequent forecast points to slower growth and a broadly stable operating margin..

Metrics to watch include Merchandise gross margin, SG&A ratio and segment ordinary margin, Year-end inventory days, markdowns and inventory-related operating cash flow, Store-asset impairments and free cash flow after investing activities, Short-term loan maturities, cash coverage and interest expense, Progress against the subsequent full-year revenue and profit forecasts.

Regarding relative positioning, The 27.0% gross margin is within the supplied general-retail benchmark, while the 3.6% operating margin remains below the broad 5% concern threshold. Debt/EBITDA of 1.78× and strong interest coverage support the balance sheet; inventory intensity and merchandise concentration distinguish the principal risks.