| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥7853.7 B | ¥7299.0 B | +7.6% |
| Operating Income / Operating Profit | ¥333.0 B | ¥245.2 B | +35.8% |
| Ordinary Income | ¥341.3 B | ¥255.7 B | +33.5% |
| Net Income / Net Profit | ¥228.2 B | ¥175.8 B | +29.9% |
| ROE | 10.0% | 8.3% | - |
For the cumulative Q3 period of FY2026 (9 months), Revenue was ¥7,853.7 B (YoY +¥554.7 B +7.6%), Operating Income was ¥333.0 B (YoY +¥87.8 B +35.8%), Ordinary Income was ¥341.3 B (YoY +¥85.6 B +33.5%), and Quarterly Net Income attributable to owners of the parent was ¥198.4 B (YoY +¥47.0 B +31.1%). Operating margin improved to 4.2% (up +0.8pt from 3.4% in the prior year), Gross Profit Margin was 26.9% (up +0.2pt), and SG&A ratio declined to 22.6% (down -0.7pt), reflecting top-line expansion and operating leverage that materially improved profitability. Basic EPS was ¥115.86 (up +31.0% from ¥88.42). Against full-year guidance, progress rates were 76.9% for Revenue, 96.7% for Operating Income, and 95.6% for Ordinary Income, showing ahead-of-schedule progress; Net Income has already exceeded the full-year forecast.
[Revenue] Revenue totaled ¥7,853.7 B (+7.6%), driven by the core Merchandise Sales Business at ¥7,760.2 B (+7.7%), accounting for 98.8% of total sales. The BS Digital Broadcasting Business recorded ¥83.3 B (+1.2%), and Other Businesses declined to ¥11.1 B (-4.8%). Gross profit was ¥2,110.6 B (+8.4%), with a gross margin of 26.9% (up +0.2pt from 26.7% a year earlier). The segment structure is highly dependent on Merchandise Sales, indicating a concentrated business portfolio.
[Profitability] Operating Income was ¥333.0 B (+35.8%). SG&A expenses were contained to ¥1,777.6 B (+4.5%), growing well below revenue growth, improving the SG&A ratio to 22.6% (down -0.7pt from 23.3%). Ordinary Income was ¥341.3 B (+33.5%), which includes net non-operating income of ¥8.3 B (non-operating income ¥15.6 B less non-operating expenses ¥7.3 B). Non-operating income includes ¥2.3 B of dividend income but is minor at 0.2% of sales. Extraordinary items were nearly neutral with extraordinary gains of ¥0.9 B (gain on sale of fixed assets) and extraordinary losses of ¥2.4 B (fixed asset retirement losses ¥1.3 B, loss on disposal of fixed assets ¥0.9 B). Pre-tax income was ¥339.7 B, income taxes were ¥111.5 B (effective tax rate 32.8%), and after deducting quarterly net income attributable to non-controlling interests of ¥29.9 B, quarterly net income attributable to owners of the parent was ¥198.4 B (+31.1%). In conclusion, the company achieved revenue and profit growth, with expense efficiency accelerating profit expansion.
The Merchandise Sales Business recorded Revenue of ¥7,760.2 B (+7.7%) and Segment Profit of ¥326.1 B (¥238.9 B prior year, +36.6%), with a materially improved segment margin of 4.2%. The BS Digital Broadcasting Business posted Revenue of ¥83.3 B (+1.2%) and Segment Profit of ¥14.5 B (¥16.4 B prior year, -11.7%), with a reduced margin of 17.4%. Other Businesses had Revenue of ¥11.1 B (-4.8%) and Segment Profit of ¥0.7 B (¥0.4 B prior year), remaining small-scale. Segment profits are adjusted to align with Ordinary Income on a consolidated basis, consistent with consolidated Ordinary Income of ¥341.3 B. Most profit growth derived from margin improvements in the Merchandise Sales Business; the decline in BS Digital Broadcasting profit had limited impact on the consolidated result.
[Profitability] Operating margin was 4.2% (up +0.8pt from 3.4% prior year) and Net Profit Margin was 2.9% (up +0.5pt from 2.4%), reflecting improved cost efficiency. ROE was 10.0% (estimated improvement from approximately 8.7% based on prior-year data), supported by higher net profit margins and maintained asset efficiency. [Quality of Earnings] Non-operating income was ¥15.6 B, minor at 0.2% of sales, indicating core business-driven earnings. Extraordinary items were a net -¥1.5 B, and the divergence between Ordinary Income and Net Income is mainly due to tax burden (effective tax rate 32.8%) and non-controlling interests of ¥29.9 B. [Investment Efficiency] Total asset turnover was about 1.45x (annualized). Inventories increased to ¥1,356.6 B (up ¥20.5 B YoY), lengthening inventory days to approximately 86 days. Accounts receivable were ¥705.4 B (up ¥144.3 B) and accounts payable were ¥656.3 B (up ¥134.0 B), expanding working capital in a balanced manner, while contract liabilities rose to ¥450.8 B (up ¥109.1 B, +31.9%), supporting liquidity. [Financial Soundness] Equity Ratio was 42.1% (down -0.9pt from 43.0% YoY). Interest-bearing debt totaled ¥902.8 B—short-term borrowings ¥723.8 B and long-term borrowings ¥179.0 B (down from ¥230.4 B prior year)—with Debt/Equity approx. 0.50x and Debt/Capital 28.4%, at conservative levels. Cash and deposits were ¥791.7 B, current ratio 129.0%, and quick ratio 74.6%, indicating liquidity that depends on inventories. The short-term proportion of interest-bearing debt is high at 80.2%, making the company sensitive to refinancing and interest-rate changes.
As operating CF and investing CF data were not disclosed, funding trends were analyzed from balance sheet movements. Cash and deposits increased to ¥791.7 B (up ¥98.9 B from ¥692.8 B), improving liquidity. Inventories rose to ¥1,356.6 B (+¥20.5 B), increasing faster than sales growth and lengthening inventory days to around 86 days. Accounts receivable ¥705.4 B (+¥144.3 B) and accounts payable ¥656.3 B (+¥134.0 B) both increased by +25.7%, expanding working capital, while contract liabilities rose to ¥450.8 B (from ¥341.7 B, +¥109.1 B, +31.9%), reflecting accumulated advance receipts and points liabilities that support cash. Tangible fixed assets were ¥806.0 B (up ¥14.6 B from ¥791.4 B), indicating restrained investment pace. A reduction in long-term borrowings (−¥51.4 B) suggests repayment progress or shortening of maturities, and combined with an increase in short-term borrowings (+¥79.8 B) the short-term debt ratio has risen. Free cash flow generation is inferred to be healthy given the cash increase and build-up of contract liabilities, but sustainability depends on inventory reduction.
Non-operating income of ¥15.6 B is minor at 0.2% of sales, composed mainly of dividend income ¥2.3 B, equity-method investment income ¥0.8 B, and other ¥7.5 B—predominantly recurring items. Non-operating expenses ¥7.3 B are primarily interest expense ¥6.2 B, and interest burden relative to interest-bearing debt of ¥902.8 B is modest (interest coverage approx. 53.5x). Extraordinary items net to −¥1.5 B (gains ¥0.9 B, losses ¥2.4 B) including impairment losses of ¥0.03 B, indicating limited one-off impacts. Comprehensive income was ¥238.8 B; the difference from quarterly net income ¥228.2 B (¥10.6 B) arises from Other Comprehensive Income (unrealized gains on securities +¥13.8 B, adjustments related to retirement benefits −¥3.2 B, etc.), showing small divergence between realized and unrealized gains. The gap from Ordinary Income ¥341.3 B to Net Income ¥228.2 B is mainly due to tax expense ¥111.5 B (effective tax rate 32.8%) and non-controlling interests ¥29.9 B, while core business profitability remains high and sustainable.
Full-year guidance remains at Revenue ¥10,220.0 B (+4.9%), Operating Income ¥344.0 B (+13.6%), Ordinary Income ¥357.0 B (+11.8%), and Net Income attributable to owners of the parent ¥184.0 B. Q3 cumulative progress rates are 76.9% for Revenue (standard 75% +1.9pt), 96.7% for Operating Income, 95.6% for Ordinary Income, and Net Income has already exceeded the full-year forecast (progress 108.0%). Absent material expense accruals in Q4, upside to guidance is likely. Actual EPS of ¥115.86 materially exceeds the forecast EPS of ¥107.45, suggesting room to revise full-year Net Income upward. Dividend guidance is unchanged at ¥23.00 for the full year (expected payout ratio approximately 21%), and the company is presumed to retain a conservative stance on dividend increases even if Net Income rises. No revisions to forecasts or dividends have been announced as of Q3.
An interim dividend of ¥20.00 was paid at the end of Q2; full-year dividend guidance is ¥23.00. The payout ratio against forecasted full-year EPS ¥107.45 is about 21.4%, a conservative level, and against actual EPS ¥115.86 the payout ratio is about 19.9%. Quarterly Net Income attributable to owners of the parent for 9 months was ¥198.4 B; the number of shares outstanding at period-end after deducting treasury stock is approximately 171.3 million shares. The interim dividend payment of ¥20 per share implies a total payout of approximately ¥3.43 B, a light burden relative to profits. Considering cash and deposits ¥791.7 B, estimated Operating Cash Flow, and contract liabilities build-up ¥450.8 B, dividend sustainability is high. No share buyback has been disclosed; shareholder returns consist solely of dividends. Given the low payout ratio, there is ample room for future dividend increases, but the company currently maintains a conservative dividend policy.
Inventory turnover risk: Inventories of ¥1,356.6 B (YoY +¥20.5 B, inventory days approx. 86) have increased at a faster pace than sales growth (+7.6%), confirming a lengthening of inventory turnover. Inventory increases could force price reductions, obsolescence losses, or valuation losses that would depress gross margins. If inventory days do not normalize, future profitability deterioration and cash flow pressure may result.
Short-term funding risk: Short-term borrowings ¥723.8 B and long-term borrowings maturing within one year ¥81.5 B make short-term interest-bearing debt about ¥805.3 B, representing 89.2% of total interest-bearing debt ¥902.8 B. The short-term debt ratio is high at 80.2%, concentrating maturities in the short term and exposing the company to refinancing deterioration and higher funding costs if interest rates rise. Although current ratio is 129.0% and liquidity is maintained, high inventory dependence (quick ratio 74.6%) means liquidity could be strained if inventories are slow to liquidate.
Segment concentration risk: The Merchandise Sales Business accounts for 98.8% of Revenue and about 95.7% of segment profit, making the business portfolio highly concentrated. Intensified price competition in consumer electronics and durable goods, heightened competition from e-commerce players, or shifts in consumer preferences could directly slow merchandise sales and materially affect consolidated performance. Profit contraction in the BS Digital Broadcasting Business (−11.7%) highlights limited diversification of revenue sources.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 4.2% | 3.9% (1.2%–8.9%) | +0.3pt |
| Net Profit Margin | 2.9% | 2.2% (0.2%–5.7%) | +0.7pt |
Profitability exceeds the industry median, placing the company in the upper group among retailers.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 7.6% | 3.0% (-0.1%–9.2%) | +4.5pt |
Revenue growth materially exceeds the industry median, positioning the company in a high-growth group among retailers.
※ Source: Company compilation
Profitability improvement trend via cost efficiency: Operating margin 4.2% (up +0.8pt) and SG&A ratio 22.6% (down −0.7pt) confirm disciplined cost management and structural improvement in profitability. SG&A grew +4.5% versus revenue growth +7.6%, demonstrating operating leverage. Progress versus full-year guidance is ahead (Operating Income 96.7%, Ordinary Income 95.6%), and absent significant prepayments of expenses in Q4, upside to full-year guidance is likely. Net Income has already exceeded the full-year forecast (progress 108.0%), indicating scope for forecast revision.
Room to improve inventory management and working capital efficiency: Prolonged inventory days (¥1,356.6 B, +¥20.5 B, ~86 days) pose risks to gross margins and cash flow. Contract liabilities build-up ¥450.8 B (up +31.9%) provides a cash buffer via advance receipts and points liabilities, but failure to normalize inventory turnover could impair future profitability. Inventory reduction and supply-chain efficiency are key to mid-term profitability improvement.
Financial capacity and conservative shareholder return policy: Equity Ratio 42.1%, Debt/Capital 28.4%, and payout ratio around 21% reflect conservative financial soundness and return policy. Cash and deposits ¥791.7 B and contract liabilities ¥450.8 B strengthen liquidity and dividend sustainability. Although short-term debt ratio 80.2% poses a term-structure issue, current liquidity is sufficient. If Net Income rises, dividend increases or initiation of share buybacks would signal stronger shareholder returns.
This report was automatically generated by AI analyzing XBRL financial statement data and is a financial analysis document. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your responsibility; please consult a professional advisor as appropriate.