| Metric | Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥82.4B | ¥72.8B | +13.1% |
| Operating Income | ¥10.3B | ¥5.3B | +93.5% |
| Ordinary Income | ¥10.4B | ¥5.5B | +87.6% |
| Net Income | ¥6.9B | ¥3.7B | +85.8% |
| ROE | 3.1% | 1.7% | - |
FY2026 Q1 results delivered revenue ¥82.4B (YoY +¥9.6B +13.1%), Operating Income ¥10.3B (YoY +¥5.0B +93.5%), Ordinary Income ¥10.4B (YoY +¥4.8B +87.6%), and Net Income ¥6.9B (YoY +¥3.2B +85.8%), achieving substantial top- and bottom-line growth. Operating margin improved to 12.5% from 7.3% in the prior-year period, a 5.2pt improvement, driven by both a gross margin of 67.6% (prior 65.7%, +1.9pt) and a SG&A ratio of 55.1% (prior 58.4%, -3.3pt). Net margin rose to 8.4% (prior 5.1%, +3.3pt), confirming a structural improvement in profitability.
[Revenue] Revenue reached ¥82.4B (YoY +13.1%), achieving double-digit growth. As the company operates a single segment (Food & Beverage Business), detailed segmentation is not disclosed, but growth is presumed driven by restored customer traffic at existing stores and higher average spend per customer. Gross margin improved to 67.6% from 65.7% in the prior-year period (+1.9pt), reflecting effective raw material cost management, pricing policy, and optimization of product mix.
[Profitability] Cost of sales was contained at ¥26.7B (32.4% of revenue), securing gross profit of ¥55.8B. SG&A amounted to ¥45.4B (55.1% of revenue), down 3.3pt from 58.4% in the prior-year period, aided by suppression of fixed-cost increases such as labor and rent and the leverage from higher sales. The absolute SG&A figure increased only +6.8% from ¥42.6B in the prior year, significantly below the +13.1% revenue growth, indicating efficiency gains. Operating Income doubled to ¥10.3B (Operating margin 12.5%) from ¥5.3B (7.3%) in the prior-year period, achieving a 5.2pt margin improvement. Non-operating income ¥0.1B and non-operating expenses ¥0.1B were both immaterial (<0.3% of revenue), and Ordinary Income ¥10.4B reflects growth driven by core operations. Extraordinary losses were ¥0.0B (loss on disposal of fixed assets) and limited; Profit before taxes was ¥10.3B, from which income taxes ¥3.4B (effective tax rate 32.9%) were deducted, resulting in Net Income ¥6.9B. The result is high-quality earnings growth driven by revenue expansion and margin improvement.
[Profitability] Operating margin 12.5% improved 5.2pt from 7.3% in the prior-year period, with both a 1.9pt increase in gross margin and a 3.3pt decrease in SG&A ratio contributing. Net margin 8.4% (prior 5.1%, +3.3pt) is at a high level, indicating strengthened core profitability. ROE remains at 3.1%, reflecting a conservative balance sheet holding ¥94.0B in cash that suppresses total asset turnover to 0.30x; improvement in net margin is the primary driver of ROE uplift. [Cash Quality] Cash and deposits ¥94.0B are approximately 2.2x short-term liabilities ¥41.9B, yielding a strong current ratio of 286% and ample liquidity. Accounts receivable ¥14.4B (17.5% of revenue, collection period ~64 days) reflects a high card-payment ratio; inventories ¥1.7B (prior ¥2.4B, -28.3%) indicate improved inventory efficiency. [Investment Efficiency] Total asset turnover 0.30x is affected by a cash-heavy balance sheet, leaving room for asset efficiency improvement. Inventory compression suggests improved working capital efficiency. [Financial Soundness] Equity Ratio 81.9%, D/E ratio 0.02x (interest-bearing debt ¥1.7B / net assets ¥222.1B) maintain an extremely conservative capital structure. Asset retirement obligations ¥4.7B (≈9.6% of liabilities) indicate potential cash outflows for future store closures/refurbishments, but current cash levels can absorb this.
Non-operating income ¥0.1B and non-operating expenses ¥0.1B are both <0.3% of revenue, indicating earnings quality is business-core centric. Inventory was compressed from ¥2.4B in the prior-year period to ¥1.7B (-¥0.7B, -28.3%), contributing to cash generation and reduced cash tie-up risk. Accounts receivable ¥14.4B (prior ¥13.8B) increased slightly, with a collection cycle of ~64 days—relatively long for the restaurant industry—affected by a high card settlement ratio. Bonus provisions were significantly increased to ¥3.1B (prior ¥0.8B, +¥2.3B), indicating anticipated future cash outflows for payroll, but these are fully absorbable given cash ¥94.0B and ample liquidity. Tax burden is at a standard effective tax rate of 32.9%; with limited impact from non-operating items and extraordinary gains/losses, accrual fluctuations remain within a manageable range.
Non-operating income ¥0.1B (dividends received ¥0.0B, other ¥0.0B) equals 0.2% of revenue, and non-operating expenses ¥0.1B (interest paid ¥0.0B, other ¥0.0B) equal 0.1% of revenue—both materially insignificant—so Ordinary Income ¥10.4B closely matches Operating Income ¥10.3B. Extraordinary losses ¥0.0B (loss on disposal of fixed assets) are immaterial, and there is no meaningful divergence between Profit before taxes ¥10.3B and Ordinary Income ¥10.4B. Net Income ¥6.9B results after deducting income taxes ¥3.4B (effective tax rate 32.9%); one-off effects are small, and earnings are supported by sustainable core profitability. The improvement to a 12.5% operating margin reflects structural changes of higher gross margin and lower SG&A ratio; while dependent on cost inflation trends, short-term sustainability appears high.
Full Year guidance is maintained at Revenue ¥330.0B (YoY +9.2%), Operating Income ¥30.0B (YoY +2.4%), Ordinary Income ¥30.5B (YoY +0.8%), and Net Income ¥20.0B. Q1 progress rates are Revenue 24.9% (¥82.4B/¥330.0B), which is typical, while Operating Income 34.4% (¥10.3B/¥30.0B) and Net Income 34.7% (¥6.9B/¥20.0B) both exceed the standard 25% by roughly 10pt, indicating front-loaded results. The improvement in operating margin driven by +1.9pt gross margin and -3.3pt SG&A ratio (Operating margin 12.5% vs prior 7.3%) contributed to this. Given FY operating income guidance growth of +2.4%, over 30% has already been achieved in Q1, implying upside potential for H1. Sustainability of margin improvement depends on raw material prices, labor cost trends, and seasonality of demand, but at present the likelihood of achieving full-year guidance is high.
Full-year dividend guidance is ¥14.0 (Regular dividend ¥13.0 + Special commemorative dividend ¥1.0), implying a payout ratio vs forecast EPS ¥134.34 of approximately 10.4%, a conservative level. With cash and deposits ¥94.0B and Equity Ratio 81.9% providing a strong financial base, capacity to continue dividends is very high. In the prior year, a year-end dividend including regular dividend ¥13.0 plus a commemorative dividend ¥2.0 for the launch of the new management team was paid; stable dividend policy is expected to continue. Given Q1 Net Income ¥6.9B and ample cash, dividend payments are well covered by both cash flow and earnings.
Raw material price and FX risk: Although gross margin improved to 67.6% (+1.9pt YoY), fluctuation in food ingredient prices or exchange rates (for imported ingredients) could deteriorate gross margin. While procurement cost control and pricing policy are effective currently, a renewed acceleration of cost inflation could make maintaining the 12.5% operating margin difficult.
Labor cost increases and labor shortage risk: SG&A ratio improved to 55.1%, but bonus provisions increased from ¥0.8B to ¥3.1B (+¥2.3B), indicating higher labor-related expense burden. Worsening labor shortages or minimum wage hikes could push SG&A ratio up again, reversing operating leverage.
Working capital efficiency and asset retirement obligation risk: Accounts receivable collection period ~64 days and, although inventories were compressed, theoretical inventory days remain relatively long at ~103 days. Asset retirement obligations ¥4.7B (≈9.6% of liabilities) could cause one-off cash outflows for future store closures/refurbishments. While absorbable given cash ¥94.0B, funding pressure could rise if store opening/refurbishment plans accelerate.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 12.5% | – | – |
| Net Margin | 8.4% | – | – |
Due to limited industry data, relative evaluation is difficult, but the company’s Operating Margin 12.5% is high for the restaurant sector and shows marked profitability improvement.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 13.1% | – | – |
Revenue growth 13.1% is double-digit, presumed driven by both customer traffic recovery and higher average spend per customer.
※ Source: Company compilation
High-quality earnings growth led by margin improvement: While Revenue grew +13.1%, Operating Income grew +93.5% due to simultaneous improvements of +1.9pt in gross margin and -3.3pt in SG&A ratio, achieving Operating Margin 12.5% (prior 7.3%, +5.2pt). SG&A growth +6.8% was far below revenue growth, demonstrating positive operating leverage. Operating Income progress vs full-year guidance is 34.4%—over 10pt above the standard—suggesting H1 performance may be ahead of plan. Sustainability of margin improvement depends on raw material and labor cost trends, but the short-term trend in profitability is clear.
Strong financial base with scope to improve working capital efficiency: Cash ¥94.0B, Equity Ratio 81.9%, and D/E ratio 0.02x maintain an extremely conservative capital structure and solid liquidity with Current Ratio 286%. Inventories were compressed -28.3% YoY, indicating improved working capital efficiency. Accounts receivable collection period ~64 days is relatively long for the restaurant industry, influenced by a high card settlement ratio. Asset retirement obligations ¥4.7B (≈9.6% of liabilities) present a cash outflow risk for future closures/refurbishments, but current cash levels can absorb this. The company has financial capacity to shift to growth investments such as new store openings or refurbishments.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmark figures are reference information compiled by the company from public financial statement data. Investment decisions are the responsibility of the individual; please consult a professional advisor as needed.