| Indicator | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1121.0B | ¥925.8B | +21.0% |
| Operating Income / Operating Profit | ¥91.2B | ¥69.4B | +31.4% |
| Ordinary Income | ¥91.2B | ¥68.3B | +33.6% |
| Net Income / Net Profit | ¥59.6B | ¥45.7B | +30.5% |
| ROE | 13.5% | 11.3% | - |
The cumulative results for FY2026 Q3 (July 2025–March 2026) show Revenue of ¥1,121.0B (YoY +¥195.2B +21.0%), Operating Income of ¥91.2B (YoY +¥21.8B +31.4%), Ordinary Income of ¥91.2B (YoY +¥22.9B +33.6%), and Net Income of ¥59.6B (YoY +¥13.9B +30.5%), achieving double-digit growth across all four metrics. Operating margin improved to 8.1% from 7.5% a year earlier, a 0.6pt improvement, highlighting profit outperformance against revenue expansion. Progress toward the full year guidance stands at Revenue 76.2%, Operating Income 84.7%, Ordinary Income 86.1%, and Net Income 80.4%, significantly above the standard Q3 progress benchmark of 75%, with especially notable front-loading in profit metrics.
[Revenue] Revenue reached ¥1,121.0B (YoY +21.0%), a significant increase. The company operates a single segment of restaurant operations; the primary drivers of growth are believed to be robust same-store sales and contributions from new store openings, expanding the store network. Cost of goods sold amounted to ¥385.0B (prior year ¥323.5B, +19.0%), growing at a pace below revenue, and the cost of goods sold ratio improved to 34.3% from 35.0% a year earlier (0.6pt improvement). As a result, gross profit was ¥736.0B (prior year ¥602.2B, +22.2%), and gross margin improved to 65.7% (prior year 65.0%) by 0.6pt, reflecting effects of price/menu mix optimization and procurement efficiency gains.
[Profitability] Selling, general and administrative expenses were ¥644.8B (prior year ¥532.8B, +21.0%), increasing in line with revenue, and the SG&A ratio edged down slightly to 57.5% from 57.6% a year earlier (0.1pt decrease). This indicates maintenance of scale merits while absorbing increased labor and rent costs associated with store expansion. Operating Income was ¥91.2B (+31.4%), and Operating Margin improved to 8.1% (prior year 7.5%) by 0.6pt, driven by both gross margin improvement and SG&A control. Non-operating income was ¥2.5B (including ¥1.5B foreign exchange gain), and non-operating expenses were ¥2.5B (including ¥2.0B interest expense and ¥0.7B foreign exchange loss), resulting in a neutral balance and Ordinary Income of ¥91.2B (+33.6%) that carried through the operating-level improvement. Extraordinary gains were ¥1.5B and extraordinary losses ¥2.3B (including ¥1.4B loss on disposal of fixed assets and ¥1.3B valuation loss on investment securities), yielding a net extraordinary charge of ▲¥0.8B, limited as a temporary factor. Pre-tax income was ¥90.5B, with income taxes of ¥30.9B (effective tax rate 34.1%), resulting in Net Income of ¥59.6B (+30.5%). In conclusion, the company achieved revenue and profit growth by balancing store expansion with cost control.
[Profitability] Operating Margin is 8.1% (prior year 7.5%), a 0.6pt improvement reflecting a 0.6pt decline in cost of goods sold ratio and a 0.1pt slight reduction in SG&A ratio. Net Profit Margin is 5.3% (prior year 4.9%), a 0.4pt improvement, and ROE is 13.5%, indicating solid capital efficiency. [Cash Quality] Relative to Operating Income of ¥91.2B, Interest Coverage (Operating Income ÷ Interest Expense) is 44.7x, indicating very strong coverage and minimal interest burden. The difference between Accounts Receivable ¥71.6B and Accounts Payable ¥62.1B is limited to ¥9.5B, showing efficient working capital management. [Investment Efficiency] Total Asset Turnover is 1.33x (Revenue ¥1,121.0B ÷ Average Total Assets ¥843B), maintaining good turnover efficiency within a fixed-asset-centric business model. [Financial Soundness] Equity Ratio is 52.5% (prior year 54.5%), remaining at a solid level. Interest-bearing debt (short-term borrowings ¥10B + long-term borrowings ¥110.9B + corporate bonds ¥10B) totals ¥130.9B, and D/E ratio is 0.30x, conservative. Cash and deposits are ¥161.0B, and current ratio is 123.6% (current assets ¥275.7B ÷ current liabilities ¥223.0B), indicating adequate short-term liquidity.
Recurring earnings were strong this period due to a significant increase in Operating Income. Accounts Receivable rose to ¥71.6B (prior year ¥52.3B, +37.0%), and Accounts Payable rose to ¥62.1B (prior year ¥44.9B, +38.4%), reflecting an increase in working capital consistent with business expansion. Inventories were ¥8.6B (prior year ¥7.5B), a modest rise, indicating appropriate inventory control. Cash and deposits increased considerably to ¥161.0B (prior year ¥125.2B, +28.6%). Long-term borrowings increased to ¥110.9B (prior year ¥83.1B, +33.4%), suggesting a financing strategy balancing growth investment and liquidity. Non-operating income and expenses offset at ¥2.5B each, and the net extraordinary charge of ▲¥0.8B was limited, supporting the conclusion that core business-driven cash generation underpins the quality of the results.
Net Income of ¥59.6B links cleanly from Operating Income ¥91.2B to Ordinary Income ¥91.2B, with non-operating income ¥2.5B (foreign exchange gain ¥1.5B, other ¥0.5B) and non-operating expenses ¥2.5B (interest expense ¥2.0B, foreign exchange loss ¥0.7B, other ¥0.4B) in balance, indicating a high proportion of recurring earnings. Extraordinary gains ¥1.5B and extraordinary losses ¥2.3B (loss on disposal of fixed assets ¥1.4B, valuation loss on investment securities ¥1.3B, impairment loss ¥0.3B) produced a net extraordinary amount of ▲¥0.8B, limited and temporary, so the bulk of the pre-tax income ¥90.5B is attributable to core operations. Comprehensive income was ¥59.0B (owners of parent ¥59.3B), close to Net Income ¥59.6B; translation adjustment ▲¥0.7B and actuarial adjustment related to retirement benefits ¥0.1B had minor impacts, indicating high earnings quality. The effective tax rate of 34.1% is somewhat high but represents a recurring tax burden and does not undermine earnings sustainability.
Full year guidance remains Revenue ¥1,471.6B (YoY +18.7%), Operating Income ¥107.7B (+16.5%), Ordinary Income ¥106.0B (+17.3%), Net Income ¥74.2B, EPS ¥192.53, and dividend ¥20. As of the Q3 cumulative period, progress toward guidance is Revenue 76.2%, Operating Income 84.7%, Ordinary Income 86.1%, and Net Income 80.4% (¥59.6B against forecast ¥74.2B), well above the standard Q3 progress benchmark of 75%. There is particularly pronounced front-loading of approximately 10pt or more in Operating and Ordinary Income, likely driven by gross margin improvement and SG&A control. If this pace persists, there is high potential for upside to the full-year guidance, suggesting the company’s plan assumptions are conservative.
Quarterly dividend is ¥20, and with Net Income ¥59.6B (EPS ¥155.67), the payout ratio is approximately 12.9%, remaining at a low level. Full year dividend guidance is ¥20 (payout ratio 10.4%), reflecting continued emphasis on internal reserves. Retained earnings stand at ¥349.5B (prior year ¥304.2B), and with cash and deposits ¥161.0B and ROE 13.5%, dividend continuity is highly secure. There is significant scope for future dividend increases, and the company is at a stage to monitor the balance between growth investment and shareholder returns.
Cost inflation risk: While cost of goods sold ratio 34.3% (prior year 35.0%) and SG&A ratio 57.5% (prior year 57.6%) currently show improvement trends, continued upward pressure on labor and food costs could compress gross and operating margins depending on external conditions. A large portion of SG&A ¥644.8B comprises fixed-cost items such as labor and rent; if revenue growth slows, operating leverage could reverse.
Store expansion investment and existing-store risk: Total assets are ¥844.4B (prior year ¥740.3B, +14.1%), and tangible fixed assets are ¥449.0B (prior year ¥414.8B, +8.2%), reflecting ongoing investment tied to store expansion. Risks include slower ramp-up curves for new openings, cannibalization with existing stores, and intensified location competition, which could dampen existing-store sales growth. Loss on disposal of fixed assets ¥1.4B and impairment loss ¥0.3B have been recorded, underscoring the need for continuous monitoring of store profitability.
Interest rate risk: Long-term borrowings increased to ¥110.9B (prior year ¥83.1B, +33.4%). Current interest expense of ¥2.0B is modest, but future interest rate increases could raise funding costs and reduce the current Interest Coverage ratio of 44.7x. Attention should be paid to the maturity profile of interest-bearing debt, including corporate bonds ¥10B, and the composition of fixed vs. floating rate borrowings.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 8.1% | 3.9% (1.2%–8.9%) | +4.2pt |
| Net Profit Margin | 5.3% | 2.2% (0.2%–5.7%) | +3.1pt |
Profitability significantly exceeds the industry median, with Operating Margin +4.2pt and Net Profit Margin +3.1pt advantages.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 21.0% | 3.0% (-0.1%–9.2%) | +17.9pt |
Revenue growth outpaces the industry median by +17.9pt, highlighting high growth driven by both store network expansion and robust same-store performance.
※ Source: Company compilation
Front-loading of profit growth and potential full-year upside: Progress to date is Operating Income 84.7% and Ordinary Income 86.1%, well above the standard Q3 75%, with operating leverage from a 0.6pt gross margin improvement and slight SG&A ratio reduction. If maintained, full-year upside is in view, suggesting conservative planning assumptions. The trend of a declining cost of goods sold ratio and sustainability of scale merits are points to monitor.
Balancing financial capacity and growth investment: With an Equity Ratio of 52.5%, cash of ¥161.0B, and D/E ratio 0.30x, the company maintains a solid financial base while increasing long-term borrowings by +33.4% to continue growth investments. With a low payout ratio of 12.9% and retained earnings of ¥349.5B, and ROE 13.5% indicating good capital efficiency, there is ample headroom for both future dividend increases and investment. High interest tolerance backed by Interest Coverage of 44.7x supports sustainability of the growth strategy.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings disclosure data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial disclosures. Investment decisions should be made at your own responsibility and, if necessary, after consulting a professional advisor.