About Quarterly Earnings Report Disclosures
| Item | Current | Prior | YoY % |
|---|---|---|---|
| Net Sales | ¥24.42B | ¥26.52B | -7.9% |
| Operating Income | ¥939M | ¥2.02B | -53.5% |
| Ordinary Income | ¥922M | ¥2.00B | -54.0% |
| Net Income | ¥613M | ¥1.36B | -55.1% |
| Basic EPS | ¥28.33 | ¥63.03 | -55.1% |
| Diluted EPS | ¥28.32 | ¥62.71 | -54.8% |
| Dividend Per Share | ¥0.00 | ¥0.00 | - |
| Item | Current End | Prior End | Change |
|---|---|---|---|
| Total Assets | ¥17.35B | ¥18.09B | ¥-734M |
| Total Equity | ¥9.43B | ¥10.17B | ¥-738M |
| Owners' Equity | ¥9.43B | ¥10.17B | ¥-737M |
| Item | Value |
|---|---|
| Net Profit Margin | 2.5% |
| Item | YoY Change |
|---|---|
| Net Sales YoY Change | -7.9% |
| Operating Income YoY Change | -53.5% |
| Ordinary Income YoY Change | -54.0% |
| Net Income YoY Change | -55.1% |
| Item | Value |
|---|---|
| Shares Outstanding (incl. Treasury) | 22.20M shares |
| Treasury Stock | 782K shares |
| Average Shares Outstanding | 21.65M shares |
| Book Value Per Share | ¥440.34 |
| Item | Amount |
|---|---|
| Q2 Dividend | ¥0.00 |
| Year-End Dividend | ¥40.00 |
| Item | Forecast |
|---|---|
| Net Sales Forecast | ¥51.70B |
| Operating Income Forecast | ¥2.49B |
| Ordinary Income Forecast | ¥2.45B |
| Net Income Forecast | ¥1.64B |
| Basic EPS Forecast | ¥76.47 |
| Dividend Per Share Forecast | ¥47.00 |
This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.
Verdict: FY2026 Q2 was a weak quarter for Syuppin, marked by a sharp profit contraction and margin compression despite a modest top-line decline. Revenue fell 7.9% YoY to 244.24, while operating income dropped 53.5% YoY to 9.39 and net income declined 55.1% to 6.13. Operating margin compressed to 3.8% from roughly 7.6% a year ago, a deterioration of about 377 bps, pointing to negative operating leverage and/or mix pressure. Net margin fell to 2.5% from approximately 5.1% a year earlier, a compression of around 264 bps. Ordinary income decreased similarly (-54.0% YoY to 9.22), indicating the weakness is primarily operational rather than non-operating. DuPont analysis shows ROE at 6.5%, composed of a 2.5% net margin, 1.41x asset turnover, and 1.84x financial leverage. Financial leverage of 1.84x (assets/equity) aligns with the reported balance sheet (173.54 assets, 94.30 equity), suggesting a relatively conservative capital structure. Asset turnover at 1.41x is healthy for a specialty retailer, but compressed margins outweighed efficiency. ROIC is 7.0%, at the low end of a typical target range (7–8%), implying economic value creation is marginal after cost of capital. Earnings quality cannot be assessed fully as cash flow data are unreported; OCF/NI and FCF coverage are not calculable. The reported payout ratio of 144.8% indicates dividends exceed earnings in the period, raising sustainability concerns absent strong free cash flow. Equity ratio (equity/assets) is approximately 54.3%, indicating balance sheet resilience despite earnings softness. The scale of profit decline suggests either gross margin pressure (e.g., pricing, mix, promotions) or rising SG&A intensity; however, SG&A and gross profit were not disclosed. Forward-looking, the company likely needs margin repair (pricing, mix normalization, inventory discipline) and cost control to stabilize ROE back toward an 8–10% range. Monitoring inventory turns, discounting, and high-margin category mix (e.g., watches vs cameras) will be critical. With limited leverage and solid equity buffer, financial risk is contained, but dividend flexibility may be needed if cash generation mirrors earnings. Overall, the quarter underscores cyclical and competitive pressures in pre-owned premium goods, with recovery hinging on demand normalization and improved margin execution.
ROE decomposition: ROE = Net Profit Margin × Asset Turnover × Financial Leverage = 2.5% × 1.407 × 1.84 ≈ 6.5%. The largest negative driver YoY is net profit margin, which declined from roughly 5.1% to 2.5% (≈ -264 bps), while asset turnover at 1.41x appears stable and leverage at 1.84x remains conservative. Business explanation: operating income fell 53.5% on only a 7.9% revenue decline, indicating negative operating leverage from either gross margin compression (pricing/promotional activity, mix shift away from high-margin SKUs) and/or SG&A intensity increase. Sustainability: margin compression could be partly cyclical (weak discretionary demand) but requires evidence of stabilization; absent structural cost actions, recovery may be gradual. Flags: profit declined faster than revenue, implying operating deleverage; without SG&A disclosure we cannot confirm, but risk that SG&A growth outpaced revenue is elevated. Operating margin fell to 3.8% from ~7.6% (≈ -377 bps), reducing ROIC to 7.0%, at the low end of target ranges.
Top-line contracted 7.9% YoY to 244.24, likely reflecting softer demand in core categories (pre-owned cameras/watches) and possibly weaker conversion amid price sensitivity. Profitability deteriorated disproportionately: operating income -53.5% to 9.39 and net income -55.1% to 6.13, reflecting negative operating leverage and margin pressure. Ordinary income tracked operating weakness (-54.0%), indicating limited offset from non-operating items. Run-rate EPS (basic) at 28.33 JPY for H1 suggests annualization would lag prior years unless H2 seasonality or margin recovery materializes. With ROIC at 7.0%, incremental growth must be margin-accretive to exceed the cost of capital; otherwise, expansion risks value dilution. Outlook hinges on normalization of discounting, inventory discipline, and mix improvement; any rebound in high-ticket, high-margin items (e.g., luxury watches, lenses) would benefit margins. Near-term growth visibility is limited given the breadth of profit compression; watch for holiday demand and pricing power in H2.
Equity ratio (equity/assets) is approximately 54.3% (94.30/173.54), indicating a strong capital base and low structural leverage. Debt metrics (interest-bearing debt, D/E) are unreported; we cannot compute D/E or interest coverage. Liquidity indicators (current ratio, quick ratio, working capital) are unreported; therefore, no explicit warning on current ratio can be made. Maturity mismatch risk cannot be assessed due to lack of short-term debt and current asset disclosures; inventory-heavy models typically carry working capital sensitivity. No off-balance sheet obligations are disclosed in the provided data.
Operating cash flow, working capital movements, and capex are unreported; OCF/Net Income and FCF cannot be calculated. Given the business model, inventory and payables timing can materially swing OCF; without data we cannot validate earnings conversion. Dividend coverage by FCF is not assessable. Potential quality consideration: the magnitude of profit decline alongside possible promotional activity suggests a risk that working capital needs (inventory aging/markdowns) may have increased, but this is not confirmable from disclosed figures.
The calculated payout ratio is 144.8%, implying dividends exceeded earnings in the period. Without OCF/FCF data, sustainability is uncertain; coverage may rely on balance sheet capacity or prior retained earnings. With an equity ratio of ~54%, the balance sheet appears sound, but persistent payout above earnings would erode flexibility if cash generation mirrors net income weakness. Policy outlook: management may need to calibrate dividends to FCF rather than earnings if margin recovery is delayed; absent FCF disclosure, near-term visibility is low.
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Relative Positioning: Within domestic specialty retailers of pre-owned premium goods, Syuppin currently exhibits below-peer profitability momentum given substantial margin compression, but maintains a comparatively strong equity buffer; restoring pricing power and inventory efficiency will be key to re-approaching an 8–10% ROE corridor.
This analysis was auto-generated by AI. Please note the following: