| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥382.0B | ¥337.2B | +13.3% |
| Operating Income | ¥15.2B | ¥15.9B | -4.8% |
| Equity-method Investment Gain/Loss | - | - | - |
| Ordinary Income | ¥15.1B | ¥15.8B | -4.9% |
| Net Income | ¥10.1B | ¥10.7B | -5.7% |
| ROE | 11.6% | 13.6% | - |
For the fiscal year ended April 2026, results were Revenue ¥382.0B (YoY +¥44.8B +13.3%), Operating Income ¥15.2B (YoY -¥0.8B -4.8%), Ordinary Income ¥15.1B (YoY -¥0.8B -4.9%), and Net Income attributable to owners of the parent ¥9.3B (YoY -¥0.9B -8.5%), landing in a revenue increase with profit decline. While revenue achieved double-digit growth, gross margin declined to 24.2% (YoY -0.9pt), compressing the operating margin to 4.0% (YoY -0.8pt). By segment, the core GoodsSales drove performance with Revenue ¥312.2B (+12.5%), but StoreDesign’s operating income fell to ¥1.8B (-33.0%), pressuring company margins. Conversely, OtherRelatedSolution sustained high growth with Revenue ¥30.9B (+24.9%) and contributed as a high-profit-margin segment with a 10.2% margin. Operating Cash Flow was ¥5.5B, only 0.55x of Net Income ¥10.1B, as working capital deterioration—inventory build-up (-¥6.4B) and accounts receivable increase (-¥2.4B)—suppressed cash generation. Aggressive growth investments (CapEx ¥16.4B) resulted in Free Cash Flow of -¥13.5B, funded by new long-term borrowings (net increase ¥8.2B). Financial soundness remains solid with an Equity Ratio of 46.9%, Debt/EBITDA 1.21x, and Interest Coverage 49x, maintaining stable leverage.
Revenue of ¥382.0B rose 13.3% YoY, achieving double-digit growth. By segment, GoodsSales led with ¥312.2B (+12.5%, 81.7% of total), comprised of Cosmetics etc. ¥202.9B (+17.7%), Beauty salon equipment & supplies ¥104.1B (+4.0%), and Metal steel furniture ¥4.9B (+3.7%), with cosmetics showing notable growth. StoreDesign was steady at ¥39.2B (+9.9%), and OtherRelatedSolution maintained high growth at ¥30.9B (+24.9%). The rising mix of cosmetics depressed gross margin to 24.2% (YoY -0.9pt), putting downward pressure on profitability despite revenue expansion. No geographic breakdown was disclosed, but consolidation effects from multiple subsidiaries likely contributed to revenue growth.
Profitability: Gross profit ¥92.5B (+9.4%) lagged revenue growth, with gross margin 24.2% (YoY -0.9pt). SG&A was ¥77.3B (+12.7%), controlled below revenue growth, with an SG&A ratio of 20.2% (YoY -0.1pt) slightly improving. Although fixed-cost increases including goodwill amortization ¥0.7B were absorbed, the decline in gross margin weighed heavily, resulting in Operating Income ¥15.2B (-4.8%) and an operating margin of 4.0% (YoY -0.8pt). By segment, StoreDesign’s Operating Income dropped substantially to ¥1.8B (-33.0%), pressuring corporate margins; OtherRelatedSolution decreased slightly to ¥3.1B (-3.7%). GoodsSales secured modest growth in operating income to ¥12.5B (+0.5%). Non-operating items were minor: Non-operating income ¥0.6B (foreign exchange gains ¥0.2B, etc.), Non-operating expenses ¥0.7B (interest expense ¥0.3B, FX losses ¥0.1B, etc.), producing Ordinary Income ¥15.1B (-4.9%). Extraordinary items were roughly neutral—Extraordinary income ¥0.2B (gain on disposal of fixed assets), Extraordinary loss ¥0.2B (loss on valuation of investment securities, etc.)—yielding Pre-tax Income ¥15.0B (-5.2%), Income Taxes ¥5.0B (effective tax rate 33.1%), and Non-controlling Interests ¥0.7B, resulting in Net Income attributable to owners of the parent ¥9.3B (-8.5%). In conclusion, while revenue rose driven by core cosmetics expansion, declining gross margins and deterioration in StoreDesign profitability produced a revenue-increase/profit-decline outcome.
GoodsSales is the core segment with Revenue ¥312.2B (+12.5%), Operating Income ¥12.5B (+0.5%), and margin 4.0%, accounting for 81.7% of sales. Growth in cosmetics (+17.7%) drove the segment, but margin remained flat at 4.0%, likely due to price competition and changes in procurement mix suppressing profitability. StoreDesign achieved solid revenue growth to ¥39.2B (+9.9%) but suffered a large decline in Operating Income to ¥1.8B (-33.0%), with margin deteriorating to 4.7% (down 3.0pt from 7.7%), likely due to rising construction costs and adverse project mix. OtherRelatedSolution maintained high growth at ¥30.9B (+24.9%) with Operating Income ¥3.1B (-3.7%) and a high margin of 10.2% (down 0.5pt from 10.7%), supported by expansion of ancillary solutions such as real estate brokerage, IT support, and insurance services. Consolidated Operating Income after corporate adjustments was ¥15.2B, structured as segment aggregate profit ¥17.5B less corporate expenses -¥2.3B.
Profitability: Operating margin 4.0% (prior year 4.7%), Net margin 2.4% (prior year 3.0%), indicating margin compression. ROE is 11.6%, down from approximately 14% last year but remaining in double digits. Gross margin 24.2% decreased by 0.9pt YoY, while SG&A ratio 20.2% improved by 0.1pt, showing effective cost control but insufficient to offset gross margin decline. Cash quality: Operating Cash Flow / Net Income is 0.55x, Operating Cash Flow / EBITDA is 0.30x, both low, indicating weak cash generation. The main cause is working capital deterioration from inventory build-up (-¥6.4B) and accounts receivable increase (-¥2.4B); accrual ratio is 2.0% and good, but cash conversion lag is evident. Investment efficiency: Total asset turnover is 2.06x (Revenue ¥382.0B / Total Assets ¥185.3B), Equity turnover is 4.55x, reflecting high efficiency. CapEx was ¥16.4B, 4.7x depreciation ¥3.5B, reflecting aggressive growth investment. Financial soundness: Equity Ratio 46.9% (prior year 48.4%), Debt/EBITDA 1.21x, Debt/Capital 20.6% indicating conservative leverage, and Interest Coverage 49x (EBITDA ¥18.6B / interest expense ¥0.3B) showing very high interest-bearing capacity. Current ratio 195% and Quick ratio 141% indicate sufficient short-term liquidity.
Operating Cash Flow was ¥5.5B (YoY -61.1%), a large decline and only 0.55x of Net Income ¥10.1B. Operating activities subtotal was ¥14.8B (Pre-tax income ¥15.0B + Depreciation and amortization ¥3.5B + Goodwill amortization ¥0.7B - Equity-method investment loss ¥0.2B, etc.), from which working capital deterioration had a major impact. Inventory increased by -¥6.4B and accounts receivable increased by -¥2.4B, while accounts payable increased by +¥2.4B partially offsetting; corporate tax payments -¥9.2B were also a burden, reducing Operating Cash Flow from ¥14.2B in the prior year to ¥5.5B. Investing Cash Flow was -¥19.0B, mainly CapEx -¥16.4B, acquisition of intangible fixed assets -¥0.8B, and acquisition of investment securities -¥1.1B. Including net decrease in time deposits -¥0.03B, Free Cash Flow was -¥13.5B (prior year +¥7.8B). Financing Cash Flow was +¥4.3B, driven by net long-term borrowings of +¥6.7B (new long-term borrowings ¥16.6B less repayments -¥9.9B), which financed dividends -¥2.0B and share buybacks -¥1.7B. Cash and cash equivalents decreased by -¥9.2B from ¥44.4B at the beginning of the period to ¥35.3B at period end, with cash & deposits balance ¥35.4B. If the working capital build-up is temporary, inventory turnover and collection cycle normalization could materially improve Operating Cash Flow.
Earnings quality is generally good; Non-operating income ¥0.6B (0.16% of Revenue) indicates very low reliance on non-core items, with most profits derived from main operations. Non-operating income mainly consisted of foreign exchange gains ¥0.2B and miscellaneous income ¥0.1B, with limited transitory nature. Extraordinary items were neutral—Extraordinary income ¥0.2B (gain on disposal of fixed assets), Extraordinary loss ¥0.2B (loss on valuation of investment securities, etc.)—so one-off impacts were minor. The gap between Ordinary Income ¥15.1B and Net Income ¥10.1B is explained by Income Taxes ¥5.0B (effective tax rate 33.1%) and Non-controlling Interests ¥0.7B, showing no structural distortion. Accrual ratio is low at 2.0% (Net Income ¥10.1B − Operating Cash Flow ¥5.5B = ¥4.6B / Total Assets ¥185.3B), indicating conservative profit recognition. However, Operating Cash Flow substantially below Net Income points to delayed cash realization from inventory and receivables, warranting attention to short-term cash quality. Operating activities subtotal ¥14.8B less tax payments -¥9.2B and working capital increases -¥5.1B resulted in Operating Cash Flow ¥5.5B, highlighting tax burden and inventory/receivables management as bottlenecks for cash generation.
The company’s full-year forecast for the fiscal year ending April 2027 is Revenue ¥431.5B (YoY +13.0%), Operating Income ¥22.2B (+46.0%), Ordinary Income ¥22.0B (+46.0%), and Net Income attributable to owners of the parent ¥13.5B (+45.0%). The assumed operating margin is approximately 5.1%, implying a 1.1pt improvement from this period’s 4.0%, premised on gross margin recovery and SG&A leverage. EPS forecast is ¥107.71, and annual dividend forecast is ¥9.00 (Payout Ratio 8.4%), indicating a plan to return part of earnings through dividends. Compared to current results, revenue progress ratio is 88.5% (¥382.0B / ¥431.5B) and operating income progress ratio is 68.5% (¥15.2B / ¥22.2B), implying substantial profit uplift is expected in H2. Achieving the plan requires margin recovery in StoreDesign, gross margin improvement in core GoodsSales (price revisions, procurement negotiation, higher share of high-margin private-brand products), and normalization of inventory turnover. A 46% increase in operating income represents a reversal from prior declines; it is achievable if segment mix improves (higher share of high-margin solutions) and expense absorption strengthens. Meanwhile, the dividend forecast of ¥9.00 is a reduction from this period’s dividend of ¥16, reflecting a prioritization of investment and a buffer tied to performance.
This period’s dividend was annual ¥16 (interim ¥8, year-end ¥8), with a Payout Ratio of approximately 21.9% (Total dividends ¥0.201B / Net Income ¥9.32B), a sustainable level relative to earnings. Additionally, share buybacks of ¥1.7B were executed, making total shareholder returns ¥3.7B (Total Return Ratio approximately 40%). The dividend represented a substantial increase of ¥9 from prior year annual ¥7, reflecting a shareholder-friendly stance amid prior profit growth. However, Free Cash Flow was -¥13.5B, and Free Cash Flow coverage was -6.62x, meaning dividends were not covered by cash generation and were financed by borrowings (net long-term borrowings increase ¥8.2B), characteristic of a temporary, investment-first phase. Next period dividend forecast of ¥9.00 is a reduction from this period, but with forecast EPS ¥107.71 the implied payout ratio is 8.4%, a conservative setting to preserve investment capacity and buffer against performance variability. Given cash & deposits ¥35.4B and potential improvement in Operating Cash Flow (via inventory normalization), dividend sustainability appears adequately secured.
Gross Margin Decline Risk: Gross margin at 24.2% declined by 0.9pt YoY, and the rising composition of cosmetics (sales growth +17.7%) has accelerated margin dilution. The core GoodsSales (81.7% of revenue) is sensitive to price competition and procurement conditions; intensified competition from rival EC sites and wholesalers could sustain downward pressure on prices. If gross margin falls a further 1pt, Operating Income would decline by approximately ¥3.8B, reducing operating margin toward around 3.0%, materially impairing profitability.
Inventory & Working Capital Management Risk: Inventory ¥37.4B increased by ¥3.6B YoY and pressured Operating Cash Flow by -¥6.4B. Accounts receivable also rose to ¥39.7B (+¥3.6B), and the build-up of working capital is hindering cash conversion. Inventory turnover days are about 35 days (Inventory ¥37.4B / Revenue ¥382.0B × 365), short compared with manufacturing but significant for a wholesaler; risks include valuation losses and obsolescence, higher storage costs, and ongoing funding strain. If Operating Cash Flow / Net Income ratio of 0.55x does not improve, reliance on borrowings may increase and financial flexibility may decline.
Deterioration in StoreDesign Profitability: StoreDesign’s Operating Income fell to ¥1.8B (-33.0%), with margin deteriorating to 4.7% (from 7.7%), despite Revenue increasing by 9.9%. Rising construction costs and adverse order mix have materially eroded profitability. If this segment’s operating income remains at current levels, company-wide operating margin improvement will be limited, raising the bar for achieving next period’s guidance (+46% operating income). Delays in implementing profitability restoration (cost control, selective order acceptance, price adjustments) could create a structural drag on earnings.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 4.0% | 3.4% (1.4%–5.0%) | +0.6pt |
| Net Margin | 2.6% | 2.3% (1.0%–4.6%) | +0.3pt |
Profitability exceeds the industry median, placing the company at a favorable level among specialized trading companies and wholesalers.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 13.3% | 5.9% (0.4%–10.7%) | +7.5pt |
Revenue growth significantly outpaces the industry median, reflecting active business expansion.
※ Source: Company compilation
Structure of revenue increase and profit decline, and ability to restore margins: The company achieved double-digit revenue growth of +13.3%, but gross margin declined by 0.9pt and StoreDesign’s Operating Income fell 33.0%, shrinking operating margin to 4.0% (down 0.8pt). Next period guidance assumes improvement to about 5.1% operating margin (+1.1pt), based on gross margin recovery and SG&A leverage. Key execution items for restraining margin dilution from the higher cosmetics mix include price revisions, expansion of private-brand products, and procurement negotiation, while restoring StoreDesign profitability requires cost control and order selection. Although operating margin is +0.6pt above industry median, it remains below the company’s prior-year level (4.7%), necessitating quantitative monitoring of margin restoration progress.
Normalization of inventory & working capital and cash generation: Operating Cash Flow ¥5.5B is only 0.55x of Net Income ¥10.1B, impeded by inventory +¥6.4B and accounts receivable +¥2.4B. Improvement in inventory turnover and collection cycles could substantially improve Operating Cash Flow. The company invested aggressively (CapEx ¥16.4B, 4.7x depreciation) to expand growth capacity, but Free Cash Flow was -¥13.5B. If inventory normalization and Operating Cash Flow recovery occur next period, investment and shareholder return capacity will expand and financial flexibility will improve. Debt/EBITDA 1.21x and Interest Coverage 49x indicate good financial health, but sustained growth requires enhancement of cash generation through working capital management.
High-growth OtherRelatedSolution and improvement in business portfolio quality: OtherRelatedSolution sustained high growth (+24.9%) and a high margin of 10.2%, well above the company average. Expansion of peripheral solutions such as real estate brokerage, IT support, and insurance helps diversify a revenue structure dependent on core GoodsSales (margin 4.0%). If the revenue share of solution businesses increases, it could materially lift consolidated margins. However, operating income declined slightly -3.7% this period; maintaining high growth and profitability is a challenge. Improving segment mix and profitability at each business (StoreDesign margin recovery, accelerated solution growth) will be decisive for achieving next period guidance and enhancing long-term enterprise value.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company from publicly disclosed financial statements. Investment decisions should be made at your own responsibility, and you should consult professionals as necessary.