| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue | ¥2514.2B | ¥2560.1B | -1.8% |
| Operating Income | ¥73.4B | ¥68.6B | +6.9% |
| Ordinary Income | ¥68.4B | ¥65.6B | +4.3% |
| Net Income | ¥8.0B | ¥35.8B | -77.6% |
| ROE | 2.8% | 9.1% | - |
For the fiscal year ended March 2026 (Full Year), Revenue was ¥2,514.2B (YoY -¥45.9B -1.8%), a slight decline, while Operating Income was ¥73.4B (YoY +¥4.7B +6.9%) and Ordinary Income was ¥68.4B (YoY +¥2.8B +4.3%), delivering higher profits. Meanwhile, Net Income Attributable to Owners of Parent was ¥45.3B (prior year ¥36.4B +24.4%), up 24%, and Operating Cash Flow (OCF) improved substantially to ¥92.8B (YoY +165.6%). Revenue declined due to narrowing of the consolidated perimeter following the divestiture of the vehicle operation services business, but profitability improved due to gains on business disposals and cost reduction effects. Operating margin improved to 2.9% (up +0.2pt from 2.7% a year earlier), Free Cash Flow was ample at ¥113.2B, and the company repaid long-term borrowings of ¥123.4B, progressing financial soundness.
[Revenue] Revenue was ¥2,514.2B (-1.8%), a slight decrease. Core B2C subscription business declined to ¥942.9B (-3.0%), but B2B subscription business grew to ¥833.9B (+8.9%) and Social Services rose to ¥403.8B (+10.4%), providing underlying support. Vehicle operation services amounted to ¥145.8B (-46.3%), a large decline due to exclusion from consolidation following an in-period disposal; only results through September were recorded for the period. Segment composition was B2C Subscription 37.5%, B2B Subscription 33.2%, Social Services 16.1%, Vehicle Operation 5.8%, Others 7.5%. Double-digit growth in B2B and Social Services buoyed consolidated Revenue and mitigated the impact of the vehicle operation disposal.
[Profitability] Cost of sales was ¥1,775.0B (¥-5.8B), yielding a gross profit margin of 29.4% (flat YoY). SG&A was ¥665.7B (¥-17.0B -2.5%), improving SG&A ratio to 26.5% (down -0.2pt from 26.7%). Operating Income was ¥73.4B (+6.9%), improving operating margin to 2.9% (+0.2pt). Non-operating items netted -¥5.0B (prior year -¥3.0B), worsening, with interest expense of ¥6.1B (down from ¥7.7B) leading non-operating expenses to exceed non-operating income. Ordinary Income was ¥68.4B (+4.3%). Extraordinary items were net +¥5.9B, composed of Extraordinary Gains ¥23.5B (gain on sale of subsidiary shares ¥22.9B, valuation gain on step-acquisition of subsidiary shares ¥4.4B) less Extraordinary Losses ¥17.6B (impairment losses ¥17.1B, valuation losses on investment securities ¥0.5B). Profit before income taxes was ¥74.3B (+13.4%), income taxes were ¥28.3B (effective tax rate 38.1%), and after deducting non-controlling interests of ¥0.8B, Net Income Attributable to Owners of Parent was ¥45.3B (+24.4%). In conclusion, the company achieved higher profits despite revenue decline; excluding one-off gains from divestitures, operational improvements were confirmed.
B2C Subscription business: Revenue ¥942.9B (-3.0%), Operating Income ¥82.7B (-11.7%), Operating Margin 8.8%. Main home-delivery brands (Oisix, Daichi wo Mamoru Kai, Radish Boya) face customer churn management and ASP improvement issues among existing domestic customers but maintain high profitability. Purple Carrot was ¥731.7B (-27.5%), continuing weakness in overseas markets. B2B Subscription business: Revenue ¥833.9B (+8.9%), Operating Income ¥29.1B (+117.2%), Operating Margin 3.5%. Expansion of contracted projects for school lunches and corporate cafeterias and price adjustments significantly improved margins. Social Services: Revenue ¥403.8B (+10.4%), Operating Income ¥15.1B (+22.8%), Operating Margin 3.7%. Public demand, led by after-school care at ¥276.3B, is firm. Vehicle Operation Services: Revenue ¥145.8B (-46.3%), Operating Income ¥13.7B (-29.1%), Operating Margin 9.4%. Excluded from consolidation as of the end of September due to in-period disposal, resulting in large decreases in Revenue and profits, though the last operating period recorded the highest margin. Others: Revenue ¥217.0B (+2.7%), Operating Income ¥6.6B (-37.4%). After corporate-level cost adjustments, consolidated Operating Income totaled ¥73.4B.
[Profitability] Operating margin 2.9% (prior year 2.7%), Net margin 1.8% (prior year 1.4%) both improved. ROE is 15.6% (prior year 12.2%), high level, aided by financial leverage of 3.72x and improved net margin. ROA rose to 5.6% (prior year 4.7%). Gross profit margin 29.4% remained stable, and suppression of SG&A ratio to 26.5% enabled operating leverage. [Cash Quality] OCF/Net Income ratio is 2.05x, indicating high quality, supported by non-cash expenses such as depreciation ¥43.9B and impairment ¥17.1B. OCF/EBITDA ratio is 0.72x (EBITDA = Operating Income ¥73.4B + Depreciation ¥43.9B + Goodwill Amortization ¥11.9B = ¥129.2B), somewhat low, with an increase in trade receivables (¥-14.1B) restraining cash conversion. [Investment Efficiency] Total asset turnover rose to 2.33x (prior year 1.90x), improving asset efficiency. Tangible fixed asset turnover is high at 10.7x, reflecting restrained capital expenditures (¥11.0B, 0.25x of depreciation). [Financial Soundness] Equity Ratio is 26.9% (down -2.5pt from 29.4%), but Debt/EBITDA improved to 1.80x (Interest-bearing debt ¥232.1B ÷ EBITDA ¥129.2B) due to reduced interest-bearing debt. Current ratio 111.1%, Quick ratio 105.4% secure minimal liquidity. D/E ratio is 2.72x, indicating high leverage, but Interest Coverage is strong at 12.0x (EBIT ¥73.4B ÷ Interest Expense ¥6.1B).
Operating Cash Flow was ¥92.8B (YoY +165.6%), a marked improvement, demonstrating cash generation 11.6x Net Income ¥8.0B (Net Income per XBRL). From operating cash flow subtotal ¥115.8B, working capital movements included trade receivables -¥14.1B, inventories -¥1.1B, and trade payables -¥12.2B cash outflows, partially offset by contract liabilities +¥2.9B inflow. After corporate tax payments of ¥19.6B, final OCF was ¥92.8B. Investing cash flow was +¥20.4B, with capital expenditures -¥11.0B and intangible asset investments -¥7.7B, while proceeds from sale of subsidiary shares ¥34.7B (sale of Shidax HD etc.) generated significant cash inflow. Free Cash Flow was ample at ¥113.2B, funding dividend payments ¥6.9B and long-term borrowings repayment ¥208.8B. Financing cash flow was -¥91.9B, supplemented by long-term borrowings proceeds ¥110.2B and net increase in short-term borrowings ¥43.6B, while repayments and dividends resulted in cash outflows. Ending cash balance was ¥210.9B (YoY +¥21.4B), improving liquidity safety.
Ordinary Income ¥68.4B reflects a net non-operating expense burden of -¥5.0B against Operating Income ¥73.4B, with non-operating expenses ¥10.1B led by interest expense ¥6.1B weighing on earnings. Non-operating income ¥5.1B (interest income ¥0.4B etc.) was minor; most recurring earnings were secured at the operating level, indicating high core business profit quality. Extraordinary items were net +¥5.9B, representing a one-time uplift of about 13% relative to Net Income Attributable to Owners of Parent ¥45.3B (XBRL). The main component of Extraordinary Gains ¥23.5B was gain on sale of subsidiary shares ¥22.9B, while most of Extraordinary Losses ¥17.6B were impairment losses ¥17.1B (goodwill and fixed asset write-downs). On an accrual basis, OCF ¥92.8B was 2.05x Net Income ¥45.3B, with non-cash expenses (depreciation ¥43.9B, impairment ¥17.1B, goodwill amortization ¥11.9B) materially contributing to cash generation, while increases in trade receivables somewhat suppressed cash conversion efficiency. OCF/EBITDA ratio 0.72x reflects past working capital movements; improvement in receivables collection will be key in subsequent periods. The divergence between Ordinary Income and Net Income is about 1.5x due to extraordinary items and tax burden, so assessing core earning power on an Ordinary Income basis is appropriate.
The company’s forecast for the fiscal year ending March 2027 (Full Year) is Revenue ¥2,520B (YoY +0.2%), Operating Income ¥87B (+18.5%), Net Income Attributable to Owners of Parent ¥46B (+1.6%). Revenue is expected to be broadly flat, but profit growth is anticipated from margin improvements, projecting double-digit growth in Operating Income. Operating margin is planned to improve to 3.5% (full-year basis), premised on expansion of contracted projects for B2B Subscription and Social Services, continued cost optimization, and effects from disposal of low-margin businesses. EPS forecast is ¥132.44 (slight increase from current period ¥130.34), and dividend is planned as ¥0 (no dividend). Year-to-date progress rates show Operating Income at 84.4% (actual ¥73.4B ÷ forecast ¥87B), somewhat behind plan, but achievable given end-of-year push and consideration of last year’s one-off disposal gains. Net Income progress is 98.5% (¥45.3B ÷ ¥46B), nearly achieved, partly accelerated by extraordinary items. Revenue forecast is conservative and assumes ASP improvement among existing B2C customers and accumulation of new B2B contracted projects. Risk factors include re-acceleration of raw material and logistics costs and shifts in consumer sentiment, which could impede plan achievement.
Annual dividend is ¥20 (interim ¥8, year-end ¥12), payout ratio 15.3%, a conservative level. Total dividends paid were ¥6.94B (XBRL reported), and the dividend payout against Free Cash Flow ¥113.2B is 6.1%, very low, indicating a very high dividend sustainability. No share buybacks were conducted this period, so Total Return Ratio equals the payout ratio. Given cash balance ¥212.6B and OCF ¥92.8B, there is ample room for dividend increases, but with interest-bearing debt ¥232.1B (short-term ¥141.6B) and high leverage, priority is on debt repayment and restoring financial health. Next year’s forecast plans no dividend (¥0), indicating a priority on business restructuring and balance sheet improvement. The basis for setting the payout ratio is not explicitly stated, but there remains potential for dividend increases based on profit growth and cash generation, and clarification of medium-term shareholder return policy is expected.
Short-term borrowing dependence and liquidity risk: Of interest-bearing debt ¥232.1B, short-term borrowings are ¥141.6B (61%), indicating high short-term dependency and a shortened debt maturity profile. With a current ratio of 111.1% at a minimal level, failure to roll over short-term borrowings could pressure liquidity. Cash/short-term liabilities ratio is 1.50x, providing near-term capacity, but despite high OCF ¥92.8B relative to Net Income, concentrated maturities of short-term debt require monitoring.
Profitability dispersion across business portfolio: B2C Subscription has a high Operating Margin of 8.8% but Revenue is down -3.0%, while B2B Subscription and Social Services are growing but have low margins of 3.5% and 3.7% respectively. If the core B2C contracts shrink, consolidated margins could structurally decline. The disposal of the vehicle operation services removed a high-margin area, and maintaining customer retention and ASP improvement in B2C will be key to consolidated earnings.
Impairment risk on intangible assets and goodwill: Goodwill ¥77.3B and intangible fixed assets ¥229.8B total ¥307.1B, representing 28.4% of total assets. While impairment losses ¥17.1B were recorded this period, further deterioration in business conditions or failure to realize acquisition synergies could trigger additional impairments. With Net Assets ¥290.7B, the goodwill ratio is 26.6%, and a large impairment could further reduce Equity Ratio (currently 26.9%), harming financial soundness.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 2.9% | 4.6% (1.7%–8.2%) | -1.7pt |
| Net Margin | 0.3% | 3.3% (0.9%–5.8%) | -3.0pt |
Operating margin trails the industry median by 1.7pt, remaining a low-profit level within the retail sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | -1.8% | 4.3% (2.2%–13.0%) | -6.1pt |
Revenue growth lags the industry median by 6.1pt, indicating weaker growth position during a revenue-contraction phase.
※Source: Company compilation
Through portfolio restructuring and cost optimization, the company achieved +6.9% Operating Income growth despite Revenue decline, improving Operating Margin to 2.9% (prior year 2.7%). Operating Income increases in B2B Subscription (+117%) and Social Services (+22.8%) supported consolidated profitability, and the divestiture of Vehicle Operation Services removed low-margin areas. Going forward, maintaining cost discipline while expanding B2B and Social Services contracted projects is expected to continue driving margin improvement.
Free Cash Flow was ample at ¥113.2B, with OCF/Net Income 2.05x demonstrating high-quality cash generation. The company repaid long-term borrowings of ¥123.4B, reducing interest-bearing debt and improving Debt/EBITDA to 1.80x. However, short-term borrowings of ¥141.6B shortened the debt maturity profile, and the current ratio remains at a minimal level of 111.1%, so refinancing of short-term liabilities and improvement of working capital efficiency will be key to future financial soundness.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial data. Investment decisions should be made at your own responsibility; consult a professional as needed.