DREAM VISION CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥1.81B
• Operating Income: ¥-147M
• Net Income: ¥-181M
• EPS: ¥-9.87

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Yumetenbo Co., Ltd. (3185) reported FY2026 Q2 (cumulative) consolidated results under IFRS showing a contraction in topline and continued operating losses, with leverage magnifying the impact on equity. Revenue was 18.07 billion JPY-equivalent in 100M units (18.07), down 18.0% YoY, indicating soft demand and/or weaker conversion in its apparel-focused commerce model. Gross profit is disclosed at 9.47, implying a high gross margin of 52.4%; however, this is internally inconsistent with the reported cost of sales of 12.57, which would otherwise imply a gross profit of 5.50. Despite this data inconsistency, SG&A of 11.70 outpaced gross profit, resulting in operating income of -1.47 and an operating margin of roughly -8.1%. Net loss was -1.81, translating to a net margin of -10.0% and EPS of -9.87 JPY. Depreciation and amortization were modest at 0.47, yielding EBITDA of -1.00 and an EBITDA margin of -5.6%, pointing to limited operating leverage and fixed-cost absorption challenges amid revenue decline. The DuPont breakdown highlights the strain: net margin of -10.0%, asset turnover of 0.773, and high financial leverage of 10.12x combined for a calculated ROE of -78.3%, confirming sharp equity erosion. The balance sheet shows total assets of 23.38 and total liabilities of 21.94, leaving total equity of only 2.31 (equity ratio 9.9%), indicating a thin capital buffer. Inventories are sizable at 11.00 relative to sales scale, heightening obsolescence and markdown risk if demand remains weak. Operating cash flow was negative at -1.32, while investing cash flow was positive at 2.39, likely due to asset disposals, producing positive FCF of 1.07 on a cash-flow-definition basis (OCF + investing CF). Financing cash flow was -0.62, suggesting net repayments or settlement of liabilities despite losses, which may pressure liquidity absent external support. Cash and equivalents stood at 5.14, offering some near-term cushion, but the low equity base and persistent losses elevate solvency risk if performance does not stabilize. The current asset figure (23.86) exceeds total assets (23.38), suggesting classification or disclosure inconsistencies; several key items (cash breakdown, interest-bearing debt, current liabilities) are unreported, limiting ratio analysis precision. Negative retained earnings of -25.15 alongside capital surplus of 9.71 underscore cumulative deficits; dividend capacity is effectively constrained. Overall, the profile reflects a challenged apparel/EC operator with declining revenue, negative operating margins, high leverage, and reliance on non-operating cash inflows to support liquidity in the period. Data gaps and inconsistencies require caution, but the available figures signal the need for improved demand, tighter cost control, and working capital discipline to restore financial resilience.

Profitability Analysis

ROE_decomposition: DuPont indicates ROE of -78.3% = Net margin (-10.0%) × Asset turnover (0.773) × Financial leverage (10.12x). The primary driver is negative net margin, amplified by high leverage; asset turnover is modest and not sufficient to offset the margin drag. margin_quality: Reported gross margin is 52.4% (gross profit 9.47 / revenue 18.07), but conflicts with cost of sales of 12.57 (which would imply a 30.5% gross margin). Operating margin is -8.1% (operating loss -1.47 / revenue 18.07). Net margin is -10.0%. EBITDA margin is -5.6%, indicating limited operating flexibility and negative contribution after SG&A. operating_leverage: Revenue fell 18.0% YoY while SG&A (11.70) exceeded gross profit, producing an operating loss. With D&A of 0.47, fixed cost absorption is weak; incremental revenue recovery would help, but current cost base appears misaligned with sales scale.

Growth Assessment

revenue_sustainability: Revenue declined 18.0% YoY to 18.07, suggesting demand softness or competitive pressures in apparel/e-commerce channels. Without disclosed segment/channel granularity, sustainability is uncertain. profit_quality: Operating loss (-1.47) and negative EBITDA (-1.00) indicate core profitability weakness. Net loss (-1.81) is not driven by tax effects (effective tax rate -2.6% on a loss base), pointing to operational issues rather than one-off tax factors. outlook: To stabilize, the company needs topline recovery and/or structural SG&A reductions, plus tighter inventory control. Given high leverage and low equity, near-term growth will likely be constrained by risk appetite of lenders and working capital availability. Visibility is limited due to data gaps.

Financial Health

liquidity: Cash and equivalents are 5.14. Operating CF is negative (-1.32), partially offset by positive investing CF (2.39), likely disposals. Current assets are 23.86, but current liabilities are unreported, preventing current/quick ratio calculation. The reported 'working capital' figure equals current assets (23.86), which is not a true WC measure; thus liquidity analysis is constrained. solvency: Total liabilities are 21.94 against equity of 2.31 (equity ratio 9.9%). Debt-to-equity is 9.50x, implying high financial risk. Interest-bearing debt amounts are not disclosed, and interest coverage is not calculable, limiting solvency precision. capital_structure: Assets/Equity = 10.12x leverage. Retained earnings are deeply negative (-25.15), offset by capital surplus (9.71), indicating cumulative deficits and thin capital adequacy.

Cash Flow Quality

earnings_quality: OCF/Net income is 0.73x, suggesting weak cash conversion of losses; non-cash charges (D&A 0.47) are modest, and working capital likely consumed cash. Net loss is supported by limited non-cash add-backs, indicating underlying cash burn. FCF_analysis: Free cash flow (as reported) is +1.07, driven by positive investing CF of 2.39 that likely includes asset sales; underlying organic FCF (OCF - capex) is approximately -1.21 (=-1.32 - (-0.11)), highlighting reliance on non-recurring disposals. Capex is very low (-0.11), a sign of constrained investment. working_capital: Inventories of 11.00 are high relative to H1 cost of sales (12.57), implying low turnover and potential markdown risk. Accounts receivable are 4.81 versus revenue of 18.07, which appears reasonable for EC/retail terms, but exact DSO/DIO cannot be computed without period averages.

Dividend Sustainability

payout_ratio_assessment: No dividend data disclosed, and with net loss (-1.81) and negative retained earnings (-25.15), a payout would not be sustainable on earnings. FCF_coverage: Even with positive headline FCF due to asset sales, organic FCF is negative, implying insufficient recurring cash generation to fund distributions. policy_outlook: Given thin equity (9.9% ratio) and ongoing losses, capital preservation is likely prioritized over shareholder distributions until profitability and balance sheet strength improve.

Risk Assessment

Business Risks:

• Demand volatility in fashion/apparel and high sensitivity to trends
• Inventory obsolescence and markdown risk given large inventory balance
• Competitive pressure in e-commerce and omnichannel retail
• Gross margin compression risk if discounting intensifies
• Supply chain and FX exposure for imported merchandise (e.g., CNY/USD costs)
• Customer acquisition cost inflation and digital marketing effectiveness
• Execution risk around cost restructuring and SKU rationalization

Financial Risks:

• High leverage (Debt-to-equity 9.50x) and low equity ratio (9.9%)
• Negative operating cash flow and reliance on asset sales for liquidity
• Potential covenant pressure or refinancing risk (interest-bearing debt details unreported)
• Going-concern risk if losses persist and external funding tightens
• Limited headroom for investment due to capital constraints

Key Concerns:

• Internal data inconsistencies (e.g., gross profit vs. cost of sales; current assets > total assets)
• Sustained operating losses and negative EBITDA
• Elevated inventory levels relative to sales
• Thin capital base with accumulated deficits

Investment Implications

Key Takeaways:

• Topline contracted 18% YoY, pressuring scale-dependent cost structure
• Operating margin -8.1% and EBITDA margin -5.6% point to core profitability headwinds
• ROE -78.3% driven by negative margins and high leverage (10.12x assets/equity)
• Equity ratio 9.9% signals limited loss-absorption capacity
• OCF negative; positive FCF relies on non-recurring investing inflows
• Inventory heavy at 11.00, heightening markdown risk
• Data gaps (debt, current liabilities, non-operating items) and internal inconsistencies constrain precision

Metrics to Watch:

• Revenue trajectory and average selling price vs. discount rate
• Gross margin reconciliation and stability (resolve CoGS/GP inconsistency)
• SG&A run-rate and cost-reduction progress
• Operating cash flow and organic FCF (OCF - capex)
• Inventory turnover and aging/markdown rate
• Equity ratio and external funding access; interest-bearing debt and coverage
• Cash balance runway vs. quarterly cash burn

Relative Positioning: Within Japanese small-cap apparel/e-commerce peers, the company appears weaker on profitability (negative EBITDA/operating income), more leveraged (equity ratio below peer medians), and more reliant on asset disposals for cash, leaving it relatively vulnerable to demand shocks and pricing pressure.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis