| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥138.0B | ¥127.9B | +7.9% |
| Operating Income / Operating Profit | ¥7.5B | ¥7.4B | +1.6% |
| Ordinary Income | ¥9.2B | ¥5.3B | +72.3% |
| Net Income | ¥5.7B | ¥3.6B | +58.2% |
| ROE | 4.6% | 2.9% | - |
2026 FY Q1 results: Revenue ¥138.0B (vs prior year +¥10.1B +7.9%), Operating Income ¥7.5B (vs prior year +¥0.1B +1.6%), Ordinary Income ¥9.2B (vs prior year +¥3.8B +72.3%), Net Income attributable to owners of parent ¥5.2B (vs prior year +¥1.9B +56.3%). Revenue expanded steadily driven by same-store sales growth and new openings in the FoodDelivery business, but at the operating level SG&A increased to ¥70.4B (SG&A ratio 51.0%), compressing operating margin to 5.5% from 5.8% a year earlier (-0.3pt). At the ordinary income level, non-operating income expanded due to foreign exchange gains of ¥2.0B, resulting in a large increase in Ordinary Income. Gross margin remained at a high level of 56.5% (vs 56.6% prior year). While both revenue and profit increased, operating profit growth was limited and the gains in Ordinary Income and Net Income were dependent on non-operating factors such as FX.
[Revenue] Revenue ¥138.0B (+7.9% YoY) was driven by the core FoodDelivery business which posted ¥133.9B (+6.3%). The FoodDelivery business accounted for 97.0% of company-wide revenue and expanded through same-store sales improvement and new store openings. The GoodsSales business (manufacture and sales of frozen takoyaki, etc.) grew to ¥4.6B (+17.9%), contributing to portfolio breadth. The Resort business doubled to ¥0.5B (+106.3%) but remains limited at 0.3% of total. Segment mix: FoodDelivery 97.0%, GoodsSales 3.3%, Resort 0.4%, indicating very high dependence on FoodDelivery. Cost of sales was ¥60.1B (cost ratio 43.5%), keeping gross margin at a high 56.5% (vs 56.6% prior year).
[Profitability] Gross profit ¥77.9B (gross margin 56.5%) less SG&A ¥70.4B (SG&A ratio 51.0%) resulted in Operating Income ¥7.5B (operating margin 5.5%), a slight increase from ¥7.4B prior year. SG&A rose +8.4% from ¥64.9B a year earlier, with higher personnel and store-related expenses weighing on profits. By segment, FoodDelivery operating income was ¥7.5B (margin 5.6%) nearly flat, GoodsSales performed at ¥0.3B (margin 7.2%), while Resort continued a loss of -¥0.4B. Ordinary Income ¥9.2B (+72.3% YoY) rose substantially due to expanded non-operating income ¥2.2B (including foreign exchange gains ¥2.0B). Non-operating expenses were limited to ¥0.6B (interest expense ¥0.5B), down significantly from ¥2.8B prior year. Extraordinary loss included impairment losses of ¥0.3B, resulting in Profit Before Tax ¥8.8B (prior year ¥5.3B), income taxes ¥3.2B, and Net Income ¥5.7B (prior year ¥3.6B). After deducting non-controlling interests ¥0.5B, Net Income attributable to owners of parent was ¥5.2B (+56.3% YoY), achieving revenue and profit growth, though operating-level profit improvement was limited and the rise in Ordinary and Net Income depended on non-operating factors.
FoodDelivery: Revenue ¥133.9B (+6.3%), Operating Income ¥7.5B (-0.1%), margin 5.6%, the core business accounting for nearly all company operating income. Revenue expanded steadily but profit was flat as higher SG&A pressured margins.
GoodsSales: Revenue ¥4.6B (+17.9%), Operating Income ¥0.3B (-0.5%), margin 7.2%. Achieved double-digit growth and maintains higher margins than FoodDelivery, but scale is limited at 3.3% of total.
Resort: Revenue ¥0.5B (+106.3%) doubled, but Operating Loss -¥0.4B (widening loss) with margin -76.1%, leaving profitability issues.
Company-wide profits remain concentrated in FoodDelivery; GoodsSales and Resort contribution to earnings remains limited.
[Profitability] Operating margin 5.5% decreased 0.3pt from 5.8% prior year, with elevated SG&A ratio 51.0% pressuring profits. Gross margin 56.5% maintained at prior-year levels indicating good cost control. Net margin 4.1% improved 1.5pt from 2.6% prior year, but this is due to non-operating factors (FX gains) and not operating efficiency improvement. ROE 4.6% exceeds prior year but remains low in industry comparison, indicating room to improve capital efficiency.
[Cash Quality] Inventory turnover days 207 days (Inventory ¥34.0B ÷ Cost of Sales ¥60.1B × 365) is long, indicating significant working capital tied up. Accounts receivable ¥21.1B with receivable turnover ~56 days is standard. Accounts payable ¥25.5B with payable turnover ~155 days indicates longer payment terms, suggesting working capital management that considers cash flow.
[Investment Efficiency] Total asset turnover 0.39x (Revenue ¥138.0B ÷ Total Assets ¥355.9B) shows low asset efficiency. Tangible fixed assets ¥124.8B (35.1% of total assets) indicates substantial investment in stores and equipment; goodwill ¥14.8B (12.1% of net assets) shows continued M&A investment.
[Financial Soundness] Equity Ratio 34.5% down from 36.4% prior year, but cash on hand ¥66.9B is ample with Current Ratio 121.8% and Quick Ratio 94.3%, indicating good short-term liquidity. Long-term borrowings ¥86.0B with Interest Coverage 14.3x (Operating Income ¥7.5B ÷ Interest Expense ¥0.5B) shows sufficient interest-bearing capacity. D/E ratio 1.90x is somewhat high, but strong cash balances mitigate default risk.
The cash flow statement is not included in this document, so funding trends are analyzed from balance sheet movements. Cash and deposits increased from ¥48.1B prior year to ¥66.9B, +¥18.8B (+39.1%), significantly strengthening liquidity. On the financing side, short-term borrowings increased from ¥15.4B to ¥21.2B (+¥5.8B) and long-term borrowings increased from ¥76.4B to ¥86.0B (+¥9.6B), indicating active debt financing. Inventory rose from ¥33.5B to ¥34.0B (+¥0.5B) and inventory turnover days lengthened to 207 days, posing working capital efficiency challenges. Accounts receivable fell from ¥27.7B to ¥21.1B (-¥6.6B), improving collection cycles. Accounts payable decreased from ¥28.5B to ¥25.5B (-¥3.0B), slightly shortening payment terms. Tangible fixed assets increased from ¥117.5B to ¥124.8B (+¥7.3B), indicating continued investment in stores and equipment. Overall, the company has secured cash through borrowing and operations to fund growth investments and inventory buildup; short-term liquidity risk is low, but improving inventory efficiency is key to enhancing future cash generation.
Earnings quality can be evaluated by separating recurring operating earnings and one-off factors. Recurring earnings are mainly operating income ¥7.5B from FoodDelivery and GoodsSales; the operating margin of 5.5% is slightly down from 5.8% prior year, showing some weakness in operating earnings power. Of non-operating income ¥2.2B, foreign exchange gains ¥2.0B comprise the majority, meaning temporary FX factors significantly boosted Ordinary Income. Non-operating expenses ¥0.6B are mainly interest expense ¥0.5B, keeping financial costs restrained. Extraordinary items included impairment losses ¥0.3B, a one-off charge from declining store profitability. Comprehensive income ¥4.6B was below Net Income ¥5.7B due to Other Comprehensive Income -¥1.1B (Foreign currency translation adjustments -¥0.1B, Valuation difference on available-for-sale securities -¥0.2B, Deferred hedge gains/losses -¥0.8B). Large swings in deferred hedge gains/losses indicate valuation volatility in FX hedging that pressured comprehensive income. Ordinary Income ¥9.2B vs Net Income ¥5.7B yields an after-tax retention rate of 62.0%, with an effective tax rate around 36%, which is standard. After deducting non-controlling interests ¥0.5B, Net Income attributable to owners of parent is ¥5.2B and comprehensive income attributable to owners of parent is ¥4.1B. In terms of earnings quality, operating income is stable but lacks growth, and increases in Ordinary and Net Income rely on uncertain one-off FX gains, raising sustainability concerns.
Full Year / FY guidance: Revenue ¥580.0B (+13.6%), Operating Income ¥25.0B (+40.1%), Ordinary Income ¥23.5B (+14.3%), Net Income ¥8.0B, EPS forecast ¥37.63. Q1 progress toward full year: Revenue 23.8% (vs standard 25% -1.2pt), Operating Income 30.0% (vs standard 25% +5.0pt), Ordinary Income 39.1% (vs standard 25% +14.1pt). Revenue is broadly on track; Operating and Ordinary Income are running ahead. Q1 foreign exchange gains ¥2.0B boosted Ordinary Income, so assessing alignment with the full-year plan requires monitoring operating-level progress. Against the full-year Operating Income plan of ¥25.0B, Q1 Operating Income ¥7.5B is 30.0% progress; considering seasonality this is high, but if Q1 SG&A ratio 51.0% does not improve for the full year, further efficiency measures will be needed in H2. No revisions to the full-year plan have been announced; the company likely expects to achieve targets through H2 same-store sales improvements and new store effects.
Interim dividend forecast: ¥0. Year-end dividend forecast: ¥0. Annual dividend planned ¥0. Payout Ratio 0% as the company prioritizes internal reserves and growth investment for capital allocation. No share buybacks have been disclosed; shareholder returns are deferred for the time being. Retained earnings increased to ¥57.1B (prior year ¥54.6B) +¥2.5B, accumulating internal reserves. With Net Assets ¥114.7B attributable to owners of parent and zero dividend, this is standard for a company in a growth phase, but given ROE 4.6% improvement of business efficiency takes precedence over shareholder returns. In the future, improving operating margins and inventory efficiency to boost cash generation could create room to initiate dividends.
Inventory Efficiency Risk: Inventory ¥34.0B and inventory turnover days 207 days are prolonged, tying up significant working capital. Prolonged inventory stagnation could lead to markdowns, disposal losses, or additional inventory valuation losses. Inventory-to-sales ratio 24.6% exceeds industry norms, making inventory reduction an urgent priority.
Elevated SG&A Risk: SG&A ¥70.4B (SG&A ratio 51.0%) is high, with rising personnel and store-related costs pressuring profits. While gross margin remains high at 56.5%, SG&A growth is suppressing operating margin to 5.5%. If personnel cost containment and store efficiency do not progress, operating leverage will not materialize and margin improvement will be difficult.
FX Volatility Risk: Non-operating income included FX gains ¥2.0B while non-operating expenses included FX losses ¥2.4B simultaneously, indicating high FX volatility. Approximately ¥2B of Ordinary Income was driven by FX; a reversal in FX could significantly reduce ordinary-level profits. Valuation swings in hedging are also large (Deferred hedge gains/losses -¥0.8B), so more precise FX risk management is required.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.5% | – | – |
| Net Margin | 4.1% | – | – |
| Industry median data is limited, making detailed comparison difficult, but Operating Margin 5.5% and Net Margin 4.1% are inferred to be standard levels for the restaurant chain sector. |
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 7.9% | – | – |
| Revenue growth 7.9% is strong for retail/restaurant sectors, but Operating Income growth +1.6% suggests quality of growth issues. |
※Source: Company aggregation
Revenue Growth vs Margin Gap: Revenue +7.9% is expanding steadily, but Operating Margin declined to 5.5% from 5.8% prior year due to persistently high SG&A ratio 51.0% that pressures profits. With gross margin remaining high at 56.5%, attention should focus on curbing SG&A growth and improving same-store efficiencies to enhance operating leverage. Achieving the full-year Operating Income target of ¥25.0B requires H2 cost control.
Progress in Inventory Efficiency: Inventory ¥34.0B and inventory turnover days 207 days highlight significant working capital constraints. Inventory-to-sales ratio 24.6% exceeds industry norms and hinders cash generation. Progress in inventory reduction and improvement in turnover days will be key to future financial health and cash flow improvement.
Dependence on FX and Non-Operating Factors: Ordinary Income +72.3% and Net Income +56.3% are large increases, but Operating Income rose only +1.6%; gains at the ordinary level depended on FX gains ¥2.0B and other non-operating items. High FX volatility creates uncertainty around sustainability of Ordinary Income. Strengthening operating earnings power is a prerequisite for stable profit growth.
This report is an AI-generated financial analysis document created by analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are compiled by the Company from public financial data for reference. Investment decisions should be made at your own responsibility and, if necessary, after consulting a professional advisor.