| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥287.9B | ¥286.5B | +0.5% |
| Operating Income | ¥22.7B | ¥22.0B | +3.0% |
| Ordinary Income | ¥26.2B | ¥24.5B | +6.8% |
| Net Income | ¥21.3B | ¥16.5B | +28.6% |
| ROE | 1.5% | 1.3% | - |
For the Q1 of the fiscal year ending February 2026, Revenue was ¥287.9B (YoY +¥1.4B +0.5%), Operating Income was ¥22.7B (YoY +¥0.7B +3.0%), Ordinary Income was ¥26.2B (YoY +¥1.7B +6.8%), and Net Income was ¥21.3B (YoY +¥4.7B +28.6%). While Revenue rose only slightly, Operating Income increased and the Operating margin improved by 0.2pt from 7.7% to 7.9%. Ordinary Income grew more than Operating Income due to increased non-operating income, and Net Income achieved a substantial increase driven by ¥5.1B of gains on sales of investment securities. By segment, the People & Future Development Business maintained high profitability with Operating Income of ¥18.6B (margin 27.9%) and remains the company’s earnings pillar, whereas the Apparel & Textile Business fell into an Operating loss of ¥0.5B and the Living & Distribution Business experienced declines in both Revenue and profit.
Revenue increased modestly by +0.5% YoY. By segment, the Industrial Equipment Business remained strong at ¥95.3B (YoY +8.9%), and Other Businesses showed double-digit growth at ¥11.3B (YoY +16.2%). Conversely, the Living & Distribution Business declined sharply to ¥55.6B (YoY -13.5%), People & Future Development Business was slightly down at ¥66.6B (YoY -0.4%), and the Apparel & Textile Business rose modestly to ¥62.4B (YoY +2.6%). The slowdown in consolidated Revenue was mainly driven by the double-digit decline in the Living & Distribution Business.
Cost of sales decreased slightly to ¥208.7B (YoY -¥0.2B), improving the gross margin to 27.5% (prior year 27.0%) by 0.5pt. SG&A expenses rose to ¥56.5B (YoY +¥1.2B +2.1%), outpacing Revenue growth, but an increase in gross profit led to Operating Income of ¥22.7B (YoY +3.0%). Operating margin improved by 0.2pt to 7.9%. By segment, People & Future Development Business delivered Operating Income of ¥18.6B (YoY +17.3%, margin 27.9%) and accounted for 82% of consolidated Operating Income, while the Apparel & Textile Business swung to an Operating loss of ¥0.5B (prior year Operating profit ¥0.9B), and the Living & Distribution Business fell to Operating Income of ¥2.5B (YoY -26.8%, margin 4.5%). Non-operating income increased to ¥4.9B (prior year ¥4.0B), primarily due to dividend income of ¥3.7B (prior year ¥2.9B). Non-operating expenses were flat at ¥1.4B (prior year ¥1.4B), including interest expense ¥0.4B and foreign exchange losses ¥0.1B. Ordinary Income was ¥26.2B (YoY +6.8%). Special gains included ¥5.1B of gains on sales of investment securities, while special losses amounted to ¥0.1B (impairment losses ¥0.1B and business restructuring costs ¥0.1B totaled ¥0.1B). Profit before tax was ¥31.2B (YoY +28.0%); after deducting income taxes of ¥9.9B (effective tax rate 31.8%), Net Income was ¥21.3B (YoY +28.6%). Net margin improved by 1.6pt to 7.4% (prior year 5.8%). In conclusion, modest Revenue growth combined with improved gross margin and gains on investment securities resulted in year-over-year increases in both Revenue and profit.
The Apparel & Textile Business recorded Revenue of ¥62.4B (YoY +2.6%) but swung to an Operating loss of ¥0.5B (prior year Operating profit ¥0.9B, YoY -152.1%), with an Operating margin deteriorating to -0.8%. The Industrial Equipment Business posted Revenue of ¥95.3B (YoY +8.9%) and continued healthy Revenue growth, although Operating Income decreased slightly to ¥5.5B (YoY -1.1%), with margin down 0.6pt to 5.7% (prior year 6.3%). The People & Future Development Business was largely flat at Revenue ¥66.6B (YoY -0.4%) but achieved double-digit Operating Income growth to ¥18.6B (YoY +17.3%), improving margin by 4.2pt to 27.9% (prior year 23.7%). It is the earnings pillar, accounting for 82% of consolidated Operating Income. The Living & Distribution Business posted Revenue ¥55.6B (YoY -13.5%) and Operating Income ¥2.5B (YoY -26.8%) with margin down 0.8pt to 4.5% (prior year 5.3%). Other Businesses recorded Revenue ¥11.3B (YoY +16.2%) and Operating Income ¥0.8B (YoY +5.0%), maintaining a margin of 7.4%. Earnings disparities across segments have widened, increasing dependence on the People & Future Development Business.
Profitability: Operating margin 7.9% (prior 7.7%), Ordinary Income margin 9.1% (prior 8.6%), Net margin 7.4% (prior 5.8%) — improvements at each level. ROE stands at 1.5%, remaining low; this is a point-in-time figure calculated on a period-average basis. Gross margin improved to 27.5% (prior 27.0%) by 0.5pt, while the SG&A ratio rose to 19.6% (prior 19.3%) by 0.3pt.
Cash quality: Cash and deposits were ¥328.4B and short-term investment securities ¥13.0B, giving cash equivalents of ¥341.4B, covering short-term borrowings of ¥155.2B by 2.2x. Trade receivables decreased to ¥260.3B (prior ¥276.4B), and inventories increased to ¥198.8B (prior ¥189.6B).
Investment efficiency: Total assets were ¥1,993.3B (prior ¥1,898.6B), and total asset turnover on an annualized basis is approximately 0.58x, which is low. Investment securities increased to ¥409.9B (prior ¥370.7B), accounting for 20.6% of total assets.
Financial soundness: Equity Ratio is 69.0% (prior 69.4%), remaining high. Interest-bearing debt totals ¥180.9B — short-term borrowings ¥155.2B, long-term borrowings ¥25.7B, and corporate bonds ¥0.2B — yielding a D/E ratio of 0.13x, extremely low. Current ratio is 262.5% and quick ratio is 208.4%, indicating ample liquidity.
Because the cash flow statement data is not disclosed, funding trends are analyzed from balance sheet movements. Cash and deposits increased by ¥37.2B from ¥291.2B to ¥328.4B, improving on-hand liquidity. Short-term investment securities fell by ¥10.0B from ¥23.0B to ¥13.0B. Short-term borrowings increased by ¥39.2B from ¥116.0B to ¥155.2B, indicating expanded short-term financing. Investment securities rose by ¥39.2B from ¥370.7B to ¥409.9B, net increasing despite recognizing some sale gains. Tangible fixed assets increased by ¥10.7B from ¥528.4B to ¥539.1B, indicating continued capital expenditure. Retained earnings rose by ¥2.5B from ¥1,107.7B to ¥1,110.2B, suggesting the bulk of Net Income ¥21.3B was returned via dividends, etc. Net assets increased by ¥54.3B from ¥1,321.5B to ¥1,375.8B, principally driven by an increase in Other Securities Valuation Difference of ¥50.0B from ¥151.4B to ¥201.5B.
Operating Income of ¥22.7B versus Ordinary Income of ¥26.2B indicates Ordinary Income is 15.4% higher due to ¥4.9B of non-operating income. The main component of non-operating income is dividend income of ¥3.7B, representing stable returns from investment securities including strategic holdings. Special gains included ¥5.1B of gains on sales of investment securities, and Profit before tax of ¥31.2B exceeded Ordinary Income by 19.1%. This one-off gain significantly boosted Net Income by 28.6%, but its reproducibility going forward is limited. Total comprehensive income was ¥72.9B, 3.4x Net Income of ¥21.3B, with Other Securities Valuation Difference of ¥50.0B substantially lifting comprehensive income. This reflects unrealized gains from market appreciation of equity holdings, not realized P/L. As an alternative indicator to Operating Cash Flow, core recurring earnings excluding valuation gains should be assessed; Ordinary Income of ¥26.2B less dividend and other non-operating income suggests that core earning power consolidates around the Operating margin of 7.9%.
Full Year guidance is unchanged: Revenue ¥1,300.0B (YoY +8.9%), Operating Income ¥130.0B (YoY +9.1%), Ordinary Income ¥134.0B (YoY +3.3%), Net Income ¥95.0B. Q1 progress rates are: Revenue 22.1% (¥287.9B/¥1,300.0B), Operating Income 17.4% (¥22.7B/¥130.0B), Ordinary Income 19.6% (¥26.2B/¥134.0B), Net Income 22.4% (¥21.3B/¥95.0B). The Operating Income progress of 17.4% is 7.6pt below the quarter-based 25% benchmark and is behind schedule for Q1. Revenue is also 2.9pt below. However, Ordinary Income and Net Income show relatively steady progress due to temporary gains on investment securities. To achieve full-year targets, it is essential to sustain the high profitability of the People & Future Development Business from Q2 onward while returning the Apparel & Textile Business to profitability and restoring the Living & Distribution Business.
Dividend forecast is ¥18.00 per year (interim and year-end ¥9.00 each), an increase of ¥1.00 from prior-year dividend of ¥17.00. There is no revision to the dividend forecast at the end of Q1. With full-year EPS forecast of ¥141.78, the payout ratio is 12.7%, low, indicating ample dividend capacity. Retained earnings ¥1,110.2B and cash and deposits ¥328.4B show substantial internal reserves and no immediate concern over dividend sustainability. There is no disclosure regarding share buybacks; shareholder returns are concentrated on dividends. Issued shares are 74,279 thousand, less treasury stock of 7,276 thousand, yielding a weighted average shares outstanding of 67,003 thousand and a treasury stock ratio of 9.8%.
Industry position (reference — company estimate): industry benchmark data is limited, but over the past five periods as of 2026 Q1, Revenue stands at ¥287.9B, Operating margin 7.9%, and Net margin 7.4%. As a diversified group including wholesale/retail, the People & Future Development Business’s high margin of 27.9% supports group-level profitability, while other segments are relatively low-return. Equity Ratio 69.0% and D/E ratio 0.13x suggest conservative financials relative to the industry. ROE of 1.5% is low and indicates substantial room to improve capital efficiency. A high weighting of investment securities and accumulation of unrealized gains is a notable feature.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmark figures are compiled by our firm based on publicly available financial statements and are provided for reference only. Investment decisions are your responsibility; consult a professional as needed.