General Oyster,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥2.15B
• Operating Income: ¥-87M
• Net Income: ¥-31M
• EPS: ¥-14.68

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

General Oyster (32240) delivered FY2026 Q2 consolidated results under JGAAP showing solid top-line momentum but continued bottom-line weakness. Revenue grew 15.1% YoY to ¥2,152 million, indicating healthy demand recovery or successful pricing/mix improvements. Gross profit reached ¥1,178.995 million with a gross margin of 54.8%, evidencing strong unit economics at the product level. However, operating income remained in the red at -¥87 million (flat YoY), implying that higher SG&A and fixed costs absorbed the gross profit expansion. Ordinary income was -¥89 million and net income -¥71 million, with an effective tax rate near zero given the loss position. The DuPont decomposition points to ROE of -4.85% driven by a modestly negative net margin (-3.30%) and moderate asset turnover (0.747x), with financial leverage at 1.97x magnifying losses. Notably, operating cash flow was positive at ¥67.652 million despite the net loss, supported by non-cash items (notably ¥39.987 million of D&A) and likely working capital tailwinds. Liquidity appears strong: current assets of ¥2,173.05 million versus current liabilities of ¥1,113.336 million yield a current ratio of 195.2% and working capital of ¥1,059.714 million. On the balance sheet, total assets are ¥2,881 million and total equity ¥1,463 million, implying an estimated equity ratio around 50.8% based on reported totals (the disclosed 0.0% equity ratio reflects non-disclosure, not an actual zero). Leverage looks moderate with debt-to-equity of 1.32x (using total liabilities as a proxy for debt under JGAAP). EBITDA was -¥47.013 million (margin -2.2%), indicating fixed cost absorption remains a core issue even with a high gross margin. Interest expense is low at ¥2.849 million, and despite negative EBIT the implied interest coverage metric is not immediately threatening given the small interest burden. Dividend distribution remains suspended (DPS ¥0), which aligns with the current loss profile and the priority of restoring profitability. Cash flow data is partially unreported (investing CF and cash balance show as zero placeholders), limiting full FCF analysis. Overall, the company exhibits improving sales traction and adequate liquidity, but must contain SG&A and enhance operating leverage to translate revenue growth into sustainable profits. The near-term focus should be on cost discipline, productivity gains, and maintaining positive operating cash flow while revenue growth persists.

Profitability Analysis

ROE_decomposition: ROE -4.85% = Net margin (-3.30%) × Asset turnover (0.747x) × Financial leverage (1.97x). The negative net margin is the primary driver of weak ROE; asset efficiency is moderate and leverage modestly amplifies the loss. margin_quality: Gross margin is strong at 54.8% (gross profit ¥1,178.995m on revenue ¥2,152m), suggesting favorable unit economics and pricing. However, operating margin is -4.0% (operating loss ¥87m), and EBITDA margin is -2.2%, indicating SG&A and fixed costs more than offset gross profit gains. Ordinary margin (-4.1%) is close to operating margin, implying minimal non-operating relief. operating_leverage: Revenue rose 15.1% YoY but operating loss was flat at -¥87m, indicating limited operating leverage realization in the period. This suggests fixed costs remained high or variable costs outside COGS (e.g., logistics, labor, store operating expenses) scaled with revenue, constraining incremental margins.

Growth Assessment

revenue_sustainability: Top-line growth of 15.1% YoY to ¥2,152m appears robust. Sustainability will depend on continued traffic recovery, pricing, and mix improvements, as well as capacity utilization and store/volume growth dynamics. profit_quality: Despite a high gross margin, profitability is hampered by elevated operating expenses. The flat YoY operating loss indicates that cost initiatives have yet to materially improve flow-through. Ordinary and net losses closely track operating loss, showing limited reliance on one-off non-operating gains. outlook: With positive OCF and strong liquidity, the company has runway to pursue efficiency measures. If revenue momentum persists, incremental cost control could turn EBITDA positive first, followed by operating breakeven. Key catalysts include SG&A optimization, disciplined store operations, and supply chain efficiency to unlock operating leverage.

Financial Health

liquidity: Current assets ¥2,173.05m vs. current liabilities ¥1,113.336m → current ratio 195.2%, quick ratio effectively similar given unreported inventories, and working capital ¥1,059.714m. This indicates ample short-term liquidity headroom. solvency: Total assets ¥2,881m and total equity ¥1,463m imply an estimated equity ratio of ~50.8% (disclosed 0.0% reflects non-disclosure). Debt-to-equity is 1.32x (using total liabilities as proxy), which is moderate. Interest burden is low (interest expense ¥2.849m), reducing near-term solvency pressure even with operating losses. capital_structure: Financial leverage at 1.97x (assets/equity) is moderate. The mix suggests reliance on both equity and liabilities, with capacity to add debt limited by ongoing losses but supported by strong liquidity and equity base.

Cash Flow Quality

earnings_quality: Operating CF ¥67.652m is positive despite net loss of -¥71m, yielding an OCF/NI ratio of -0.95. This reflects non-cash add-backs (D&A ¥39.987m) and likely working capital release. Earnings quality is better than accrual profit suggests, but sustainability depends on maintaining working capital discipline. FCF_analysis: Investing CF and cash balance are unreported (shown as 0 placeholders), preventing a precise FCF calculation for the period. With positive OCF and modest financing CF outflow (-¥7.694m), underlying cash generation from operations appears improving, but capex intensity is unknown. working_capital: Working capital stands at ¥1,059.714m, providing flexibility. Positive OCF implies either receivables collection or inventory/payables management contributed; continued focus on cash conversion is key to support operations until profitability inflects.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0.00 with a payout ratio effectively 0% due to losses, which is appropriate given the negative earnings profile. FCF_coverage: FCF coverage cannot be assessed due to unreported investing CF. With positive OCF and ongoing losses, maintaining a non-dividend stance preserves liquidity. policy_outlook: Resumption of dividends will likely hinge on sustained operating profitability and consistent positive FCF. Near-term priority appears to be reinvestment and balance sheet resilience.

Risk Assessment

Business Risks:

• Margin pressure from elevated SG&A and fixed costs limiting operating leverage
• Demand volatility affecting same-store sales and utilization
• Input cost fluctuations (seafood/raw materials, logistics, labor) impacting gross-to-operating margin conversion
• Execution risk in cost control and operational efficiency initiatives
• Potential sensitivity to seasonality and food safety/regulatory compliance in the food sector

Financial Risks:

• Continued operating losses despite revenue growth
• Dependence on working capital management to sustain positive OCF
• Limited visibility on capex/Investing CF due to non-disclosure, creating uncertainty on future cash needs
• Moderate leverage (1.32x liabilities/equity) that could tighten flexibility if losses persist
• Potential dilution risk if external capital is required before profitability improves

Key Concerns:

• Persistent negative EBITDA and operating losses
• Flat YoY operating loss despite 15%+ revenue growth
• Partial cash flow disclosure (investing CF, cash balance) obscuring true FCF

Investment Implications

Key Takeaways:

• Revenue up 15.1% YoY to ¥2,152m, showing solid top-line momentum
• Gross margin strong at 54.8%, but SG&A pressure keeps EBITDA (-¥47m) and operating income (-¥87m) negative
• ROE -4.85% driven by negative net margin and moderate asset turnover
• Liquidity robust: current ratio 195%, working capital ~¥1,060m
• Operating CF positive at ¥67.7m, indicating better cash conversion than accrual earnings
• Leverage moderate: financial leverage 1.97x; interest expense low (¥2.8m)
• Dividend suspended (DPS ¥0), appropriate under current earnings profile

Metrics to Watch:

• EBITDA margin trajectory and quarterly SG&A as % of sales
• Same-store sales/volume and pricing to validate revenue sustainability
• Operating cash flow and cash conversion cycle components
• Capex/Investing CF once disclosed to assess FCF and reinvestment needs
• Interest coverage and ordinary income trend as losses narrow
• Equity ratio (computed from totals) to monitor balance sheet resilience

Relative Positioning: Within domestic food-service and seafood-related peers, the company exhibits stronger gross margins but weaker operating leverage, with liquidity comparatively solid and leverage moderate; near-term competitiveness hinges on cost discipline to convert revenue growth into positive EBITDA and operating profit.

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
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