| Metric | Current Period | Same Period Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥220.6B | ¥214.4B | +2.9% |
| Operating Income | ¥5.9B | ¥10.2B | -42.2% |
| Ordinary Income | ¥5.6B | ¥9.7B | -41.8% |
| Net Income | ¥2.3B | ¥4.2B | -45.6% |
| ROE | 0.7% | 1.3% | - |
Although the Company secured revenue growth, earnings declined sharply due to an increase in the SG&A ratio and a steep rise in the effective tax rate. Revenue was ¥220.6B (+2.9% year on year), maintaining a growth trend for the third consecutive period, while Operating Income was ¥5.9B (-42.2%), Ordinary Income was ¥5.6B (-41.8%), and Net Income attributable to owners of the parent was ¥2.3B (-45.6%), all representing substantial declines. As the gross profit margin edged down to 72.7% (73.2% in the previous year), the SG&A ratio rose to 70.0% (68.5% in the previous year), causing the operating margin to deteriorate to 2.7% (4.8% in the previous year). In addition, the effective tax rate rose to 64.5% (52.6% in the previous year), further weighing on net income.
【Revenue】Revenue of ¥220.6B represented a year-on-year increase of +2.9%. By segment, Restaurant generated ¥147.2B (+1.5% year on year, 66.7% of total revenue), while Cafe generated ¥72.4B (+4.3% year on year, 32.8% of total revenue). Cafe, which posted the higher growth rate, drove the Company-wide increase.
【Profit and Loss】Operating Income was ¥5.9B (-42.2% year on year), primarily because the SG&A ratio rose to 70.0% (68.5% in the previous year, +1.5pt) while the gross profit margin edged down to 72.7% (73.2% in the previous year, -0.5pt). As a result, the operating margin declined by -2.1pt to 2.7% (4.8% in the previous year). Ordinary Income was ¥5.6B (-41.8% year on year), with the impact of non-operating income and expenses limited. Gain on the sale of property, plant and equipment of ¥1.5B (a temporary factor) exceeded extraordinary losses of ¥0.7B, increasing pretax income by +¥0.8B on a net basis. However, as the effective tax rate rose to 64.5% (52.6% in the previous year), Net Income was limited to ¥2.3B (-45.6% year on year), substantially below pretax income of ¥6.4B (-27.5% year on year). Revenue increased, but earnings declined.
Restaurant posted revenue of ¥147.2B (+1.5% year on year) and segment profit of ¥7.8B (-14.6% year on year), with a 5.3% margin, indicating that profitability declined despite higher revenue. Cafe recorded revenue of ¥72.4B (+4.3% year on year), the highest growth among the two segments, but segment profit declined by -27.5% year on year to ¥5.1B, with a margin of 7.1%; the decline in profit was greater than that of Restaurant. Both segments experienced revenue growth but profit declines, suggesting that rising store operating costs are exerting pressure on profitability. Against combined segment profit of ¥12.9B, Operating Income was ¥5.9B after deducting Company-wide expenses not allocated to the reportable segments (approximately ¥6.1B). The increase in Company-wide expenses was also a factor contributing to the decline in the operating margin.
【Profitability】Both the operating margin, at 2.7% (4.8% in the previous year), and the net profit margin, at 1.0% (1.9% in the previous year), declined. EPS was ¥10.60 (¥19.09 in the previous year, -44.5%). 【Cash Flow Quality】Trade receivables were ¥55.0B, down -14.7% from ¥64.5B in the previous year, indicating reduced collection-related pressure. However, cash and deposits were ¥126.2B, down -15.1% from ¥148.7B in the previous year; the movement in funds is discussed further in the following Cash Flow section. 【Investment Efficiency】ROE was 0.7% (on a quarterly basis), based on a DuPont decomposition of a 1.0% net profit margin × 0.329x total asset turnover × 2.15x financial leverage. As there were no significant changes in turnover or leverage, the decline in profitability was the primary cause of the deterioration in ROE. 【Financial Soundness】The equity ratio improved by +1.8pt to 46.5% from 44.7% in the previous year, while the current ratio remained at a sound level of 163.8% (current assets of ¥190.5B/current liabilities of ¥116.3B). Total assets were ¥670.9B (¥704.5B in the previous year, -4.8%), and net assets were ¥311.7B (¥314.9B in the previous year, -1.0%). Both contracted, but the equity ratio improved.
As the Company does not disclose a cash flow statement, cash movements are analyzed based on changes in the balance sheet. Cash and deposits were ¥126.2B, down -15.1% (-¥22.5B) from ¥148.7B in the same period of the previous year. Long-term borrowings were ¥164.3B, down -5.9% from ¥174.5B in the previous year, suggesting that repayment of borrowings during the period was one factor behind the cash outflow. Income taxes payable were ¥4.1B, a substantial decline of -64.0% from ¥11.4B in the previous year, suggesting that payment of corporate income taxes for the previous fiscal period had placed pressure on cash. While total current assets contracted by -14.5% to ¥190.5B from ¥222.8B in the previous year, accounts payable declined by -11.0% to ¥31.2B from ¥35.1B, indicating that the reduction in trade payables also contributed to the cash outflow. Property, plant and equipment related to capital expenditures increased by +2.7% to ¥183.8B from ¥179.1B in the previous year, suggesting that store-related investment continues. Overall, cash on hand declined as repayment of borrowings, tax payments, and the reduction of trade payables coincided, while the equity ratio improved and the financial foundation remained stable.
After adding gain on the sale of property, plant and equipment of ¥1.5B (extraordinary income) and deducting loss on disposal of property, plant and equipment and other items of ¥0.7B (extraordinary loss) from Ordinary Income of ¥5.6B, pretax income amounted to ¥6.4B. The gain on the sale of property, plant and equipment was a temporary factor, and Ordinary Income (¥5.6B, -41.8% year on year), which more closely reflects recurring earning power, better represents the underlying strength of the business. The largest qualitative concern is the effective tax rate, which rose by +11.9pt to 64.5% from 52.6% in the previous year, causing the decline in Net Income of -45.6% to substantially exceed the -27.5% decline in pretax income. Non-operating income was ¥0.8B, equivalent to only 0.4% of revenue, indicating a low degree of dependence on non-operating income for Ordinary Income. Comprehensive income was ¥2.4B, the same amount attributable to owners of the parent. The small difference from Net Income of ¥2.3B indicates that the impact of other comprehensive income items, such as valuation differences on available-for-sale securities and adjustments related to retirement benefits, was limited.
Progress against the full-year forecast was 23.7% for revenue (¥220.6B/¥930.0B), 11.1% for Operating Income (¥5.9B/¥53.0B), 11.0% for Ordinary Income (¥5.6B/¥51.0B), and 7.8% for Net Income (¥2.3B/¥29.0B), all remaining below the simple 25% progress benchmark. In particular, progress on profit-related indicators was substantially below revenue progress. If the increase in the SG&A ratio and deterioration in the effective tax rate observed in Q1 are not resolved, achieving the full-year plan will require cost controls and profitability improvements in the second half. No revisions were made to the earnings forecast or dividend forecast during the quarter.
The full-year dividend forecast is ¥54.00, implying a payout ratio of approximately 39.9% based on the full-year EPS forecast of ¥135.28. Compared with the previous fiscal year’s annual dividend of ¥26.00, the plan would represent a substantial dividend increase if the forecast is achieved. No disclosure regarding share buybacks has been made, and shareholder returns can therefore only be evaluated on a payout-ratio basis. With quarterly Net Income progress at a low 7.8%, the effective payout ratio could rise if the full-year plan is not achieved, making it important to monitor earnings trends.
Operating leverage reversal: The SG&A ratio rose to 70.0% (68.5% in the previous year, +1.5pt), with fixed and semi-fixed costs increasing at a pace exceeding the +2.9% revenue growth rate. If this condition continues, revenue growth will be less likely to translate into earnings growth.
Increase in the effective tax rate: The effective tax rate for the period was 64.5%, up +11.9pt from 52.6% in the previous year. This caused the decline in Net Income to widen to -45.6%, compared with a -27.5% decline in pretax income. The degree to which the tax burden normalizes will be key to the recovery of net income going forward.
Sensitivity to impairment of goodwill and intangible assets: The Company carries goodwill of ¥147.2B (47.2% of net assets) and total intangible assets of ¥187.6B (28.0% of total assets). In the previous fiscal period, the Company also recorded impairment of property, plant and equipment of ¥0.7B in the Restaurant segment. If store profitability deteriorates, additional impairment charges may be recognized.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 2.7% | 3.3% (0.9%–7.7%) | -0.7pt |
| Net Profit Margin | 1.0% | 2.2% (0.3%–6.1%) | -1.2pt |
Both profitability indicators are below the industry median, and neither the operating margin nor the net profit margin reaches the average level for the retail industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | 2.9% | 7.5% (0.4%–14.5%) | -4.6pt |
The revenue growth rate is below the industry median of 7.5% and is positioned near the lower end of the IQR.
※Source: Compiled by the Company
Although the revenue growth trend continues, the operating margin declined to 2.7% (4.8% in the previous year) due to the increase in the SG&A ratio (+1.5pt), indicating a continuing deterioration in profitability.
The rise in the effective tax rate to 64.5% (52.6% in the previous year) resulted in Net Income impairment of -45.6%, exceeding the decline in pretax income. The trend in the tax burden will therefore be a key focus in interpreting future earnings results.
Progress toward the full-year plan was 23.7% for revenue, while profit-related indicators remained in the 7–11% range. The success or failure of cost controls in the second half will determine whether the full-year plan is achieved.
This is a reference range mechanically calculated solely from publicly disclosed data using a residual income model (Ohlson-type model with an explicit 5-year fade period). It is not a forecast of the market stock price or a recommendation of any specific investment action.
| Scenario | Theoretical Stock Price |
|---|---|
| bear | ¥1,385 |
| base | ¥1,445 |
| bull | ¥1,477 |
| Calculation Assumption | Value |
|---|---|
| Book Value per Share (BPS) | ¥1,454 |
| Adjusted Forecast EPS | ¥139.0 |
| Cost of Equity r | 9.77% (10-year government bond 2.77% + equity risk premium 6.00% + size premium 1.00%) |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 39.9% |
| Forecast EPS Confidence Adjustment | ×1.028 (based on the industry’s historical guidance achievement rate) |
| Implied PBR / PER |
Sensitivity: ¥1,406–¥1,487 at ±1% for the cost of equity, and ¥1,445–¥1,445 at ±0.1 for ω.
Notes:
(Calculation model: Residual income model / Interest rate reference month: 2026-07 / This value is not a forecast or guarantee of the future stock price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting a professional adviser as necessary.
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| 0.99x / 10.4x |
These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.