Saint Marc Holdings Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥43.59B
• Operating Income: ¥2.36B
• Net Income: ¥1.67B
• EPS: ¥48.22

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

For FY2026 Q2, Saint Marc Holdings reported strong top-line momentum with revenue of ¥43.585 billion, up 32.3% YoY, reflecting a robust recovery in dining-out demand and likely contribution from pricing and traffic normalization. Gross profit of ¥25.015 billion supports the provided gross margin of 57.4%, indicating healthy contribution after direct costs. Operating income increased 29.4% YoY to ¥2.363 billion, translating to an operating margin of roughly 5.4%, demonstrating operating leverage but also suggesting higher SG&A intensity amid cost inflation and growth investments. Ordinary income of ¥2.25 billion was slightly below operating income, implying modest net non-operating losses, including interest expense of ¥137 million. Despite better operating results, net income declined 37.3% YoY to ¥1.048 billion, indicating material below-the-line drag—likely extraordinary losses or other non-recurring items under JGAAP and/or increased minority interests, partially offset by a tax benefit (income tax of -¥199 million). DuPont metrics show ROE of 3.46% driven by a 2.40% net margin, asset turnover of 0.636x, and financial leverage of 2.26x; the limiting factor is the slim net margin due to non-operating/extraordinary impacts. EBITDA was ¥3.376 billion, with a 7.7% margin, indicating adequate cash earnings coverage of operating costs and interest. Operating cash flow was solid at ¥2.709 billion, 2.58x net income, signaling strong earnings-to-cash conversion for the period. Liquidity appears adequate with a current ratio of 129% and working capital of ¥4.748 billion. The balance sheet shows total assets of ¥68.491 billion and equity of ¥30.262 billion, implying an equity ratio around the mid-40% range by calculation, even though the disclosed equity ratio field is unreported. Debt-to-equity is shown at 1.34x on the provided metric basis, and EBIT interest coverage is a comfortable 17.2x, suggesting manageable financial risk. Dividends are reported at DPS ¥0 with a 0% payout ratio, consistent with a conservative stance amid earnings volatility and data gaps on free cash flow. The combination of higher revenue, stable operating margin, and strong OCF indicates improving core operations, but the sharp YoY decline in net income highlights sensitivity to non-operating and extraordinary items under JGAAP. With investing cash flows not disclosed, free cash flow can’t be reliably assessed, which constrains capex and dividend capacity analysis. Overall, fundamentals show recovery in operations with adequate liquidity and solvency, but headline profitability and ROE are capped by below-the-line items and data limitations.

Profitability Analysis

ROE is 3.46% per DuPont: net margin 2.40% × asset turnover 0.636 × leverage 2.26. The primary constraint is the thin net margin, despite a solid operating performance. Operating margin stands near 5.4% (¥2.363bn/¥43.585bn), up with revenue but dampened by higher SG&A (labor, utilities, and store expenses likely weighing). Gross margin (per provided figure) is 57.4%, indicating good unit economics after direct costs; the spread between gross and operating margin implies meaningful fixed-cost absorption and room for operating leverage as sales scale. EBITDA margin is 7.7%, indicating modest cash profitability; D&A of ¥1.013bn suggests a capital-intensive store network with a notable depreciation load. Interest coverage is strong at 17.2x EBIT, so financing costs are not the bottleneck. The step-down from operating income to ordinary income (¥2.363bn to ¥2.25bn) is modest, but the sharp fall to net income (¥1.048bn) indicates extraordinary or other below-the-line charges under JGAAP. Effective tax rate appears as 0% due to a tax benefit (reported -¥199m), which softened but did not offset those charges. Overall margin quality is decent at the operating level, with operating leverage potential, but bottom-line quality is pressured by non-operating/extraordinary items.

Growth Assessment

Revenue growth of +32.3% YoY to ¥43.585bn is strong and likely driven by same-store recovery, price/mix improvements, and store additions. Operating income growth of +29.4% confirms that top-line momentum is translating to profit, though cost inflation limited incremental margins. Ordinary income tracked close to operating income, suggesting non-operating impacts were manageable in aggregate before extraordinary items. Net income declined 37.3% YoY to ¥1.048bn, indicating that reported profit growth is not aligned with operating momentum due to below-the-line items (extraordinary losses or adjustments). EBITDA increased to ¥3.376bn, reinforcing that core cash earnings are expanding alongside sales. Sustainability hinges on consumer traffic resilience, input cost trends (food, energy), and labor cost management. With asset turnover at 0.636x, growth is still capital-reliant; more efficient store productivity would support ROA. Absent disclosed investing cash flows, we cannot assess whether growth is capex-heavy or asset-light this period. Outlook depends on maintaining SSS growth and controlling costs; if below-the-line items normalize, net profit growth could catch up to operating trends.

Financial Health

Total assets ¥68.491bn and equity ¥30.262bn imply an equity ratio of roughly 44% by calculation (equity/assets), notwithstanding the unreported equity ratio field. Total liabilities are ¥40.605bn, indicating moderate leverage at the consolidated level. The reported debt-to-equity ratio metric is 1.34x; without a split between interest-bearing and non-interest-bearing liabilities, we view it as an upper-bound proxy. Liquidity is adequate with current assets of ¥21.098bn versus current liabilities of ¥16.350bn, yielding a current ratio of 129% and working capital of ¥4.748bn. Quick ratio equals current ratio due to undisclosed inventories; actual quick liquidity may be lower in practice for a restaurant operator. Interest coverage is healthy at 17.2x EBIT, suggesting low near-term refinancing risk. The negative financing cash flow of -¥511m likely reflects debt repayments and/or lease-related outflows in the absence of dividends. Overall, the balance sheet appears sound with moderate leverage and sufficient liquidity buffers.

Cash Flow Quality

Operating cash flow was ¥2.709bn, 2.58x net income, indicating strong cash conversion and that accruals/working capital movements were favorable this period. EBITDA of ¥3.376bn provides an ample cash earnings base supporting OCF. Investing cash flows are undisclosed (reported as 0), so free cash flow cannot be reliably calculated; the provided FCF figure is therefore not meaningful for assessment. Working capital appears to have been well-managed given positive OCF, but detailed drivers (inventory, receivables, payables) are not disclosed. Non-cash items include depreciation/amortization of ¥1.013bn, consistent with a store-network asset base. The absence of investing CF data constrains visibility on maintenance vs. growth capex and on the sustainability of current OCF after capex. Financing CF of -¥511m suggests deleveraging and/or lease outflows in the period, consistent with prudent capital management.

Dividend Sustainability

DPS is reported at ¥0 with a 0% payout ratio for the period. Given undisclosed investing cash flows, we cannot determine free cash flow available for distribution; the reported FCF coverage metric is not decision-useful. On earnings capacity, net income of ¥1.048bn and strong OCF (¥2.709bn) indicate the potential to fund dividends in principle, but extraordinary items drove headline profit volatility this period. With an implied equity ratio around the mid-40% by calculation and healthy interest coverage, the balance sheet could support a stable policy once profits normalize. Near-term, management appears conservative, prioritizing operational recovery and balance sheet strength over distributions. Future dividend capacity will depend on the normalization of below-the-line items, capex intensity, and sustained OCF resilience.

Risk Assessment

Business Risks:

• Consumer demand sensitivity to macro conditions and real income trends affecting dine-in traffic
• Input cost inflation (food commodities, energy) pressuring margins
• Labor availability and wage inflation impacting SG&A
• Execution risk in store expansion/remodels and format mix
• Competition in cafes/bakeries/casual dining leading to pricing pressure and promotions
• Brand perception and menu innovation cadence affecting same-store sales
• Health/safety incidents or supply chain disruptions

Financial Risks:

• Earnings volatility from extraordinary items under JGAAP impacting net income and ROE
• Limited visibility on capex and investing cash flows, constraining FCF assessment
• Potential lease liabilities and interest-bearing debt exposure despite solid interest coverage
• Working capital swings affecting OCF in seasonally weak periods
• Potential increases in financing costs if interest rates rise

Key Concerns:

• Net income down 37.3% YoY despite operating income up 29.4%, indicating below-the-line drag
• Undisclosed investing cash flows prevent free cash flow and capex adequacy analysis
• Reported equity ratio field is unreported; reliance on derived ratio from assets and equity
• Dependence on continued same-store sales recovery to sustain operating leverage

Investment Implications

Key Takeaways:

• Strong revenue recovery (+32.3% YoY) with operating income up (+29.4%) signals improving core operations
• EBIT margin around 5.4% and EBITDA margin 7.7% show modest but positive operating leverage
• ROE at 3.46% is constrained by a thin 2.40% net margin due to non-operating/extraordinary impacts
• OCF of ¥2.709bn (2.58x NI) indicates solid earnings quality
• Liquidity and solvency are adequate with current ratio 129% and implied equity ratio ~44%
• Data gaps on investing CF limit clarity on FCF, capex intensity, and dividend capacity

Metrics to Watch:

• Same-store sales growth and traffic vs. pricing mix
• Operating margin progression and SG&A efficiency (labor, utilities, occupancy)
• Extraordinary/non-operating items under JGAAP and their normalization path
• Capex and store count changes once investing CF is disclosed
• Input cost trends (coffee, wheat, dairy) and procurement initiatives
• OCF conversion and working capital movements
• Lease liabilities and interest-bearing debt trajectory

Relative Positioning: Within Japan’s cafe/casual dining cohort, the company shows solid post-pandemic revenue recovery and adequate operating margins, with stronger balance sheet resilience than highly leveraged peers but lower ROE than asset-light operators; bottom-line volatility from extraordinary items presently weighs on relative profitability.

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