| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue | ¥2787.2B | ¥2682.3B | +3.9% |
| Operating Income | ¥105.8B | ¥86.7B | +21.9% |
| Profit Before Tax | ¥80.9B | ¥53.3B | +51.7% |
| Net Income | ¥27.5B | ¥21.9B | +25.6% |
| ROE | 3.0% | 2.3% | - |
For the fiscal year ended March 2026, Revenue was ¥2787.2B (YoY +¥104.9B +3.9%), Operating Income was ¥105.8B (YoY +¥19.0B +21.9%), Ordinary Income was ¥97.9B (YoY +¥68.4B +232.5%), and Net Income Attributable to Parent Company was ¥23.1B (YoY +¥4.4B +23.3%). The company achieved revenue and profit growth, with margin improvement at the operating stage driven by store efficiency and cost optimization. Ordinary Income rose significantly due to compression of financial expenses (¥31.9B, YoY -¥6.3B) and an increase in other operating income (¥29.4B, YoY +¥14.2B). However, recognition of impairment losses of ¥114.1B (prior year ¥80.7B) and a high effective tax rate of 66.0% limited growth at the Net Income level. Operating margin improved to 3.8% from 3.2% a year earlier (+0.6pt). By segment, core Marugame Seimen maintained a high margin of 16.0% (prior year 16.3%), Overseas Business markedly improved to 5.2% (prior year 2.4%), while Domestic Other declined to 10.5% (prior year 12.6%).
Revenue of ¥2787.2B (YoY +3.9%) was driven by robust growth in domestic operations. By segment, Marugame Seimen recorded ¥1371.9B (+7.1%) as the strong core business, and Domestic Other grew to ¥396.3B (+11.9%). Meanwhile, Overseas Business declined to ¥1019.0B (-2.7%), impacted by store restructuring in the UK (Revenue ¥245.7B → ¥202.8B, -17.4%). By geography, Domestic (Marugame + Domestic Other) grew to ¥1774.9B (+8.0%), Overseas: Hong Kong ¥533.6B (-1.2%), UK ¥202.8B (-17.4%), Other ¥275.8B (+8.2%), with UK restructuring dragging on overall results. Gross profit was ¥2106.2B (gross margin 75.6%, prior year 76.0%), a 0.4pt decline in gross margin, while SG&A ratio improved to 67.9% (prior year 69.2%, -1.3pt), reflecting better fixed cost absorption.
Profit: Operating Income of ¥105.8B (+21.9%) was achieved through SG&A containment and store efficiency. Impairment losses increased by ¥33.4B YoY to ¥114.1B, consisting of ¥106.5B in Overseas (asset write-downs in the UK), ¥4.0B in Domestic Other, and ¥3.6B in Marugame, reflecting significant one-off burdens from Overseas restructuring. Ordinary Income of ¥97.9B (+232.5%) benefited from improved financial results due to lower financial expenses (¥31.9B, prior year ¥38.1B) and only a slight decline in financial income (¥17.8B, prior year ¥18.5B), and other operating income/expense net turning positive to +¥5.3B (prior year -¥14.7B). From Profit Before Tax of ¥80.9B (+51.7%), corporate taxes and others of ¥53.4B were deducted, leaving a high effective tax rate of 66.0% (prior year 59.0%). Equity-method losses were a loss of -¥10.8B (prior year -¥13.8B); despite improvement, the high tax rate and equity-method losses pressured Net Income margin to 1.0% (prior year 0.8%), resulting in limited Net Income growth compared with operating-stage gains.
Marugame Seimen recorded Revenue of ¥1371.9B (+7.1%), Operating Income of ¥219.6B (+5.1%), and a margin of 16.0% (prior year 16.3%), achieving stable growth as the core business. Impairment losses were ¥3.6B (prior year ¥6.4B), modest, aided by efficient operation of existing stores and price/mix optimization. Domestic Other posted Revenue of ¥396.3B (+11.9%)—double-digit growth—but Operating Income decreased to ¥41.5B (-6.6%), with margin down to 10.5% (prior year 12.6%). In addition to impairment losses of ¥4.0B (prior year ¥3.0B), launch costs for new formats and variability in profitability among existing brands were observed. Overseas Business recorded Revenue of ¥1019.0B (-2.7%) but Operating Income of ¥52.9B (+109.4%), with margin doubling to 5.2% (prior year 2.4%). Although impairment losses of ¥106.5B (prior year ¥71.2B) were recognized due to UK store rationalization, restructuring directly improved profitability. Hong Kong Revenue was ¥533.6B (-1.2%), UK Revenue ¥202.8B (-17.4%), and Other regions Revenue ¥275.8B (+8.2%). Segment adjustments were -¥99.3B (prior year -¥96.6B), reflecting increased headquarters overhead.
Profitability: Operating margin improved to 3.8% (prior year 3.2%, +0.6pt). EBIT margin was 2.0% (EBIT ¥54.8B), improving from negative last year though remaining low. ROE was 2.6% (prior year 2.2%, +0.4pt), held down primarily by low Net Income margin of 1.0% (prior year 0.8%). ROA (ordinary income basis) was 0.9%, similar to prior year, aided by improvement in total asset turnover to 0.90x (prior year 0.83x). Gross profit margin was 75.6% (prior year 76.0%), with SG&A ratio improving to 67.9% (prior year 69.2%), driving operating efficiency. The effective tax rate remained high at 66.0% (prior year 59.0%), and the tax burden coefficient 0.286 (adjusted from 1-0.66≈0.34) substantially depresses Net Income margin.
Cash quality: Operating Cash Flow (OCF) was ¥492.4B, up +30.7% YoY, and OCF/Net Income was 21.3x, driven mainly by non-cash charges of Depreciation ¥308.3B and Impairment ¥114.1B. The accrual ratio (OCF/Operating Income) was an extremely high 4.65x; excluding impairment impact, it is about 3.5x, indicating good cash-generation quality. Working capital movements were modest: trade receivables -¥9.2B, inventories -¥1.5B, trade payables +¥7.6B, showing no signs of manipulation.
Investment efficiency: ROIC was 4.2% (calculation: EBIT ¥54.8B ÷ invested capital ~¥1,300B), below the cost of capital. Fixed assets are significant: tangible fixed assets ¥511.6B, right-of-use assets ¥935.8B, intangible assets & goodwill ¥572.9B, indicating room to improve capital efficiency. Capital expenditures were ¥138.0B, with a capex/depreciation ratio of 0.45x, reflecting restrained investment focused on maintenance and renewal of existing stores.
Financial soundness: Equity Ratio was 29.9% (prior year 27.0%, +2.9pt) but remains low. Interest-bearing debt (short-term borrowings ¥45.6B, long-term borrowings ¥294.1B, bonds ¥249.4B) totaled ¥589.1B, with Debt/EBITDA approx. 1.4x and Debt/Equity 0.64x—standard metrics. However, including lease liabilities (current ¥219.8B, non-current ¥771.2B) of ¥991.0B, effective D/E is 2.35x, indicating high leverage. Interest coverage is low at Operating Income ¥105.8B ÷ financial expenses ¥31.9B = 3.3x, posing a risk of continued pressure from interest costs. Current ratio was 1.14x (current assets ¥864.5B ÷ current liabilities ¥761.4B), so short-term liquidity is secured, and cash of ¥698.9B plus robust OCF supports debt service over the next year.
OCF was ¥492.4B (prior year ¥376.7B, +30.7%), demonstrating strong cash generation. Profit Before Tax ¥80.9B plus Depreciation ¥308.3B and Impairment ¥114.1B in non-cash charges contributed, with working capital movements yielding a subtotal of ¥547.1B before deduction of interest/dividend/tax payments. Working capital changes were trade receivables -¥9.2B, inventories -¥1.5B, trade payables +¥7.6B, other +¥14.7B, totaling a positive contribution of +¥11.7B, with no signs of cash manipulation. Investing Cash Flow was -¥156.6B (prior year -¥127.9B): CapEx ¥138.0B (prior year ¥138.3B) representing 45% of depreciation, restrained, intangible asset acquisitions ¥0.3B, net deposits/guarantee payments ¥3.7B, other -¥17.4B. Free Cash Flow was ¥335.8B (prior year ¥248.8B, +35.0%), ample and far exceeding dividends of ¥8.8B. Financing Cash Flow was -¥481.3B (prior year -¥132.2B), a large outflow: bonds issued +¥29.9B, bond redemptions -¥8.0B, net short-term borrowings -¥74.9B, long-term borrowings raised +¥130.0B, long-term borrowings repaid -¥216.7B, lease repayments -¥223.4B, dividends -¥8.8B, acquisition of non-controlling interests -¥108.1B, other +¥4.5B. The sharp reduction in short-term borrowings (¥120.0B → ¥45.6B) and acquisition of non-controlling interests -¥108.1B were the main drivers of the deterioration in financing cash flow. Through acquisitions within the consolidated scope, non-controlling interests fell sharply from ¥92.9B to -¥0.6B, increasing the parent company ownership ratio. Cash at end of period was ¥698.9B (opening ¥822.7B, -¥123.8B), including foreign exchange translation +¥21.7B.
Earnings quality is high in the operating stage, but impairment losses of ¥114.1B were recorded as temporary burdens. The main cause of impairment was asset compression of ¥106.5B related to Overseas Business (particularly the UK) store restructuring, positioned as part of structural reforms. Non-operating income totaled ¥47.2B, comprising financial income ¥17.8B (dividends/interest) and other operating income ¥29.4B, up ¥8.5B YoY, and accounting for 44.6% of Operating Income—a high proportion. Financial expenses of ¥31.9B (including interest paid ¥28.2B) improved from ¥38.1B prior year, aided by reduction in short-term borrowings. Equity-method loss of -¥10.8B (prior year -¥13.8B) showed signs of improvement, indicating progress in affiliate restructuring. Comprehensive income was ¥76.1B (Net Income ¥27.5B, Other Comprehensive Income ¥48.6B), with foreign currency translation adjustments from overseas operations of +¥48.7B significantly boosting equity. From an accrual perspective, OCF ¥492.4B vs. Net Income ¥27.5B yields a ratio of 17.9x—extremely high—driven by non-cash impairment and depreciation; earnings quality thus depends heavily on non-cash elements. Accounting manipulation risk is low, and the conservativeness of revenue recognition is supported by small working capital movements and strong cash generation.
Full-year guidance is Revenue ¥2870.0B (YoY +3.0%), Operating Income ¥170.0B (+60.7%), Net Income Attributable to Parent Company ¥71.0B (+202.9%), and EPS ¥75.10. Progress against full-year plan based on first-half results is: Revenue 97.1%, Operating Income 62.2%, Net Income Attributable to Parent Company 32.5%, indicating plans assume substantial profit improvement in the second half. Drivers of Operating Income improvement include the end of impairment cycle (reversal of ¥114.1B) and stabilization of Overseas Business profitability. The large projected Net Income increase (+202.9%) assumes normalization of tax burden (decline in effective tax rate) and continued Ordinary Income improvement; however, it is uncertain whether the first-half effective tax rate of 66.0% will materially improve in the second half. Dividend guidance remains at ¥0 interim, and attention is required regarding consistency with the actual year-end dividend payment of ¥11. There is no mention of earnings forecast revisions; foreign exchange, raw material trends, and the pace of Overseas store improvements in the second half are key to achieving guidance.
Year-end dividend was ¥11 per share (interim dividend ¥0), totaling ¥8.8B. Dividend payout ratio to Net Income Attributable to Parent Company of ¥23.1B is 38.1% (calculation: ¥8.8B ÷ ¥23.1B); the company-disclosed 59.0% is presumed to be based on adjusted profit. Prior year year-end dividend was ¥0 with total dividends ¥7.9B (including preferred dividends), so ordinary share dividends effectively resumed and increased. Dividends as a percentage of Free Cash Flow of ¥335.8B was 2.6%, with FCF coverage 38.2x—very high—supporting dividend sustainability. There is no disclosure of share buybacks; shareholder returns are dividend-centric. Distributions to other capital instruments (¥138.5B) amounted to ¥5.8B, bringing total returns to ¥14.6B and Total Return Ratio to 63.2% (vs. Net Income Attributable to Parent Company). While there is no explicit dividend policy commitment, abundant FCF and low payout ratio suggest room for dividend increases, although ROE/ROIC improvements and growth investment needs will determine future return levels.
Overseas restructuring risk: The Overseas segment recognized impairment of ¥106.5B and UK Revenue fell 17.4% amid ongoing store restructuring. Hong Kong also saw a slight Revenue decline (-1.2%), raising concerns about demand volatility and intensified competition. Non-current assets by region showed the UK at ¥216.7B (prior year ¥313.4B, -30.9%), indicating substantial asset compression, but additional impairment risk and delays in execution of restructuring could affect achievement of profit plans.
High tax burden and weak Net Income margin: Effective tax rate at 66.0% (prior year 59.0%) remains high and the tax burden coefficient 0.34 is compressing Net Income margin of 1.0%. Continued equity-method losses of -¥10.8B further suppress profits; absent improvement in affiliate earnings and tax structure optimization, low ROE of 2.6% will persist and limit shareholder value creation.
High leverage driven by lease liabilities: Including lease liabilities of ¥991.0B (current ¥219.8B, non-current ¥771.2B), effective D/E is 2.35x—high leverage—and interest coverage of 3.3x is low. In a rising interest rate environment, financial expenses of ¥31.9B could increase further, and lease contract renewals could bake in higher rents, raising fixed cost burdens. Large right-of-use assets of ¥935.8B reflect an extensive store network, but if foot traffic at existing stores weakens, fixed-cost leverage could reverse and impairment risk would rise.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| ROE | 2.6% | 5.9% (2.6%–12.0%) | -3.3pt |
| Operating Margin | 3.8% | 4.6% (1.7%–8.2%) | -0.8pt |
| Net Margin | 1.0% | 3.3% (0.9%–5.8%) | -2.4pt |
Both ROE and Operating Margin are below industry medians, and Net Margin at 1.0% is substantially behind the median of 3.3%. High tax rates and financial expense burdens are key bottlenecks.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 3.9% | 4.3% (2.2%–13.0%) | -0.4pt |
Revenue growth is roughly in line with the industry median, with domestic growth offsetting Overseas declines.
※ Source: Company aggregation
Strength of operating cash generation and improvement in Overseas profitability: OCF ¥492.4B (+30.7%) and FCF ¥335.8B provide abundant funds supporting dividend sustainability (FCF coverage 38.2x) and financial flexibility. Overseas Business, despite Revenue decline (-2.7%), doubled margin to 5.2% (prior year 2.4%); if UK restructuring leads to durable profit improvement, the probability of meeting next year’s Operating Income target (+60.7%) increases. If the impairment cycle of ¥114.1B lapses and tax rate normalizes, substantial Net Income improvement (company plan +202.9%) could be realized.
Room to improve ROE/ROIC and capital efficiency challenges: With ROE 2.6% and ROIC 4.2%, capital efficiency lags industry medians, mainly due to low Net Margin of 1.0% (industry median 3.3%). Normalization of the effective tax rate (target in the 30% range), reduction in financial expenses of ¥31.9B (short-term borrowing reduction progressed), and improvement in equity-method results could raise Net Margin into the 3% range and ROE to around 5–7%. A conservative capex posture (CapEx/Depreciation 0.45x) appears aimed at prioritizing financial health, and acceleration of growth investment (new store openings, format development) is expected once existing store efficiency and Overseas profitability are firmly established.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the firm from publicly disclosed financial statements. Investment decisions are your responsibility; please consult a professional advisor as necessary.