| Metric | Current Period | Prior-Year Period | YoY |
|---|---|---|---|
| Revenue | ¥71.0B | ¥73.2B | -3.1% |
| Operating Income | ¥3.4B | ¥3.0B | +12.2% |
| Ordinary Income | ¥6.2B | ¥5.6B | +11.4% |
| Net Income | ¥4.6B | ¥3.9B | +20.8% |
| ROE | 2.1% | 1.9% | - |
In FY2026 Q3, Revenue declined to ¥71.0B (YoY -¥2.2B, -3.1%), while Operating Income increased to ¥3.4B (YoY +¥0.4B, +12.2%), Ordinary Income to ¥6.2B (YoY +¥0.6B, +11.4%), and Net income attributable to owners of the parent to ¥4.6B (YoY +¥0.7B, +20.8%). Despite lower revenue, profits improved, with non-operating income (notably ¥3.0B in dividend income) supporting Ordinary Income. Comprehensive income expanded significantly to ¥20.99B from the prior year, mainly due to increased valuation gains on investment securities. By segment, Real Estate Leasing recorded revenue of ¥4.7B and operating income of ¥2.7B, while Felt recorded revenue of ¥66.3B and operating income of ¥5.6B.
[Profitability] ROE 2.1% (Net profit margin 6.5% × Total asset turnover 0.260 × Financial leverage 1.23x) indicates a low return on equity. The operating margin of 4.8% improved from the prior-year period but remains thin even considering industry characteristics. Of the ¥6.2B in Ordinary Income, approximately ¥2.8B was from non-operating income, with a significant contribution from ¥3.0B in dividend income. [Cash Quality] Cash and deposits were ¥23.2B, down 29.6% YoY, but cash coverage of short-term borrowings of ¥8.0B stands at 2.90x. Current assets of ¥106.0B against current liabilities of ¥24.7B result in a current ratio of 429.8%, a high level. [Investment Efficiency] Investment securities of ¥107.7B (39.4%) represent a high share of total assets of ¥273.3B, and the accumulation of assets not contributing to revenue generation is suppressing total asset turnover. Valuation gains on investment securities amount to ¥55.7B, indicating high dependence on market valuation fluctuations. [Financial Soundness] With an Equity Ratio of 81.0% and interest-bearing debt of ¥8.0B, the debt-to-equity ratio is 0.23x, reflecting a conservative capital structure. Although the ratio of short-term liabilities is high, the liquidity buffer is ample, and short-term funding risk is limited.
Cash and deposits decreased to ¥23.2B, down ¥9.8B YoY, which is estimated to be mainly due to the acquisition of investment securities (up ¥25.3B YoY) and dividend payments. Short-term borrowings of ¥8.0B were flat YoY, with no major change in the funding structure. Working capital was maintained at ¥81.3B, and the levels of accounts receivable at ¥40.0B and inventories at ¥15.7B are consistent with the scale of revenue. The substantial increase in investment securities and the expansion of valuation gains led to an increase of ¥14.7B YoY in net unrealized gains on available-for-sale securities, which was the main driver of comprehensive income of ¥20.99B. The current ratio of 429.8% and the cash and deposits/short-term borrowings ratio of 2.90x indicate sufficient short-term liquidity and ample debt-paying capacity.
With Ordinary Income at ¥6.2B and Operating Income at ¥3.4B, net non-operating gains were approximately ¥2.8B. Non-operating income was mainly composed of ¥3.0B in dividend income, indicating a high reliance on financial income outside the core business. The structure in which non-operating income accounts for approximately 45% of Ordinary Income suggests challenges in the earnings power of the standalone business. Comprehensive income of ¥20.99B significantly exceeded net income of ¥4.6B, and most of the approximately ¥16.4B in other comprehensive income was due to valuation gains on investment securities. Therefore, the expansion of comprehensive income does not reflect a sustained improvement in underlying earnings power but rather depends on market valuation fluctuations, embedding the risk that losses on valuation could cause significant volatility in net assets and comprehensive income. Operating Income accounts for about 73% of Net Income, indicating limited ability to generate stable earnings from operations.
[Position within Industry] (Reference Information; In-house Research) Compared to the Retail industry (2025 Q3 median, n=12 companies), the Company significantly outperforms the industry in financial soundness, while profitability and growth are relatively low within the industry. Profitability: ROE 2.1% is below the industry median of 2.9% (IQR 0.8-7.4%), placing it in the lower tier of the industry. The net profit margin of 6.5% is above the industry median of 2.2% (IQR 0.5-6.3%) and in the upper range, but the operating margin of 4.8% is roughly mid-range at the industry median of 3.9% (IQR 2.0-9.5%), confirming a relatively high net profit margin driven by non-operating income. Soundness: The Equity Ratio of 81.0% far exceeds the industry median of 48.9% (IQR 37.6-62.1%), representing a top-tier conservative capital structure within the industry. The current ratio of 429.8% also far exceeds the industry median of 188% (IQR 133-273%), indicating extremely robust short-term liquidity. Efficiency: While ROA is undisclosed, the low ROE and total asset turnover of 0.260x suggest asset efficiency is inferior to the industry median. Revenue growth of -3.1% is well below the industry median of 6.7% (IQR 0.4-11.7%), ranking among the lowest growth in the industry. (Source: Company’s in-house aggregation based on publicly disclosed financial statements; Comparison universe: 12 Retail companies, 2025 Q3)
This report is an earnings analysis document automatically generated by AI using XBRL financial summary data. It does not constitute a recommendation to invest in any specific security. The industry benchmark is reference information aggregated in-house based on publicly disclosed financial data. Investment decisions are your own responsibility; consult a professional as necessary before making any decisions.