WILLPLUS Holdings Corporation FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥20.70B
• Operating Income: ¥408M
• Net Income: ¥305M
• EPS: ¥25.57

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Willplus Holdings (3538) reported FY2026 Q1 consolidated results under JGAAP with steady top-line growth and a sharp improvement in operating earnings. Revenue rose 3.4% year over year to ¥20.705 billion, supported by resilient demand despite a challenging auto retail backdrop. Gross profit reached ¥2.768 billion, implying a gross margin of 13.4%, which appears stable for an import-brand focused dealer model. Operating income increased 69.0% YoY to ¥408 million, lifting the operating margin to roughly 2.0%, indicating better cost discipline and/or an improved sales mix. Ordinary income was ¥390 million and net income was ¥232 million, with a net margin of 1.12%. The YoY decline in net income (-14.8%) contrasts with the strong operating profit expansion, implying non-operating and tax effects weighed on the bottom line in the quarter. Interest expense was modest at ¥20 million, leaving interest coverage strong at approximately 20.4x based on operating income. On the balance sheet, total assets were ¥35.767 billion and equity ¥12.072 billion, implying an equity ratio near 33.7% (calculated), and financial leverage of 2.96x per the DuPont metrics. Liquidity appears sound with a current ratio of 148% and working capital of ¥8.624 billion, providing a buffer for inventory and receivables needs typical of auto retail. The DuPont decomposition indicates a calculated ROE of 1.92% for the period, driven by a 1.12% net margin, 0.579x asset turnover, and 2.96x leverage. Despite good operating momentum, bottom-line compression and limited disclosed detail on non-operating items warrant monitoring. Cash flow statements, depreciation, EBITDA, and inventory balances are unreported (shown as zeros), limiting assessment of earnings quality, capital intensity, and free cash flow conversion for the quarter. Dividend data are also unreported (DPS and payout shown as 0), so dividend capacity cannot be reliably assessed this quarter. Overall, the quarter shows improved operating efficiency and healthy coverage ratios, but incomplete disclosures on cash flows and key working capital components constrain a full quality-of-earnings view. Investors should watch for subsequent disclosures on operating cash flow, inventory levels and turns, and SG&A efficiency to confirm sustainability of the margin gains.

Profitability Analysis

ROE_decomposition: - Net profit margin: 1.12% (NI ¥232m / Revenue ¥20,705m)

• Asset turnover: 0.579x (Revenue ¥20,705m / Assets ¥35,767m)
• Financial leverage: 2.96x (Assets / Equity)
• Calculated ROE: 1.92% for the period. The ROE reflects modest profitability and moderate leverage; if annualized, ROE would likely be higher, but quarterly seasonality must be considered. margin_quality: - Gross margin at 13.4% aligns with an import-brand dealer profile; stability suggests balanced new/used mix and aftersales contribution.
• Operating margin ~2.0% (¥408m / ¥20,705m) improved significantly YoY alongside a 69% operating income increase, indicating SG&A efficiency and/or better per-unit gross.
• Net margin compressed to 1.12% due to non-operating/tax effects (tax expense ¥142m vs NI ¥232m), despite strong operating lift. operating_leverage: Revenue grew 3.4% YoY while operating income rose 69.0% YoY, evidencing positive operating leverage as fixed costs were better absorbed. Continued leverage depends on sustaining gross profit per unit and controlling SG&A amid volume fluctuations.

Growth Assessment

revenue_sustainability: Low-single-digit revenue growth (+3.4% YoY) suggests steady unit volumes and/or pricing within a softer auto market; import brand exposure implies sensitivity to FX and supply conditions. profit_quality: The widening gap between operating income growth (+69%) and net income (-14.8%) highlights reliance on core operations for improvement, offset by weaker non-operating items or higher effective taxes. Without cash flow and depreciation detail, assessing underlying quality (e.g., recurring vs. one-off) is constrained. outlook: If the company maintains current gross margin and SG&A discipline, mid-single-digit revenue growth could translate into outsized operating profit gains. Key swing factors include inventory availability, used car pricing, FX (EUR/USD vs JPY) affecting import costs, and interest rates impacting customer financing and floorplan costs.

Financial Health

liquidity: Current assets ¥26.675bn and current liabilities ¥18.051bn yield a current ratio of 147.8%. Quick ratio is reported at 147.8% due to unreported inventories; true quick ratio is likely lower once inventories are included. solvency: Total equity ¥12.072bn vs total liabilities ¥25.026bn implies a debt-to-equity (total liabilities basis) of 2.07x. Calculated equity ratio is approximately 33.7% (equity/assets), despite the reported 0.0% placeholder. Interest coverage is strong at ~20.4x (operating income/interest expense), indicating low near-term refinancing pressure. capital_structure: Leverage (assets/equity) at 2.96x is moderate for an auto retailer. Mix of interest-bearing debt vs. payables/floorplan facilities is not disclosed here; composition will influence sensitivity to rate moves.

Cash Flow Quality

earnings_quality: Operating cash flow, investing cash flow, and financing cash flow are unreported this quarter (zeros indicate nondisclosure), preventing assessment of cash conversion, working capital intensity, and capex needs. Depreciation and EBITDA are also unreported, limiting visibility into non-cash components of earnings. FCF_analysis: Free cash flow cannot be calculated due to missing OCF and capex information. As a dealer business, FCF can swing with inventory cycles; absent inventory and OCF data, quarter-on-quarter comparability is limited. working_capital: Working capital is reported at ¥8.624bn, supportive of operations. However, inventories are unreported, and thus inventory days and turnover cannot be assessed; these are critical for judging cash conversion and margin risk.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are shown as 0.00, indicating nondisclosure rather than an actual suspension. Without reported dividends and with missing OCF, we cannot compute a reliable payout or coverage ratio. FCF_coverage: Not assessable this quarter due to unreported OCF and capex; FCF coverage is shown as 0.00x solely because of nondisclosure. policy_outlook: Assessment of dividend policy trends is constrained. Typically, sustainable dividends for auto retailers depend on stable operating cash flow through cycles and inventory discipline; confirmation awaits cash flow disclosures in subsequent quarters.

Risk Assessment

Business Risks:

• Import brand concentration risk and dependency on OEM allocations and franchise agreements
• Exposure to FX movements (JPY vs. EUR/USD) affecting vehicle procurement costs and pricing
• Used car price volatility impacting gross margins and stock valuation losses
• Demand cyclicality tied to consumer confidence and interest rates
• Supply chain constraints affecting new vehicle deliveries and mix
• Competition from other dealer groups and online platforms compressing margins
• Regulatory changes (emissions, inspection, financing) impacting costs and demand

Financial Risks:

• Interest rate risk affecting floorplan/working capital financing costs
• Inventory and receivables build potentially straining liquidity during downcycles
• Leverage sensitivity given D/E of ~2.07x on a total liabilities basis
• FX translation and transaction exposure on imported vehicles and parts
• Limited disclosure of cash flows and depreciation complicating assessment of earnings quality

Key Concerns:

• Net income decline (-14.8% YoY) despite strong operating profit growth, implying non-operating and tax headwinds
• Incomplete cash flow and inventory disclosures, limiting visibility on cash conversion and risk in stock valuation
• Sustainability of improved operating margins amid potential normalization of used car pricing and FX volatility

Investment Implications

Key Takeaways:

• Top-line grew 3.4% YoY to ¥20.705bn; operating profit up 69% to ¥408m with ~2.0% operating margin
• Net margin at 1.12% and NI down 14.8% YoY highlight pressure below the operating line
• Strong interest coverage (~20.4x) and moderate leverage (assets/equity 2.96x) underpin solvency
• Liquidity is adequate with a 148% current ratio and ¥8.624bn working capital
• Cash flow, depreciation, EBITDA, and inventory details are unreported, restricting FCF and quality-of-earnings analysis

Metrics to Watch:

• OCF to net income and FCF once disclosed
• Gross profit per unit and blended gross margin trend
• SG&A-to-sales ratio and operating margin sustainability
• Inventory levels, days, and valuation adjustments once reported
• Interest expense trend and effective tax rate normalization
• Revenue mix (new vs. used vs. aftersales) and FX impacts

Relative Positioning: Within Japan’s listed auto retail peers, Willplus’ profile as an import-brand dealer suggests lower volumes but higher ASPs and service attachment, with margins sensitive to FX and OEM supply; the quarter’s improved operating leverage is encouraging, but incomplete cash flow and inventory disclosure keeps its relative quality-of-earnings assessment tentative.

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