| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥572.2B | ¥470.6B | +21.6% |
| Operating Income / Operating Profit | ¥94.2B | ¥88.2B | +6.8% |
| Equity-method Investment Income (Loss) | - | - | - |
| Profit Before Tax / Ordinary Income | ¥93.3B | ¥86.1B | +8.4% |
| Net Income / Net Profit | ¥64.8B | ¥58.1B | +11.5% |
| ROE | 12.9% | 12.7% | - |
For the fiscal year ended February 2026 (IFRS consolidated, 1 Mar 2025–28 Feb 2026), Komeda Holdings achieved revenue and profit growth driven by steady domestic same-store performance and expanded consolidation of overseas operations. Revenue was ¥572.2B (YoY +¥101.6B +21.6%), Operating Income was ¥94.2B (YoY +¥6.0B +6.8%), Profit Before Tax was ¥93.3B (YoY +¥7.2B +8.4%), and Net Income attributable to owners of the parent was ¥64.6B (YoY +¥6.5B +11.1%). Domestic operations accounted for 89.8% of revenue. Gross margin declined to 29.4% (from 33.3% in the prior year, -3.9pt) due to higher raw material costs and an overseas mix effect, but an improved SG&A ratio of 13.3% (from 14.9% in the prior year, -1.6pt) preserved an operating margin of 16.5%. Operating Cash Flow was ¥123.5B, 1.91x Net Income, indicating high cash-generating capability; Free Cash Flow was ¥75.8B, sufficient to cover dividends of ¥25.9B. ROE was 13.5%, Equity Ratio 45.2%, and Net Cash ¥17.7B, indicating sound financial health; however, goodwill of ¥397.9B (79.3% of equity) and large lease liabilities of ¥355.6B are primary considerations for capital quality and fixed-cost structure.
Revenue rose substantially by +21.6% YoY, driven by Domestic Business +12.4% (steady same-store sales and contribution from new openings) and a rapid expansion of Overseas Business at +332.4% YoY (structural factor including consolidation of POON). Gross profit was ¥168.5B (gross margin 29.4%), down -3.9pt from 33.3% in the prior year. Rising raw material and energy costs and a greater share of low-margin overseas operations pressured gross margin. SG&A was ¥76.2B (SG&A ratio 13.3%); cost control amid revenue growth improved the ratio by -1.6pt from 14.9%, aided by economies of scale and management efficiency. Operating Income was ¥94.2B (operating margin 16.5%), down -2.2pt from 18.7% the prior year, but SG&A improvement partially offset gross margin deterioration, delivering operating profit growth. Financial income was ¥0.7B and financial expense ¥1.7B, net -¥1.0B (prior year net -¥2.1B), improving net financial results. Profit Before Tax was ¥93.3B (+8.4%). Income taxes were ¥28.5B (effective tax rate 30.5%), similar to the prior year, and Net Income attributable to owners of the parent was ¥64.6B (net margin 11.3%, down -1.1pt from 12.4% prior), achieving final-line profit growth. Comprehensive income was ¥68.4B; the ¥3.9B difference from net income was mainly due to ¥3.6B of foreign currency translation differences, reflecting temporary FX effects. By segment, Domestic Business revenue was ¥513.7B (+12.4%), Operating Income ¥115.1B (margin 22.4%, +4.9%), remaining highly profitable and core; Overseas Business revenue was ¥58.5B (+332.4%), Operating Income ¥1.4B (margin 2.4%, +37.9%), rapidly expanding but low-margin, diluting consolidated margin. In conclusion, the company is on a positive trend of revenue and profit growth, but gross margin deterioration and overseas ramp-up costs are compressing operating margin.
Domestic Business: Revenue ¥513.7B (YoY +12.4%, 89.8% of consolidated), Operating Income ¥115.1B (YoY +4.9%, margin 22.4%), maintaining a high-margin franchise-led model. Same-store strength and net new openings supported revenue growth, and SG&A control sustained high profit margins. Overseas Business: Revenue ¥58.5B (YoY +332.4%, 10.2% of consolidated), Operating Income ¥1.4B (YoY +37.9%, margin 2.4%), where consolidation of POON drove rapid revenue expansion but startup costs and delays in standardizing local operations kept margins low. Adjustments (corporate expenses, etc.) were -¥22.3B, slightly improved from -¥22.6B prior, resulting in consolidated Operating Income of ¥94.2B. The structure is stable domestic earnings base with overseas growth options; in the near term, improving overseas profitability is key to recovering consolidated margins.
Profitability: Operating margin was 16.5%, down -2.2pt from 18.7% prior, yet significantly above the industry median 3.4% (company analysis, FY2025). Net margin was 11.3%, down -1.1pt from 12.4% prior, and well above the industry median 2.3%. ROE was 13.5%, up +0.4pt from 13.1% prior, historically stable in the 12–13% range, indicating strong capital efficiency. ROA was 5.8%, up +0.3pt from 5.5%. Cash quality: Operating Cash Flow / Net Income was 1.91x (prior 1.93x), remaining high and indicating strong cash conversion. Subtotal Operating Cash Flow (before working capital changes) was ¥153.3B, 1.63x Operating Income, indicating robust underlying cash-generating ability including non-cash items. Investment efficiency: Total Asset Turnover was 0.52x (prior 0.45x), improved but well below industry median 1.30x, reflecting an asset-intensive business model. Capex ¥14.1B / Depreciation ¥24.0B = 0.59x, comparable to industry median 0.62x, indicating conservative maintenance-oriented investment. Financial soundness: Equity Ratio was 45.2%, improved +2.1pt from 43.1% prior, comparable to industry median 45.1% and at a healthy level. D/E ratio (interest-bearing debt ¥70.9B / Equity ¥501.5B) = 0.14x, extremely low, with Net Cash ¥17.7B (cash ¥88.6B - interest-bearing debt ¥70.9B) indicating effectively debt-free operations. However, IFRS lease liabilities ¥355.6B (current ¥48.9B + non-current ¥306.6B) represent fixed cash outflow drivers, with annual lease payments of ¥48.8B as a substantive fixed-cost burden. Current ratio was 1.32x (current assets ¥215.8B / current liabilities ¥164.1B), below industry median 1.88x, showing some short-term liquidity tightness. Interest coverage (Operating Cash Flow ¥123.5B / interest paid ¥1.5B) = 82.3x, indicating very strong capacity to service interest on indebtedness. Goodwill was ¥397.9B, 79.3% of equity, high and a principal risk to capital quality; goodwill / Operating Income = 4.2 years, goodwill / approximate EBITDA (Operating Income + Depreciation) ≒ 3.4x, indicating recoverability is quantitatively within an acceptable range.
Operating Cash Flow was ¥123.5B (YoY +10.0%). Adding back non-cash charges such as Depreciation ¥24.0B to Profit Before Tax ¥93.3B, and noting working capital changes—trade receivables +¥3.7B, trade payables +¥1.8B, other financial liabilities +¥27.3B—the net contribution was modestly positive. After tax payments -¥29.0B and interest paid -¥1.5B, the company generated final OCF of ¥123.5B from a subtotal OCF of ¥153.3B. Operating Cash Flow / Net Income of 1.91x indicates high-quality earnings cash conversion. Investing Cash Flow was -¥47.7B, driven by net increase in time deposits -¥30.0B, capital expenditures -¥14.1B, and intangible asset acquisitions -¥3.4B; in the prior year there was net decrease in time deposits +¥40.0B and subsidiary acquisitions -¥18.9B, so the current period indicates a shift into an investment phase. Free Cash Flow (Operating CF + Investing CF) was ¥75.8B, ample and able to cover capex and time deposits while leaving substantial surplus. Financing Cash Flow was -¥95.0B, mainly due to debt repayments -¥20.2B, lease liability repayments -¥48.8B, and dividend payments -¥25.9B. Lease payments of ¥48.8B are a substantive fixed cash outflow linked to store network expansion and growth in right-of-use assets. Cash and cash equivalents decreased from ¥103.9B at the beginning of the period to ¥88.6B at the end, a decline of -¥15.3B; including FX effects +¥1.0B and new consolidations +¥2.9B, the net decrease was -¥18.2B. Cash levels remain above interest-bearing debt ¥70.9B, maintaining net cash, but attention should be paid to further increases in time deposits and working capital volatility.
Operating Income ¥94.2B vs. Profit Before Tax ¥93.3B shows a small gap of -¥0.9B, indicating limited impact from non-operating items (financial income ¥0.7B - financial expense ¥1.7B). The progression from Operating Income to Profit Before Tax is stable, and no material one-off gains or losses are noted. The difference between Comprehensive Income ¥68.4B and Net Income ¥64.6B (¥3.8B) is mainly ¥3.6B of foreign currency translation differences, reflecting valuation changes on overseas subsidiaries when translated into yen and not realized gains/losses. The difference from subtotal OCF ¥153.3B to OCF after working capital adjustments ¥123.5B is about ¥30B, largely due to increases in other financial liabilities (e.g., franchisor-related deposits), which may include temporary elements. From an accrual perspective, Operating CF ¥123.5B significantly exceeds Net Income ¥64.6B, so there is no indication that accounting profits are overly aggressive; rather cash significantly outpaces accounting profit. Depreciation ¥24.0B accounts for about 25% of Operating Income, and includes amortization of IFRS16 lease assets, so non-cash charges relative to Operating Income are substantial, and actual cash generation exceeds Operating Income. Overall, the majority of earnings are recurring franchise fees and company-operated store operations, with minimal non-operating or extraordinary items, supporting a high quality of earnings assessment.
Full-year guidance projects Revenue ¥609.2B (YoY +6.5%), Operating Income ¥102.0B (YoY +8.2%), Net Income ¥69.9B (YoY +8.0%), EPS ¥151.63, and dividend ¥31. Progress against the current period is Revenue 93.9%, Operating Income 92.4%, Net Income 92.4%, indicating generally steady progress. Revenue is expected to grow in the mid-to-high single digits driven by stable domestic same-store growth and full-year contribution from overseas operations. Operating Income assumes stabilization and improvement in gross margin and continued SG&A control to realize operating leverage. Net Income assumes stable tax burden and slight reduction in financial expenses to convert operating profit growth into final profit growth. The dividend of ¥31 is lower than the prior-year ¥60 (interim ¥30 + year-end ¥30), reflecting a shift to a single year-end distribution; the payout ratio is estimated to remain in the mid-20% range, a conservative level. Key assumptions include stabilization of raw material and energy costs, efficiency improvements at overseas stores, and maintenance of high domestic profitability; external risks (FX, raw material prices, consumer trends) could drive upside or downside.
The current fiscal year dividend was ¥60 (interim ¥30 + year-end ¥30), a large increase from prior-year dividend ¥27. With Net Income attributable to owners of the parent ¥64.6B and total dividends ¥25.9B, the payout ratio was 42.3%, historically around 40%, a sustainable level. DOE (dividend on equity) was 5.5%, and combined with ROE 13.5% the balance between capital efficiency and returns is favorable. FCF ¥75.8B vs. dividends ¥25.9B yields an FCF coverage of 2.9x, providing cushion for dividend sustainability from a cash perspective. Share buybacks were ¥0.0B this period (¥10.0B prior), so dividends were the primary form of shareholder return. The full-year forecast dividend ¥31 (assumed as year-end single payment) appears lower than prior-year ¥60, but considering interim dividend timing and year-end treatment, the effective return level is expected to be maintained. Payout ratio 42.3% exceeds industry median 29% (company analysis), indicating an active shareholder return stance. Net Cash ¥17.7B and stable Operating CF provide room to balance growth investment and returns, supporting the potential for maintaining or gradually increasing dividends over the medium to long term.
Industry positioning (reference, company analysis): Compared with the FY2025 benchmark medians of the trading sector (including foodservice within the broader commerce category) to which Komeda HD belongs, Operating margin 16.5% far exceeds the industry median 3.4%, positioning the company as a high-profitability firm. Net margin 11.3% is about 5x the industry median 2.3%. ROE 13.5% is about 2x the industry median 6.8%, showing superior capital efficiency. Conversely, Total Asset Turnover 0.52x is well below the industry median 1.30x, reflecting an asset-intensive structure (large goodwill, lease assets, and trade receivables). Payout ratio 42.3% exceeds industry median 29%, demonstrating an active shareholder return policy. Equity Ratio 45.2% is comparable to industry median 45.1%, indicating standard financial soundness. Current ratio 1.32x is below industry median 1.88x, suggesting relative short-term liquidity weakness. Cash conversion (Operating CF / Net Income) 1.91x exceeds industry median 1.21x, indicating superior cash conversion. Inventory days, with inventory ¥6.0B and annual sales ¥572.2B, imply approximately 3.8 days, extremely short compared with industry median 49 days, indicating minimal inventory risk consistent with a franchise model. Net Debt/EBITDA is -0.15x (net cash), comparable to the industry median -0.17x, and reflects effectively debt-free operations. Overall, high profitability, high ROE, and strong cash generation are competitive advantages, while asset efficiency and short-term liquidity are relative weaknesses.
First, the potential for gross margin rebound: while gross margin declined -3.9pt this period, stabilization in raw material markets and successful price pass-through could see bottoming and improvement next fiscal year, which is key for recovering operating margin. SG&A ratio is already trending improved, so a gross margin reversal could rapidly amplify operating leverage. Second, progress in improving overseas profitability: Overseas revenue grew +332% but margin is only 2.4%, diluting consolidated margin. Absorbing startup costs, standardizing local operations, and improving store productivity could transform overseas into a profit growth driver. Segment margin trends will be a medium-term focus. Third, high goodwill ratio 79.3% makes impairment test assumptions (growth rates, discount rates) and CGU performance critical to capital quality. Although no impairment was recorded this period, if overseas subsidiaries underperform assumptions, impairment risk could materialize. Regular disclosure of impairment testing and monitoring of business-level profit trends is important.
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 specific security. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed before making investment decisions.