| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1506.0B | ¥1533.5B | -1.8% |
| Operating Income / Operating Profit | ¥41.0B | ¥35.1B | +16.8% |
| Ordinary Income | ¥45.7B | ¥39.5B | +15.7% |
| Net Income / Net Profit | ¥25.7B | ¥21.2B | +21.4% |
| ROE | 7.7% | 6.7% | - |
For the fiscal year ending February 2026, Net Sales were ¥1,506.0B (YoY -¥27.4B, -1.8%), a slight decline, while Operating Income was ¥41.0B (YoY +¥5.9B, +16.8%), Ordinary Income was ¥45.7B (YoY +¥6.2B, +15.7%), and Net Income attributable to owners of the parent was ¥25.4B (YoY +¥4.4B, +21.8%), achieving double-digit profit growth. Despite revenue decline, selling, general and administrative expense (SG&A) control and improvements in business mix drove an Operating Margin improvement to 2.7% (from 2.3% prior year), a 0.4pt improvement, and Net Margin to 1.7% (from 1.4%), a 0.3pt increase. Operating Cash Flow was ¥104.3B (YoY +45.5%), a substantial increase, generating cash equal to 4.1x Net Income, and Free Cash Flow was positive at ¥69.0B.
Net Sales were ¥1,506.0B (-1.8%). By segment, the core Home Center Barrow recorded ¥547.2B (-6.0%), Daiyu Eight ¥462.6B (-1.4%), Time ¥152.0B (-4.7%) — these three legacy segments were down — while only Amigo achieved growth at ¥289.0B (+13.4%). Other segments contracted to ¥129.4B (-12.6%). Gross Profit was ¥529.2B, with a gross margin of 35.1% (down -1.0pt from 36.1% prior year). SG&A was ¥533.3B, representing an SG&A ratio of 35.4% (up +1.5pt from 33.9%), yet absolute SG&A control secured Operating Income of ¥41.0B (+16.8%). Major expense items were rent ¥102.2B (6.8% of sales) and advertising ¥16.7B (1.1% of sales), both restrained. Non-operating income was ¥7.3B, mainly fees ¥4.4B; non-operating expenses were ¥2.6B, mainly interest expense ¥2.2B. Ordinary Income of ¥45.7B (+15.7%) grew faster than Operating Income. Extraordinary losses totaled ¥6.2B (impairment losses ¥4.9B, loss on retirement of fixed assets ¥0.9B), while extraordinary gains were ¥0.9B (gain on negative goodwill ¥0.9B), leading to Pre-tax Income of ¥40.5B (+36.1%). Income taxes were ¥14.8B (effective tax rate 36.5%), resulting in Net Income of ¥25.7B (+21.4%). Achieving higher profits on lower sales was primarily driven by SG&A efficiency and improved profitability in some segments.
Home Center Barrow, despite sales of ¥547.2B (-6.0%), achieved Operating Income of ¥20.1B (+3.8%), a margin of 3.7%, making it the most profitable core segment. Daiyu Eight posted sales of ¥462.6B (-1.4%) and Operating Income ¥16.3B (+180.4%), improving margin to 3.5%. Time had sales of ¥152.0B (-4.7%) and Operating Income ¥2.4B (+91.9%), margin 1.6%. Amigo recorded sales of ¥289.0B (+13.4%) but Operating Income fell to ¥3.7B (-64.1%), margin deteriorated to 1.3%. Other segments had sales of ¥129.4B (-12.6%) and Operating Income ¥8.7B (-37.0%), margin 6.7%. Segment margins rank: Other > Home Center Barrow ≒ Daiyu Eight > Time > Amigo. The largest contributor to profit increase was Daiyu Eight (profit +¥9.7B), followed by Home Center Barrow (+¥0.7B) and Time (+¥1.1B). Amigo’s profit decline (-¥6.7B) offset part of the company-wide gains, but improvements in other segments enabled overall profit growth.
Profitability: Operating Margin 2.7% (up +0.4pt from 2.3% prior year), Net Margin 1.7% (up +0.3pt from 1.4%). ROE was 7.7% (prior year 6.9%) under an Equity Ratio of 37.3% (prior year 36.4%), calculated from Total Asset Turnover 1.68x × Financial Leverage 2.68x. EBITDA margin was 5.1% (Operating Income ¥41.0B + Depreciation ¥36.2B = ¥77.2B / Sales), low but stable. Cash quality is high: Operating Cash Flow / Net Income 4.1x, Operating Cash Flow / EBITDA 1.35x, and accrual ratio -8.8%, indicating good earnings quality. Investment efficiency: Total Asset Turnover 1.68x (prior year 1.75x) slightly declined with lower sales; ROIC 8.0% (Operating Income ¥41.0B ÷ (Net Assets ¥333.8B + Interest-bearing Debt ¥179.9B)) indicates limited capital efficiency. Financial soundness: Equity Ratio 37.3%, Current Ratio 116.3%, Quick Ratio 40.5% — reflecting retail sector inventory dependence. Interest-bearing debt ¥179.9B (short-term borrowings ¥43.7B + long-term borrowings ¥136.1B) yields Debt/EBITDA 2.3x, Debt/Equity 0.54x, Interest Coverage 18.5x (EBITDA ¥77.2B ÷ interest paid ¥2.2B), indicating adequate financial resilience. Inventory turnover days 108 days (Inventory ¥27,670M? Note: Inventory ¥276.7B? — calculation shown as Inventory ¥276.7B ÷ COGS ¥931.8B × 365) is high and pressures working capital.
Operating Cash Flow was ¥104.3B (YoY +45.5%), a substantial increase. Pre-tax income ¥40.5B plus depreciation ¥36.2B and impairment losses ¥4.9B were added, with negative goodwill ¥0.9B subtracted. Working capital contributed via accounts payable +¥22.6B cash inflow. Accounts receivable -¥3.1B and inventories -¥0.3B showed minor changes. After tax payments -¥10.9B, Operating Cash Flow reached 4.1x Net Income ¥25.7B, indicating very strong cash generation. Investing Cash Flow was -¥35.3B, led by capital expenditures -¥31.8B (maintenance-focused at 0.88x of depreciation ¥36.2B), loans made -¥3.4B with collections of ¥0.2B. Financing Cash Flow was -¥45.8B: long-term borrowings +¥60.0B raised versus repayments -¥52.1B, net short-term borrowings down -¥30.7B reducing interest-bearing debt. Dividends paid -¥11.5B and lease liability repayments -¥11.5B were executed. Free Cash Flow ¥69.0B (Operating CF ¥104.3B - CapEx ¥31.8B) comfortably covered dividends and debt repayments, increasing cash balance by ¥23.8B to ¥64.2B.
Core recurring earnings center on retail gross profit of ¥529.2B less SG&A ¥533.3B producing Operating Income ¥41.0B. Of non-operating income ¥7.3B, fees ¥4.4B predominate; interest income ¥0.3B and dividend income ¥0.1B are negligible. One-off items totaled -¥5.3B: impairment losses ¥4.9B (deterioration of store profitability) and loss on retirement of fixed assets ¥0.9B comprised extraordinary losses of ¥6.2B, while negative goodwill ¥0.9B (from acquisition of store operations from Encho Co., Ltd.) was recorded as extraordinary gain. Of Net Income ¥25.7B, one-off items impacted about -¥5.3B (≈20.6% of Net Income), indicating limited repeatability into the next fiscal year. Operating Cash Flow ¥104.3B exceeds Net Income ¥25.7B by 4.1x and accrual ratio -8.8% supports strong cash backing. Comprehensive Income ¥27.4B exceeded Net Income ¥25.7B by ¥1.7B, mainly contributed by valuation differences on available-for-sale securities +¥1.4B and actuarial gains/losses adjustment +¥0.3B.
An interim dividend of ¥19 was paid; no year-end dividend was declared. This change reflects acceptance of the tender offer (TOB) by Konan Shoji and the planned delisting. Total dividends for the period were ¥5.7B (interim only), implying a Payout Ratio of 22.2% relative to Net Income ¥25.7B. In the prior year, interim and year-end dividends were each ¥19 for a full-year ¥38 and Payout Ratio 54.8%; thus this period represents a transition in dividend policy. Free Cash Flow coverage of dividends is 12.1x (FCF ¥69.0B / dividends ¥5.7B), indicating ample room. No share buybacks were executed this period, so Total Return Ratio equals the Payout Ratio at 22.2%. Given cash ¥64.2B and Operating CF generation ¥104.3B, dividend sustainability in normal conditions is high, but post-TOB continuation depends on the new controlling shareholder's capital policy.
Industry positioning (reference, company analysis): Compared to the retail sector median for FY2025, the company’s Operating Margin 2.7% is well below the sector median 4.6% (IQR 1.7–8.2%), placing it in the lower range. Net Margin 1.7% is also below the sector median 3.3% (IQR 0.9–5.8%). ROE 7.7% slightly exceeds the sector median 5.9% (IQR 2.6–12.0%), but this is driven by higher financial leverage 2.68x versus sector median 1.88x (IQR 1.55–2.45), highlighting low operating profitability as a challenge. Inventory turnover days 108 are near the upper bound relative to the sector median 65.7 days (IQR 17.4–111.4), indicating inferior inventory efficiency. Conversely, Equity Ratio 37.3% is below the sector median 50.2% (IQR 40.1–63.6%), but Debt/EBITDA 2.3x and Interest Coverage 18.5x indicate financial resilience. Cash conversion rate 1.35x is roughly in line with the sector median 1.57x (IQR -0.03–2.75). CapEx / Depreciation 0.88x is below the sector median 1.16x (IQR 0.75–1.92), indicating maintenance-focused investment rather than growth. Overall, financial quality is around sector average, but operational efficiency and inventory management are in the lower range and need improvement to lift profitability.
Key points from the financial results: 1) Achieved profit growth and margin improvement despite lower sales: Sales -1.8% while Operating Income +16.8% and Operating Margin +0.4pt, reflecting SG&A control and business mix improvement. Daiyu Eight profit +180% and Time profit +92% were main drivers, suggesting progress in structural reforms. 2) Strong cash generation: Operating CF / Net Income 4.1x, FCF ¥69.0B, with working capital optimization via accounts payable +37.5% contributing and short-term borrowings reduced -41.2%, improving the balance sheet. 3) Structural issues in inventory management and profitability: Inventory turnover days 108 (sector median 66) remain elevated and partly explain the -1.0pt decline in gross margin. Amigo’s profit decline -64% dilutes company-wide margins; inventory optimization and correction of segment profitability disparities are keys for the next period. With an ongoing TOB and planned delisting, the company is in a capital policy transition; attention should focus on synergy creation under the new regime and improving efficiency of existing assets.
This report was automatically generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any particular security. Industry benchmarks are reference information aggregated by the Company from public financial statements. Investment decisions are your responsibility; consult a professional if necessary.