| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1670.8B | ¥1566.1B | +6.7% |
| Operating Income / Operating Profit | ¥43.2B | ¥16.4B | +164.4% |
| Ordinary Income | ¥54.4B | ¥20.8B | +162.0% |
| Net Income / Net Profit | ¥7.0B | ¥152.1B | -46.7% |
| ROE | 0.7% | 14.1% | - |
For the fiscal year ended February 2026, Revenue was ¥1,670.8B (YoY +¥104.8B +6.7%), Operating Income was ¥43.2B (YoY +¥26.9B +164.4%), Ordinary Income was ¥54.4B (YoY +¥33.6B +162.0%), and Net Income attributable to owners of parent was ¥37.9B (YoY -¥114.3B -75.1%). At the operating level, a gross margin of 54.7% (approximately 53.6% in the prior year, +110bp) and a SG&A ratio of 52.1% (-42bp) drove a substantial improvement in operating margin to 2.6% (from 1.0% in the prior year, +160bp). Conversely, the prior year included extraordinary gains of ¥253.5B (including ¥239.0B gain on sale of major fixed assets) that boosted Net Income, whereas this fiscal year recorded special gains of ¥34.7B (mainly ¥33.6B gain on sale of investment securities) and special losses of ¥27.9B (including impairment losses of ¥18.8B and business restructuring costs of ¥10.0B), leading to a decline in Net Income from the prior-year one-off high. Apparel-related businesses accounted for 97.0% of Revenue and approximately 96% of Operating Income, driving the revenue and profit increases. Although this is a revenue- and profit-increasing result, Operating Cash Flow was negative ¥-77.2B (deterioration of -135.0% from prior year ¥+57.2B) and Free Cash Flow was ¥-350.7B, leaving challenges in cash generation.
【Revenue】Apparel-related businesses increased to ¥1,622.1B (YoY +7.6%), accounting for 97.0% of total Revenue. Other businesses decreased to ¥56.0B (YoY -16.1%) but had limited impact, resulting in a group-wide Revenue increase of +6.7%. Gross margin improved to 54.7% (+110bp YoY) as product mix optimization and restraint on markdowns were effective. 【Profitability】SG&A increased to ¥871.3B but the SG&A ratio improved to 52.1% (-42bp), containing cost increases relative to Revenue growth and resulting in a large increase in Operating Income to ¥43.2B (YoY +164.4%). Non-operating income of ¥20.4B (dividend income ¥8.4B, foreign exchange gains ¥2.2B, etc.) lifted Ordinary Income to ¥54.4B (+162.0%). Special gains totaled ¥34.7B, mainly from gain on sale of investment securities ¥33.6B, while special losses totaled ¥27.9B including impairment losses ¥18.8B and business structure improvement costs ¥10.0B, netting a positive contribution of ¥6.8B. Profit before income taxes was ¥61.2B; after deducting income taxes of ¥26.4B (effective tax rate 43.2%), Net Income was ¥7.0B and Net Income attributable to owners of parent was ¥37.9B. The prior year’s Net Income was inflated to ¥152.1B by special gains of ¥253.5B including a large gain on sale of fixed assets ¥239.1B, so after the removal of one-off factors this fiscal year shows lower Net Income, though operating performance clearly improved. In conclusion, this was a revenue- and profit-increasing result driven by gross margin improvement and SG&A control.
The Apparel-related business recorded Revenue of ¥1,622.1B (YoY +7.6%), Operating Income of ¥69.5B (YoY +54.1%), and an operating margin of 4.3% (from 4.5% in the prior year, -0.2pt), achieving both revenue and profit growth. Its share of Revenue was 97.0% and it accounts for the majority of profits as the core business. Other businesses had Revenue of ¥56.0B (-16.1%), Operating Income of ¥2.8B (-30.3%), and a margin of 5.1%, resulting in revenue and profit declines but only minor impact on the group. Consolidated Operating Income including adjustments was ¥43.2B, with corporate-level adjustments of ¥-29.1B deducted from segment profit total of ¥72.3B. The Apparel-related operating margin substantially exceeded the consolidated operating margin of 2.6%, functioning as the pillar of earnings.
【Profitability】Operating margin was 2.6% (from 1.0% in the prior year, +160bp), Net income margin was 2.3% (from 9.7% in the prior year, -7.4pt; prior year included one-off large gains), ROE was 3.8% (prior year 14.9%), and ROA was 2.2% (prior year 10.8%). While operating-level improvement progressed, net-income measures declined from the prior-year one-off high. Gross margin was 54.7% (approximately 53.6% in the prior year, +110bp), reflecting product strength and restraint on markdowns; SG&A ratio was 52.1% (-42bp), indicating successful cost efficiency. Goodwill amortization was ¥15.0B, representing 18.3% of EBITDA ¥82.1B and is a JGAAP-specific profit compression factor. 【Cash Quality】Operating Cash Flow was ¥-77.2B, Operating CF/Net Income was -2.03x, and Free Cash Flow was ¥-350.7B, indicating substantially negative cash generation; main drivers were tax payments ¥118.1B and acquisition of subsidiary shares ¥290.8B. Inventory turnover days were 143 days (COGS basis), receivables turnover days 30 days, payables turnover days 51 days, and CCC 128 days, showing low working capital efficiency with substantial room for improvement. 【Investment Efficiency】Total asset turnover was 0.96x, ROA 2.2%, and ROIC 2.2%, indicating low capital efficiency; goodwill ¥322.4B and intangible assets ¥399.7B account for 41.5% of total assets, suppressing asset turnover. Capex was ¥24.7B / Depreciation ¥38.8B = 0.64x, indicating maintenance-level investment, but intangible asset investments including M&A are the main focus and future integration effects are key. 【Financial Soundness】Equity Ratio was 57.0% (from 76.4% prior year, -19.4pt), current ratio 226.4%, and quick ratio 142.0%, indicating good liquidity. Interest-bearing debt was ¥392.6B (long-term borrowings ¥316.2B, short-term borrowings ¥76.4B, etc.), rising sharply YoY due to M&A and share buybacks; Net Debt/EBITDA was 1.3x and Debt/EBITDA 4.78x, showing increased leverage. Interest coverage was 16.8x, indicating adequate interest-paying capacity, but the YoY increase in leverage suggests reduced resilience to future profit volatility.
Operating Cash Flow was ¥-77.2B, a significant negative versus Net Income ¥7.0B (Net Income attributable to owners of parent ¥37.9B), and Operating CF/Net Income was -2.03x, indicating weak cash-generating power. The main cause was income tax payments of ¥118.1B, reflecting taxation on prior-year large gains; operating CF subtotal (pre-working capital changes) was ¥39.4B, from which working capital changes such as increase in trade receivables -¥8.9B, increase in inventories -¥2.0B, and decrease in trade payables -¥12.9B were deducted. Depreciation ¥38.8B and goodwill amortization ¥15.0B and other non-cash expenses produced EBITDA of ¥82.1B; Operating CF to EBITDA ratio was -0.94x, with tax payments and working capital tie-up expanding cash outflows. Investing CF was ¥-273.5B, primarily due to acquisition of subsidiary shares -¥290.8B, acquisition of tangible fixed assets -¥24.7B, acquisition of intangible fixed assets -¥24.4B, and acquisition of investment securities -¥56.0B, partially offset by proceeds such as sale of investment securities ¥116.6B. Free Cash Flow was ¥-350.7B, significantly negative, with M&A-driven investments absorbing cash. Financing CF was ¥+169.9B; long-term borrowings raised ¥360.0B covered dividend payments -¥45.6B, treasury stock acquisition -¥128.7B, and long-term borrowings repayments -¥92.4B, resulting in cash and deposits of ¥284.8B (from ¥463.3B prior year, -¥178.5B). High inventory turnover days 143 and CCC 128 are the main causes of cash tie-up; working capital compression is key to restoring cash generation.
Recurring earnings center on Operating Income of ¥43.2B, calculated as gross profit ¥914.6B less SG&A ¥871.3B, with Ordinary Income of ¥54.4B reflecting addition of non-operating income ¥20.4B (dividend income ¥8.4B, foreign exchange gains ¥2.2B, etc.) and indicating underlying earning power. Non-operating income is equivalent to approximately 47% of Operating Income and therefore the company is relatively dependent on dividends, FX, and other external factors. Net special items were +¥6.8B, with gain on sale of investment securities ¥33.6B (prior year ¥12.5B) increasing materially, offset by impairment losses ¥18.8B (prior year ¥13.6B) and business restructuring costs ¥10.0B (same as prior year) recorded as one-off losses. The prior year included a large gain on sale of fixed assets ¥239.1B which comprised the majority of special gains ¥253.5B and boosted Net Income; thus current fiscal-year Net Income reflects the post-removal level of that one-off. Operating CF ¥-77.2B is far below Net Income ¥7.0B, with Operating CF/Net Income -2.03x and accrual ratio 6.6%, indicating low conversion of profit into cash. Comprehensive income was ¥84.0B (owners of parent ¥87.2B); despite Net Income ¥7.0B, OCI of ¥49.2B (including ¥50.1B valuation difference on securities) contributed positively, so unrealized gains help support part of shareholder value. The gap between Ordinary Income ¥54.4B and Net Income ¥7.0B is due to high tax burden (effective tax rate 43.2%) and equity-method losses and other items; despite operating improvement, net-profit margins remained low.
Full Year / FY guidance forecasts Revenue ¥2,000.0B (YoY +19.7%), Operating Income ¥75.0B (YoY +73.4%), Ordinary Income ¥72.0B (YoY +32.3%), and Net Income attributable to owners of parent ¥77.0B (YoY +103.0%). Progress rates against current results are Revenue 83.5%, Operating Income 57.6%, Ordinary Income 75.6%, and Net Income 49.2%, indicating the need to build profits in H2. Revenue is expected to grow +19.7% year-on-year, implying acceleration from H1 results of +6.7%, contingent on realization of M&A integration benefits and expansion of existing businesses. The full-year operating margin is forecast at 3.8%, implying +120bp improvement from H1 2.6%, contingent on further SG&A efficiency and maintenance of gross margin. Ordinary Income assumes continued non-operating income from dividends and FX despite the drop in special gains. Net Income is forecast to increase +103.0% compared to the prior year’s level after one-off large gains, assuming a reversal of the upfront impairments and restructuring costs recorded in H1 and normalization of tax burden. Dividend forecast is ¥0 (a reduction from ¥40 in the prior year), interpreted as an adjustment to total dividends relative to the Net Income forecast of ¥77.0B. Achieving the full-year forecast requires maintenance of gross margin and SG&A ratio improvements in H2, cash generation via working capital efficiency improvement, and steady progress in M&A integration.
Year-end dividend was ¥40, with total dividends of approximately ¥45.6B. The payout ratio relative to Net Income attributable to owners of parent ¥37.9B was 120%, exceeding profits. The prior year also paid ¥40 (payout ratio 30.9% relative to the prior-year one-off high Net Income ¥152.3B), showing a stance to maintain a certain dividend regardless of profit volatility. This fiscal year’s FCF was ¥-350.7B, so dividends were not covered by internal funds; combined with treasury stock acquisition ¥128.7B, total shareholder returns were approximately ¥174.3B, about 4.6x this fiscal year’s Net Income, funded by external financing (long-term borrowings raised ¥360.0B, etc.). Conversely, the full-year dividend forecast is ¥0, a cut from ¥40 the prior year, interpreted as an adjustment of dividend policy relative to the Net Income forecast ¥77.0B. Large-scale treasury stock purchases were conducted this fiscal year, but future continuity depends on capital allocation policy and profit/CF trends. Sustainable shareholder returns require normalization of Operating CF, FCF turning positive through inventory compression, and securing stable earnings after accounting for goodwill amortization and impairment; in the near term, payout ratio and Total Return Ratio are expected to be managed flexibly.
【Industry Position】(reference, our company’s data) Within the retail sector (2025-FY, n=47), Operating margin 2.6% is below the sector median 4.6% (IQR 1.7%–8.2%), indicating low profitability. Net income margin 2.3% is below the median 3.3% (IQR 0.9%–5.8%), with goodwill amortization burdening margins. ROE 3.8% is below the median 5.9% (IQR 2.6%–12.0%), indicating low capital efficiency. Total asset turnover 0.96x is below the median 1.17x (IQR 0.85–1.55), with M&A asset growth dragging turnover down. Inventory turnover days 143 days greatly exceed the median 65.7 days (IQR 17–111), indicating poor inventory efficiency. CCC 128 days far exceeds the median 39.6 days (IQR 4–73), highlighting working capital constraints. Current ratio 226.4% slightly exceeds the median 184% (IQR 126–254), so short-term liquidity is healthy. Equity Ratio 57.0% exceeds the median 50.2% (IQR 40–64%), but declined significantly from 76.4% in the prior year, a large drop relative to peers. Payout ratio 120% far exceeds the median 27% (IQR 20–34%), temporarily returning more than profits. Operating CF/EBITDA ratio -0.94x is well below the median cash conversion 1.57x (IQR -0.03–2.75), placing cash generation at the bottom of the sector. In industry comparison, profitability, capital efficiency, and inventory efficiency are weak; improving gross margin, compressing inventory, and early realization of M&A integration effects are keys to improving relative positioning.
Three key points from the results. First, the improvement trend in Operating margin (+160bp) is supported by simultaneous gross margin improvement (+110bp) and SG&A ratio improvement (-42bp), indicating success in product mix optimization and cost control. Achieving the full-year operating margin target of 3.8% requires continued improvement in H2 at similar levels, focusing on further SG&A efficiency and sustained restraint on markdowns. Second, the large negative Operating CF (¥-77.2B) and persistently high inventory and CCC (inventory turnover days 143, CCC 128) are structural issues; normalizing cash generation through working capital compression is a prerequisite for sustainable shareholder returns and financial soundness. Improving inventory efficiency is key to both cash generation and deleveraging. Third, the rapid increase in goodwill and intangible assets from M&A (total ¥722.1B, 72.7% of net assets) entails both potential integration benefits and impairment risk; EBITDA growth and ROIC improvement will be indicators of successful integration. Current ROIC 2.2% is below the cost of capital, and evaluation will hinge on monetization of M&A assets and profit growth after goodwill amortization.
This report was auto-generated by AI analyzing XBRL financial statement data to produce a financial analysis document. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by our firm based on public financial statement data. Investment decisions should be made at your own responsibility, and when necessary consult a professional.