| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥462.8B | ¥356.1B | +30.0% |
| Operating Income / Operating Profit | ¥25.1B | ¥15.1B | +65.8% |
| Ordinary Income | ¥33.2B | ¥19.2B | +73.1% |
| Net Income | ¥21.0B | ¥19.4B | +8.1% |
| ROE | 2.3% | 2.0% | - |
FY2026 Q1 results: Revenue ¥462.8B (YoY +¥106.7B +30.0%), Operating Income ¥25.1B (YoY +¥10.0B +65.8%), Ordinary Income ¥33.2B (YoY +¥14.0B +73.1%), Net income attributable to owners of parent for the quarter ¥21.0B (YoY +¥1.4B +8.1%). Revenue achieved a high level of growth; improvement in SG&A ratio drove Operating Margin up 1.6pt from 3.8% to 5.4% year-on-year. However, a high effective tax rate of 40.6% suppressed Net Income growth, causing Net Margin to decline 1.0pt from 5.5% to 4.5%. Non-operating income included Dividend Income ¥5.6B and Equity-method investment income ¥2.1B which boosted Ordinary Income. Comprehensive income was negative ¥-12.4B, and Unrealized gains/losses on securities ¥-33.5B pressured Equity.
[Revenue] Revenue was ¥462.8B (YoY +30.0%), a large increase. By segment, core Apparel-related amounted to ¥438.1B (+28.3%), accounting for 94.7% of the total, and Other businesses amounted to ¥26.5B (+63.3%), accounting for 5.3%. The Apparel-related increase is attributable to store expansion domestically and internationally and growth in same-store sales. Other businesses include sales agency, staffing, and foodservice, showing high growth despite a small revenue share.
[Profitability] Cost of goods sold was ¥202.0B, Gross Profit ¥260.8B, Gross Margin 56.3% (down 1.2pt from 57.5% a year earlier). SG&A was ¥235.6B, SG&A ratio 50.9% (improved 2.4pt from 53.3% a year earlier), resulting in Operating Income ¥25.1B (Operating Margin 5.4%, up 1.6pt from 3.8% a year earlier). The decline in Gross Margin likely reflects changes in product mix and pricing strategy, but improved SG&A efficiency offset this, improving Operating Margin. Non-operating income totaled ¥10.5B (Dividend Income ¥5.6B, Equity-method investment income ¥2.1B, Foreign exchange gains ¥1.2B, etc.), and Non-operating expenses ¥2.5B (Interest expense ¥2.0B, etc.), resulting in Ordinary Income ¥33.2B (+73.1%). Extraordinary gains ¥2.6B (gain on sale of investment securities ¥2.6B) and extraordinary losses ¥0.4B (impairment loss ¥0.1B, valuation loss on investment securities ¥0.1B, etc.) were recorded, producing Profit before income taxes ¥35.4B. After income taxes of ¥14.4B (effective tax rate 40.6%) and adjustment for loss attributable to non-controlling interests ¥0.2B, Net income attributable to owners of parent was ¥21.0B (+8.1%). In conclusion, while revenue and profit increased, there is a large divergence between Ordinary Income growth (+73.1%) and Net Income growth (+8.1%), with high tax burden compressing bottom-line profit.
The Apparel-related business reported Revenue ¥438.1B (YoY +28.3%) and Operating Income ¥25.0B (YoY +48.8%), with an Operating Margin of 5.7% (improved 0.8pt from 4.9% a year earlier). SG&A efficiency contributed to margin improvement. Other businesses reported Revenue ¥26.5B (YoY +63.3%) and Operating Income ¥3.5B (YoY +135.4%), with an Operating Margin of 13.1% (improved 4.2pt from 8.9% a year earlier). Profitability improvements in sales agency, staffing, and foodservice were notable. Segment profit total was ¥28.5B, less corporate adjustments of -¥3.3B, resulting in Consolidated Operating Income ¥25.1B. The Apparel-related segment accounted for approximately 88% of Operating Income, indicating high dependence on the core business.
[Profitability] Operating Margin 5.4% (improved 1.6pt from 3.8% a year earlier), Net Margin 4.5% (down 1.0pt from 5.5% a year earlier). ROE 2.3% (improved 0.3pt from 2.0%) remains low, though improvement in capital turnover contributed. Gross Margin 56.3% decreased 1.2pt year-on-year, but SG&A ratio 50.9% improved 2.4pt, demonstrating leverage at the operating level. [Cash Quality] Days Sales Outstanding 117 days, Inventory Days 584 days, Cash Conversion Cycle 510 days indicate low working capital efficiency, suggesting inventory stagnation and collection delays. High effective tax rate 40.6% also suppresses Operating Cash Flow. [Investment Efficiency] Total Asset Turnover 0.27x (improved from 0.20x a year earlier), with revenue expansion contributing to asset efficiency. Intangible assets ¥390.5B (23.1% of total assets) and Goodwill ¥316.6B (34.1% of equity) are relatively high, implying moderate sensitivity to future impairment risk. [Financial Soundness] Equity Ratio 54.9% (down 2.1pt from 57.0% a year earlier), D/E ratio 0.82x (up from 0.76x), indicating slightly higher financial leverage. Current Ratio 200.3%, Quick Ratio 121.1% show good short-term liquidity. Cash and deposits ¥264.4B cover short-term borrowings ¥126.8B by 2.1x, and Interest Coverage Ratio 12.6x indicates strong ability to bear interest burden.
Although a CF statement disclosure is not provided, funding trends are analyzed from BS movements. With revenue growth, Accounts Receivable increased to ¥148.0B (from ¥138.6B a year earlier, +¥9.4B), and Inventory rose to ¥312.5B (from ¥297.2B a year earlier, +¥15.3B), expanding working capital. Accounts Payable was ¥105.5B (flat from ¥105.7B a year earlier), so offsetting effects from trade payables are limited. Short-term borrowings increased significantly to ¥126.8B (from ¥76.4B a year earlier, +¥50.4B +66.0%), indicating that working capital growth was financed by short-term liabilities. Cash and deposits decreased to ¥264.4B (from ¥284.8B a year earlier, -¥20.4B), suggesting that cash generation from operations was constrained by increases in inventory and receivables. Unrealized gains/losses on securities decreased by ¥-33.4B from ¥112.8B a year earlier to ¥79.4B, and negative comprehensive income pushed Equity down to ¥927.5B (from ¥993.2B a year earlier, -¥65.7B). Investment securities decreased to ¥244.9B (from ¥286.3B a year earlier, -¥41.4B), suggesting some disposals. Long-term borrowings slightly declined to ¥303.1B (from ¥316.2B a year earlier, -¥13.1B).
Operating Income ¥25.1B represents results of recurring business activities and can be considered core earnings. Of Non-operating income ¥10.5B, Dividend Income ¥5.6B and Equity-method investment income ¥2.1B account for ¥7.7B, indicating investment returns boosted earnings. Foreign exchange gains ¥1.2B include temporary factors from FX movements. Extraordinary gains ¥2.6B (gain on sale of investment securities) are one-off, and extraordinary losses ¥0.4B are small, so their impact on earnings quality is limited. From Profit before income taxes ¥35.4B to Net Income ¥21.0B, income taxes ¥14.4B (effective tax rate 40.6%) diluted profitability. Comprehensive income was negative ¥-12.4B, including Unrealized gains/losses on securities ¥-33.5B, which are unrealized market movements in held securities and not realized earnings. Dependence on non-operating income is somewhat high; EBT/EBIT is 1.41 indicating a significant non-operating contribution. Dividend and equity-method income can be ongoing income sources, while FX gains/losses are volatile.
Full Year / FY forecast: Revenue ¥2000.0B (YoY +19.7%), Operating Income ¥75.0B (+73.4%), Ordinary Income ¥72.0B (+32.3%), Net Income ¥77.0B (+0.7%). Q1 progress rates vs full-year forecast: Revenue 23.1% (about one quarter), Operating Income 33.5% (about one third), Ordinary Income 46.1% (about half), Net Income 27.3% (about one quarter). Progress rates for Operating Income and Ordinary Income exceed the standard 25%, with early realization of SG&A efficiency and contribution from non-operating income. Revenue and Net Income progress are generally on track. The Ordinary Income progress exceeding Operating Income reflects substantial contribution from non-operating income, and Net Income progress lagging reflects high tax burden. At present, progress toward the full-year forecast is smooth, but normalization of inventory turnover and stabilization of tax rate are key to achieving FY targets. No forecast revisions were made this quarter.
Dividend forecast for the period is ¥0, with Payout Ratio 0%. Dividend was also ¥0 in the prior year period, continuing no dividend policy. Meanwhile, Treasury stock increased from ¥-52.3B a year earlier to ¥-82.0B this period (change -¥29.7B), indicating share buybacks as shareholder return. With Cash and deposits ¥264.4B and cash-generation potential from revenue growth and operating profit improvement, there is capacity for returns; however, given the increase in short-term borrowings +¥50.4B and heavy working capital burden, resumption of dividends or expansion of total returns will likely require improvements in inventory turnover and collection efficiency. Share buybacks support per-share value but somewhat reduce capital flexibility.
Concentration risk in Apparel-related business: Apparel-related accounts for 94.7% of Revenue and about 88% of Operating Income, making results highly sensitive to changes in consumer trends, intensified competition, and accelerated e-commerce competition. Deterioration in this segment would directly affect consolidated results.
Working capital efficiency deterioration risk: Inventory Days 584 days, Days Sales Outstanding 117 days, Cash Conversion Cycle 510 days indicate heavy working capital and raise concerns about inventory write-downs, additional markdowns, and cash-flow pressure. Short-term borrowings ¥126.8B increased +66% YoY, and financing working capital with short-term debt raises refinancing risk.
High tax burden and earnings quality risk: Effective tax rate 40.6% squeezes Net Income, and dependence on non-operating income (Dividend / Equity-method income) is relatively high (EBT/EBIT=1.41). Dividend income depends on equity markets, and equity-method income depends on investee performance; while they supplement core operating earnings, they introduce volatility. Unrealized gains/losses on securities ¥-33.5B pressure Equity, and market value fluctuations may affect financial soundness metrics.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.4% | 3.4% (0.8%–7.7%) | +2.1pt |
| Net Margin | 4.5% | 2.2% (0.5%–6.2%) | +2.3pt |
Profitability is above the retail industry median. SG&A efficiency contributed, with Operating and Net Margins both more than 2pt above industry median.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 30.0% | 7.7% (0.8%–14.6%) | +22.3pt |
Revenue growth rate 30.0% far exceeds industry median 7.7%, indicating aggressive expansion and strong same-store growth, placing the company among high-growth peers.
※Source: Company compilation
SG&A efficiency and sustainability of high growth: Revenue +30.0% and SG&A ratio improvement of 2.4pt improved Operating Margin to 5.4%, 2.1pt above industry median. Expansion and efficiency measures in the Apparel-related business have driven margin improvement; if sustained, further profitability gains are expected. However, Gross Margin declined 1.2pt, so product mix and pricing strategy will be key to maintaining margins.
Working capital efficiency and financial strategy warrant attention: Inventory Days 584 days, DSO 117 days, CCC 510 days indicate poor working capital efficiency with evident inventory stagnation and collection delays. Short-term borrowings rose +66% YoY, and financing working capital with short-term debt increases refinancing risk. Normalizing inventory turnover and strengthening receivables management are prerequisites to improving earnings quality and cash generation; monitoring quarterly trends for improvement is important.
Dependence on non-operating income and tax burden: Dividend Income ¥5.6B and Equity-method income ¥2.1B contributed to Ordinary Income growth of +73.1%, but a high effective tax rate 40.6% limited Net Income growth to +8.1%. While non-operating income is expected to be a continuing income source, it is sensitive to equity markets and FX volatility. Stabilization of core operating earnings and tax rate normalization are key to Net Income growth. Operating Income progress vs full-year guidance is ahead of schedule; sustainability of improvements is a monitoring point.
This report is an earnings analysis document automatically generated by AI analyzing XBRL earnings disclosure data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the company based on public financial disclosures. Investment decisions are your own responsibility; consult a professional if necessary before making any investment decisions.
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