| Metric | Current | Prior | YoY |
|---|---|---|---|
| Revenue | ¥6082.7B | - | - |
| Operating Income | ¥375.8B | - | - |
| Ordinary Income | ¥370.4B | - | - |
| Net Income | ¥255.0B | - | - |
| ROE | 12.3% | - | - |
FY2026 Q3 results show Revenue of 608.3B yen, Operating Income of 37.6B yen (operating margin 6.2%), Ordinary Income of 37.0B yen, and Net Income of 25.5B yen. The company operates a single segment business focused on food-centered supermarkets. Operating margin of 6.2% and net profit margin of 4.2% indicate stable profitability supported by asset turnover of 1.43x and financial leverage of 2.06x, resulting in ROE of 12.1%. Full-year guidance projects Revenue of 772.0B yen, Operating Income of 33.8B yen, and Net Income of 20.5B yen, with Q3 cumulative results showing generally consistent progress toward these targets.
Revenue reached 608.3B yen with gross profit of 146.6B yen, yielding a gross margin of 24.1%, which aligns with standard levels for food retail operations. Selling, general and administrative expenses totaled 131.4B yen, resulting in operating income of 37.6B yen and an operating margin of 6.2%. The margin level reflects the company's ability to maintain pricing discipline in its merchandise mix while managing cost structures in a competitive retail environment. Non-operating items show a slight reduction from operating income to ordinary income of 37.0B yen, with interest coverage ratio of 48.9x indicating minimal interest burden. The gap between ordinary income (37.0B yen) and net income (25.5B yen) represents an effective tax rate of 31.5%, which is within the standard corporate tax range. The revenue-to-profit pattern demonstrates a "stable revenue with controlled profitability" model, where gross margin management and SG&A efficiency are key drivers of bottom-line performance.
The company operates a single segment of food-centered supermarket business, with no separate segment breakdown disclosed.
[Profitability] ROE of 12.1% is supported by net profit margin of 4.2%, total asset turnover of 1.43x, and financial leverage of 2.06x, with the high asset turnover reflecting efficient utilization of store assets and inventory management characteristic of supermarket operations. Operating margin of 6.2% demonstrates operational efficiency in converting gross profit to operating profit. [Cash Quality] Total assets of 425.9B yen include cash position, with tangible fixed assets representing 59.8% of total assets, indicating capital-intensive store infrastructure. Current ratio of 87.2% (current assets 111.6B yen against current liabilities 128.0B yen) signals a working capital deficit of 16.4B yen, requiring attention to short-term liquidity management. [Investment Efficiency] Asset turnover of 1.43x reflects rapid inventory and sales cycles typical of food retail operations. [Financial Health] Equity ratio of 48.6% (total equity 206.9B yen) provides solid capital foundation, while interest-bearing debt of 58.2B yen results in debt-to-capital ratio of 22.0%, indicating conservative leverage. Current ratio below 1.0x warrants monitoring of working capital cycle, particularly the balance between inventory turnover and accounts payable management.
Balance sheet analysis reveals working capital of negative 16.4B yen, indicating the company operates with payables of 64.6B yen supporting inventory and receivables cycles, a common characteristic of retail business models that leverage supplier payment terms. The equity base of 206.9B yen provides substantial cushion against total liabilities of 219.0B yen, with interest-bearing debt limited to 58.2B yen representing only 28.1% of total equity. Short-term borrowings of 0.8B yen represent minimal immediate refinancing pressure. The capital structure shows tangible fixed assets of 254.6B yen substantially exceed net worth, suggesting store properties and facilities are partially funded through long-term obligations. Total assets of 425.9B yen grew from the prior period while maintaining stable leverage ratios, indicating capacity for continued operational investment while preserving financial flexibility.
Ordinary income of 37.0B yen versus operating income of 37.6B yen shows non-operating net expense of approximately 0.6B yen, indicating core earnings are primarily driven by business operations with minimal dependency on financial or non-recurring items. The small differential between operating and ordinary income (1.6% of operating income) demonstrates earnings stability anchored in retail operations. With effective tax rate of 31.5% applied to pre-tax income, net income of 25.5B yen represents consistent tax treatment without material extraordinary adjustments. Interest coverage ratio of 48.9x confirms that financial expenses are well-controlled relative to operating earnings, with interest burden representing only 2.0% of EBIT. The consistency between operating performance and bottom-line results, combined with minimal non-operating volatility, indicates earnings quality is fundamentally sound and derived from recurring business activities.
Full-year guidance targets Revenue of 772.0B yen, Operating Income of 33.8B yen, Ordinary Income of 33.0B yen, and Net Income of 20.5B yen. Q3 cumulative results show Revenue of 608.3B yen (78.8% of full-year target), Operating Income of 37.6B yen (111.2% of target), and Net Income of 25.5B yen (124.4% of target). Revenue progress of 78.8% is marginally ahead of the standard 75% milestone for Q3, indicating consistent top-line execution. Operating income progress of 111.2% significantly exceeds the standard benchmark, suggesting either stronger-than-expected Q1-Q3 performance or potential for upward guidance revision. Net income achievement of 124.4% of full-year target similarly points to profit outperformance relative to initial projections. The substantial over-achievement in profit metrics while revenue tracks closer to plan suggests improved operational efficiency, better cost control, or favorable non-recurring factors in the first nine months.
Full-year forecast indicates dividend per share of 62.5 yen. Based on forecasted net income of 20.5B yen and EPS of 501.22 yen, the implied share count suggests total dividend payout would represent a payout ratio of approximately 12.5%, indicating conservative distribution policy with substantial earnings retention for business reinvestment and financial buffer maintenance.
Current ratio of 87.2% represents immediate liquidity risk, as current liabilities of 128.0B yen exceed current assets of 111.6B yen by 16.4B yen, requiring careful management of payment cycles and cash conversion to avoid short-term funding stress. Negative working capital of 16.4B yen, while common in retail models relying on supplier credit, leaves limited buffer if payment terms tighten or inventory turnover slows. Operating margin of 6.2% and net margin of 4.2% provide modest cushion against cost inflation pressures, particularly rising labor costs, utilities, and rent expenses that could compress profitability if not offset by pricing power or efficiency gains.
[Industry Position] (Reference - Proprietary Analysis) Profitability: Operating margin of 6.2% exceeds retail industry median of 3.9% (IQR: 1.2%-8.9%), placing the company in the upper half of sector performance. Net profit margin of 4.2% significantly outperforms industry median of 2.2% (IQR: 0.2%-5.7%), indicating superior cost management and operational efficiency. ROE of 12.1% substantially exceeds industry median of 2.9% (IQR: 0.5%-7.4%), reflecting effective capital deployment and profitability generation. Financial Health: Equity ratio of 48.6% falls below industry median of 56.8% (IQR: 39.2%-64.5%), suggesting moderately higher leverage relative to peers. Current ratio of 0.87x significantly trails industry median of 1.93x (IQR: 1.48x-2.73x), confirming below-average short-term liquidity as a relative weakness requiring attention. Efficiency: Asset turnover of 1.43x substantially exceeds industry median of 0.95x (IQR: 0.77-1.16), demonstrating superior asset productivity and rapid inventory-to-sales conversion typical of efficient food retail operations. Working Capital: Payables turnover and working capital management metrics would benefit from tracking against industry median payables days of 59.1 (IQR: 44.3-69.8 days) to ensure payment cycles remain sustainable. (Industry: Retail sector, 2025-Q3 comparison, n=16 companies, Source: Proprietary analysis)
Profitability metrics demonstrate operational strength, with operating margin of 6.2% and ROE of 12.1% both exceeding retail industry medians by substantial margins (6.2% vs. 3.9% and 12.1% vs. 2.9% respectively), indicating effective merchandising strategy and cost discipline in a competitive sector. Asset efficiency stands out with asset turnover of 1.43x well above industry median of 0.95x, reflecting rapid inventory cycles and productive deployment of store infrastructure capital. Current ratio of 87.2% and negative working capital of 16.4B yen represent the primary area requiring monitoring, as this liquidity position falls significantly short of industry standards (median 1.93x) and could constrain operational flexibility if payment terms tighten or cash conversion slows, though the company's strong equity base of 206.9B yen and low debt-to-capital ratio of 22.0% provide medium-term financial resilience.
This report was automatically generated by AI analyzing XBRL earnings data as an earnings analysis tool. This is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled from publicly available earnings data. Please make investment decisions at your own responsibility and consult professionals as needed.