TAKE AND GIVE. NEEDS Co.,Ltd. FY2026 Q2 Earnings Report

Quick View

Executive Summary

The most important takeaway from this earnings report is that TAKE AND GIVE NEEDS returned to profitability from the loss recorded in the same period of the previous year, as demand recovered and costs were absorbed. Revenue was ¥239.1B (+12.2% YoY), Operating Income was ¥6.1B (+231.0% from the previous year's ¥-4.7B), Ordinary Income was ¥3.8B (+150.3% from the previous year's ¥-7.5B), and Net Income was ¥8.3B (+254.3% from the previous year's ¥-5.4B). In addition to higher revenue, the recovery in utilization rates and average unit prices in the core Domestic Wedding Business led the improvement in earnings. However, Net Income was supported by a ¥9.7B gain on the sale of fixed assets, meaning that temporary factors had a significant impact.

Factors Behind Earnings Fluctuations

【Revenue】Revenue was ¥239.1B, representing a +12.2% increase YoY. By segment, the core Domestic Wedding Business led overall performance with ¥231.9B in revenue (96.1% composition ratio, +13.2% YoY), while Other Businesses contracted to ¥9.4B (3.9% composition ratio, -16.6% YoY). The recovery in the number of weddings held and average customer spending, together with improved venue utilization, were the primary drivers of higher revenue.

【Profit and Loss】Operating Income turned profitable at ¥6.1B (versus ¥-4.7B in the previous year), and the Operating Income Margin improved to 2.5% (versus -2.2% in the previous year). Operating Income for Domestic Wedding alone improved to ¥16.5B, with a margin of 7.1%. However, Company-wide expenses (SG&A) remained substantial at ¥12.6B, weighing on the Company-wide profit margin. Ordinary Income was ¥3.8B, while non-operating expenses of ¥2.6B, including ¥2.4B in interest expenses, acted as a downward factor. Net Income was ¥8.3B; however, the ¥9.7B gain on the sale of fixed assets accounted for most of the ¥13.2B Profit Before Tax, requiring caution from an earnings-quality perspective because Net Income growth was significantly greater than growth at the operating and ordinary income levels. In conclusion, the Company achieved both revenue growth and profit growth.

Segment Analysis

The Domestic Wedding Business improved significantly, with revenue of ¥231.9B (+13.2% YoY), Operating Income of ¥16.5B (+255.7% YoY), and a margin of 7.1% (2.0% in the previous year), leading Company-wide performance. Other Businesses (finance and credit, travel, etc.) generated revenue of ¥9.4B (-16.6% YoY) and Operating Income of ¥2.1B (-12.4% YoY), with a high margin of 22.5% but a small scale. There is a significant difference in margins between segments, and the structure is such that margin improvement in the large-scale Domestic Wedding Business determines Company-wide profitability. Company-wide expenses were ¥12.6B, which was deducted from total reported segment profit of ¥18.6B, resulting in Operating Income of ¥6.1B.

Key Financial Indicators

【Profitability】The Operating Income Margin was 2.5% (versus -2.2% in the previous year), the Net Profit Margin was 3.4%, and ROE was 4.6%, all improving from the loss position recorded in the previous year. Although the gross profit margin remained high at 67.3%, the impact of rising costs is apparent.【Cash Flow Quality】Operating Cash Flow (OCF) was ¥8.6B, exceeding Net Income of ¥8.3B. However, compared with the subtotal of ¥12.3B before changes in working capital, actual OCF was limited to ¥8.6B, with a decrease in accounts payable (-¥2.7B) and a decrease in contract liabilities (-¥1.7B) weighing on cash conversion.【Investment Efficiency】Capital expenditures of ¥9.8B were approximately equal to depreciation and amortization expense of ¥9.6B, indicating an investment scale primarily focused on maintenance and replacement.【Financial Soundness】The Equity Ratio improved to 37.2% (34.0% in the previous year). While total assets contracted to ¥489.5B (¥519.6B in the previous year), net assets increased to ¥182.0B (¥178.1B in the previous year). Long-term borrowings were ¥85.6B, having been reduced from the previous year, indicating an improving financial structure.

Cash Flow Analysis

OCF was ¥8.6B, a significant improvement from ¥-6.6B in the previous year, generating cash at approximately the same level as Net Income of ¥8.3B. Investing Cash Flow was positive at ¥13.9B, primarily because proceeds from the sale of fixed assets of ¥25.0B exceeded capital expenditures of ¥9.8B. This includes a temporary element that differs in nature from cash flow generated through ordinary business activities. Financing Cash Flow was ¥-39.7B, reflecting the repayment of ¥55.0B in long-term borrowings exceeding new borrowings of ¥15.5B, as the Company proceeded with debt reduction. Free Cash Flow, calculated as the sum of OCF and Investing Cash Flow, was ¥22.4B. However, because this figure benefited substantially from asset sales, the sustainability of cash flow at this level will depend on the continued accumulation of OCF and warrants monitoring going forward.

Earnings Quality

Of the current period's Profit Before Tax of ¥13.2B, the ¥9.7B gain on the sale of fixed assets, classified as extraordinary income, accounted for a significant proportion, indicating a high contribution from temporary factors to Net Income of ¥8.3B. Non-operating income and expenses consisted of income of ¥0.2B against expenses of ¥2.6B (including ¥2.4B in interest expenses), resulting in a net negative impact; items outside the core business therefore acted to reduce earnings. OCF of ¥8.6B exceeded Net Income of ¥8.3B, which is favorable from an accrual perspective (the difference between accounting profit and cash generation). However, compared with the subtotal of ¥12.3B before changes in working capital, decreases in accounts payable and contract liabilities partially offset cash-generation capacity. The divergence between Ordinary Income of ¥3.8B and Net Income of ¥8.3B resulted from extraordinary income, and it is necessary to assess normalized earnings power once this temporary factor falls away in the second half.

Earnings Forecast and Guidance

Progress against the full-year forecast was 48.8% for revenue, at ¥239.1B/¥490.0B, broadly in line with the 50% level expected based on the first-half period. Operating Income was ¥6.1B/¥15.0B, or 40.6%, while Ordinary Income was ¥3.8B/¥10.0B, or 37.8%, both somewhat behind schedule. On the other hand, Net Income of ¥8.3B had already exceeded the Company's full-year forecast Net Income of ¥8.0B as of Q2, resulting in a progress rate of more than 100%. However, the early achievement of the Net Income target depends on the temporary gain on the sale of fixed assets. Accordingly, progress in accumulating profit at the operating and ordinary income levels will be the substantive evaluation criteria in the second half. The Company has revised its earnings forecast during the current quarter.

Shareholder Returns

The interim dividend was ¥20 per share, and the full-year dividend forecast is ¥40. Based on total interim dividends of approximately ¥2.9B against interim Net Income attributable to owners of the parent of ¥8.0B, the Payout Ratio is approximately 36%, which is within a conservative range. Free Cash Flow of ¥22.4B is sufficient to cover the planned annual dividend and capital expenditures. However, both current-period Net Income and FCF benefited substantially from the gain on the sale of fixed assets, and the ability to maintain dividend capacity at this level from the next fiscal year onward will depend on improved cash generation at the operating level. No revision has been made to the dividend forecast.

Risk Factors

1. Short-term liquidity risk: Current assets were ¥111.4B against current liabilities of ¥157.1B, resulting in a current ratio of approximately 71%, below 1x. Short-term interest-bearing debt, consisting of short-term borrowings of ¥37.0B and long-term borrowings due within one year of ¥49.8B, exceeded cash and deposits of ¥48.4B, requiring attention to the stability of the Company's funding.

2. Business concentration risk: The Domestic Wedding Business accounts for 96.1% of revenue, indicating a high degree of dependence on a single business. The structure is such that fluctuations in wedding demand and utilization rates directly affect overall performance.

3. Earnings quality risk: The ¥9.7B gain on the sale of fixed assets accounted for a significant proportion of Profit Before Tax of ¥13.2B, with a substantial portion of Net Income dependent on temporary factors. Financial expenses, including interest expenses of ¥2.4B, also represent an ongoing burden.

Industry Benchmark (For Reference; Compiled by the Company)

Industry Benchmark (it_telecom)

Profitability and Return

Both the Operating Income Margin and Net Profit Margin are significantly below the industry median, placing profitability toward the lower end of the industry.

Growth and Capital Efficiency

The revenue growth rate is also below the industry median, with revenue growth remaining at or below the middle of the industry range.

Source: Compiled by the Company

Key Takeaways from the Earnings Report

1. The Operating Income Margin of the core Domestic Wedding Business improved from 2.0% in the previous year to 7.1%, indicating a recovery in demand and progress in cost absorption. Meanwhile, the Company-wide Operating Income Margin remained at 2.5%, with the burden of Company-wide expenses remaining a structural issue.

2. The ¥9.7B gain on the sale of fixed assets made a significant contribution to Net Income of ¥8.3B. While the full-year progress rate exceeded 100% for Net Income, it was 40.6% for Operating Income and 37.8% for Ordinary Income. The normalized earnings power after the temporary factor falls away in the second half will be a key focus.

3. Long-term borrowings have been reduced from the previous year and the Equity Ratio has improved to 37.2%. However, with the current ratio at approximately 71%, the short-term funding buffer remains limited. Monitoring from both the perspectives of the direction of financial soundness and liquidity would therefore be useful.

Theoretical Stock Price (Reference Value)

Sensitivity: ¥1,060–¥1,119 for ±1% in the Cost of Equity, and ¥1,084–¥1,092 for ±0.1 in ω.

Notes:

• Goodwill amortization of ¥2.3 per share is added back to earnings (for non-cash expense treatment and comparability with IFRS companies).
• Because Net Income progress against the full-year forecast (100%) exceeds the standard level (50%), forecast EPS is adjusted upward within a maximum range of +10% (because companies that are ahead of schedule tend to outperform forecasts. The adjustment may be excessive for businesses with strong seasonality).
• Net Income is substantially compressed relative to Operating Income due to tax burden, acquisition-related expenses, and non-controlling interests, among other factors (Net Income ÷ Operating Income 53%). This value reflects that compression at face value; if the factors are temporary, underlying earnings power may be higher.
• Because forecast ROE is below the Cost of Equity, the theoretical value is below Book Value Per Share.
• Net assets as of the quarter-end are used (there is a timing difference relative to the full-year forecast).
• Because net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual Income Model (Ohlson-type, explicit 5-year fade) / Interest rate reference month: 2026-07 / Mechanically calculated value based solely on publicly disclosed data; this is not a forecast of the market stock price or a recommendation of any specific investment action, and does not forecast or guarantee future stock prices.)

---

This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting with a professional as necessary.

---End of Report---