RESORTTRUST (4681) FY2026 Q3 Earnings Report

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Executive Summary

Revenue and earnings declined as the core Membership Rights Business suffered a substantial decrease in revenue that could not be fully offset by continued revenue growth in the other businesses. Revenue was ¥1,688.2B (-14.6% YoY), Operating Income was ¥198.6B (-23.0%), Ordinary Income was ¥197.7B (-23.7%), and Net Income was ¥138.2B (-24.6%, before deduction of the portion attributable to non-controlling interests). The gross profit margin remained high at 88.2%, but profit margins contracted because SG&A expenses increased amid declining revenue.

Factors Affecting Performance

【Revenue】External revenue from the Membership Rights Business declined significantly to ¥421.8B (-47.7% YoY), becoming the primary cause of the Company-wide revenue decline. Meanwhile, the Hotel, Restaurant and Other Business secured revenue growth, with revenue of ¥844.4B (+7.6%), while the Medical Business generated revenue of ¥416.9B (+9.6%), highlighting the clear contrast among the businesses.

【Profit and Loss】The Operating Income margin was 11.8%, down from 13.0% in the same period last year. While Revenue decreased by 14.6%, SG&A expenses increased by 5.2%, and the SG&A ratio rose from 62.1% to 76.5%, magnifying the decline in earnings. Segment profit from the Membership Rights Business was ¥141.8B (-40.1%), accounting for 52.1% of total segment profit, making its decline the primary driver of the Company-wide earnings decline. Conversely, segment profit from the Hotel, Restaurant and Other Business improved substantially to ¥64.0B (+80.7%), with its profit margin rising from 4.3% to 7.3%. Net extraordinary gains were positive at ¥8.8B, but their contribution declined from the ¥17.2B gain in the same period last year, which also materially contributed to the decrease in Net Income. In conclusion, the Company recorded lower revenue and lower earnings.

Segment Analysis

The Membership Rights Business recorded external revenue of ¥421.8B (-47.7% YoY), segment profit of ¥141.8B (-40.1%), and a profit margin of 33.6% (29.3% in the previous year); although revenue declined substantially, the profit margin itself improved. The Hotel, Restaurant and Other Business recorded external revenue of ¥844.4B (+7.6%), segment profit of ¥64.0B (+80.7%), and a profit margin of 7.3% (4.3% in the same period last year), indicating a notable improvement in profitability. The Medical Business recorded external revenue of ¥416.9B (+9.6%), segment profit of ¥60.5B (+6.5%), and a profit margin of 14.2% (14.7% in the same period last year); it achieved higher revenue and higher earnings, although its profit margin declined slightly. Corporate expenses were ¥73.7B, down 4.2% from ¥76.9B in the previous year, but this was insufficient to offset the decline in profit from the Membership Rights Business. Segment profit composition was 52.1% for the Membership Rights Business, 22.3% for the Medical Business, and 23.6% for the Hotel, Restaurant and Other Business, indicating that dependence on the core business remains high.

Key Financial Indicators

【Profitability】The Operating Income margin was 11.8%, down 1.2pt from 13.0% in the same period last year, while the Net Income margin was 8.2%, down from 9.3% in the same period last year. Although the gross profit margin remained high at 88.2%, the SG&A ratio increased from 62.1% to 76.5%, serving as the primary cause of the decline in profitability.【Cash Quality】Pre-tax income of ¥206.5B includes net extraordinary gains of ¥8.8B, indicating that the contribution from non-recurring items was limited.【Investment Efficiency】ROE (annualized) was 11.7%, reflecting a structure in which financial leverage (total assets/net assets, approximately 3.5x) supports the decline in the Net Income margin.【Financial Soundness】The Equity Ratio was 28.8%, slightly down from 29.3% in the same period last year, while cash and deposits increased in depth to ¥433.1B.

Cash Flow Analysis

Although detailed disclosure of the cash flow statement is not available, analysis of fund movements based on changes in the balance sheet indicates that cash and deposits increased by +52.8% to ¥433.1B from ¥283.5B in the same period last year, showing an accumulation of funds. Advances received increased by +32.2% YoY to ¥1,417.8B, and advance collections in the Membership Rights Business and other businesses are considered one factor behind the increase in cash and deposits. Short-term borrowings were ¥35.7B, down from the same period last year, indicating reduced dependence on interest-bearing debt. Property, plant and equipment stood at ¥2,079.5B, with high levels of investment continuing, reflecting an asset-intensive business structure.

Quality of Earnings

Non-operating income and expenses were broadly balanced, with non-operating income of ¥10.2B versus non-operating expenses of ¥11.1B, indicating no significant distortion in the recurring earnings structure. Extraordinary income was ¥9.2B, including a gain on sales of property, plant and equipment of ¥3.5B and a gain on sales of investment securities of ¥0.5B, while extraordinary losses were limited to a loss on disposal of property, plant and equipment of ¥0.4B. Net extraordinary gains were positive at ¥8.8B, down from the ¥17.2B gain in the same period last year. As a result, pre-tax income of ¥206.5B includes a certain amount of non-recurring profit contribution, which should be considered when evaluating recurring earnings power. Comprehensive income was ¥133.9B, below Net Income of ¥138.2B, primarily due to foreign currency translation adjustments of -¥14.0B. This divergence resulted from the foreign exchange impact on overseas assets and foreign subsidiaries and should be distinguished from the recurring earnings power of the business.

Earnings Forecasts and Guidance

The cumulative Q3 progress rates against the full-year Company forecasts were 64.9% for Revenue, 68.5% for Operating Income, and 68.2% for Ordinary Income, below the standard 75% progress level. The Revenue progress shortfall was particularly significant at 10.1pt, apparently primarily due to the substantial decline in revenue from the Membership Rights Business. To achieve the full-year plan, Revenue of ¥911.8B and Operating Income of ¥91.4B will be required in Q4, making the revenue recognition trend in the Membership Rights Business a key focus. The Company forecasts full-year Revenue of ¥2,600.0B (+4.3% YoY) and Operating Income of ¥290.0B (+10.0%), based on an expected recovery in earnings in the second half.

Shareholder Returns

The Q2 dividend was ¥17.00 per share, while the full-year forecast dividend is ¥34.00, implying that the year-end dividend is also assumed to be the same amount. Based on forecast full-year Net Income of ¥20,300 million (attributable to owners of the parent) and forecast EPS of ¥95.72, the Payout Ratio is approximately 35.5%, a sustainable level when dividends alone are considered. Treasury shares have increased compared with the same period last year, but the acquisition amount for the current period has not been disclosed, making it impossible to calculate the Total Return Ratio including share repurchases.

Risk Factors

1. Revenue volatility risk in the core business: Revenue from the Membership Rights Business plunged by -47.7% YoY, and because this business accounts for 52.1% of total segment profit, its fluctuations have a significant impact on Company-wide performance.

2. Capital structure vulnerability: Total liabilities were ¥3,881.9B versus net assets of ¥1,570.9B, resulting in a high debt-to-equity ratio of approximately 2.5x. Although current assets of ¥2,417.0B versus current liabilities of ¥2,063.6B secured a current ratio of 117.1%, the high proportion of short-term liabilities warrants attention.

3. Performance obligations related to advances received (contract liabilities): Advances received increased by +32.2% YoY to ¥1,417.8B. The expansion of liabilities corresponding to future service provision and facility usage requires ongoing monitoring from the perspectives of revenue recognition and consistency with fulfillment costs.

Industry Benchmark (For Reference; Compiled by the Company)

Profitability and Returns

Within the industry, both the Operating Income margin and Net Income margin exceed the median, indicating relatively high profitability.

Growth and Capital Efficiency

The Revenue growth rate is substantially below the industry median, positioning the Company as one experiencing a revenue decline within the industry.

※Source: Compiled by the Company

Key Earnings Highlights

1. Revenue from the Membership Rights Business plunged by -47.7% YoY, serving as the core factor behind the Company-wide decline in revenue and earnings. The trend in revenue recognition for this business will be a focus of future performance.

2. Segment profit from the Hotel, Restaurant and Other Business improved substantially by +80.7% YoY, with its profit margin rising from 4.3% to 7.3%, indicating progress in diversifying earnings sources.

3. Cumulative Q3 progress against the full-year plan was 64.9% for Revenue and 68.5% for Operating Income, below the standard 75% progress level, resulting in an earnings structure with a high concentration of performance in Q4.

Theoretical Share Price (Reference Value)

Sensitivity: ¥810–¥858 at ±1% for the cost of equity, and ¥831–¥837 at ±0.1 for ω.

Notes:

• Net assets as of the quarter-end are used (there is a timing difference from 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 share price or a recommendation of any specific investment action, and does not predict or guarantee the future share price.)

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This report is an earnings analysis document automatically generated by AI through analysis of 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 responsibility, after consulting with a professional as necessary.

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