| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥484.9B | ¥481.1B | +0.8% |
| Operating Income | ¥19.9B | ¥16.6B | +19.8% |
| Ordinary Income | ¥24.2B | ¥20.8B | +16.0% |
| Net Income | ¥17.3B | ¥28.9B | -40.0% |
| ROE | 5.0% | 8.7% | - |
For the fiscal year ended March 2026, Revenue was ¥484.9B (YoY +¥3.8B, +0.8%), Operating Income was ¥19.9B (YoY +¥3.3B, +19.8%), Ordinary Income was ¥24.2B (YoY +¥3.4B, +16.0%), and Net Income attributable to owners of the parent was ¥16.2B (YoY -¥11.9B, -40.0%). At the operating level, gross margin improved to 37.6% and SG&A ratio was contained at 33.5%, resulting in an operating margin of 4.1% (YoY +0.7pt). At the ordinary level, non-operating income of ¥4.7B— including dividend income of ¥1.4B and foreign exchange gains of ¥0.7B—contributed, bringing the ordinary margin to 5.0%. Conversely, final profit declined substantially due to the reversal of large one-time gains in the prior year (gain on sale of fixed assets ¥5.5B, negative goodwill ¥11.0B, total ¥17.6B). This period’s special gains amounted to only ¥2.2B, including gain on sales of investment securities ¥2.1B, so Net Income decreased despite clear improvement in core earnings trends.
[Revenue] Revenue was ¥484.9B, a slight increase of +0.8% YoY. As a single-segment company (Household Products Business), regional and segmental breakdowns are not disclosed; top-line growth remained limited. Cost of sales was ¥302.5B, representing a cost of sales ratio of 62.4%, an improvement of -0.2pt YoY. Gross profit was ¥182.4B (gross margin 37.6%, +0.2pt YoY), aided by easing raw material cost pressures and the effectiveness of pricing policies. SG&A was ¥162.6B (SG&A ratio 33.5%, -0.3pt YoY), a slight decline; advertising expenses increased by ¥3.0B to ¥21.8B but were absorbed by efficiencies in other expenses.
[Profitability] Operating Income was ¥19.9B, up +19.8% YoY. Gross margin improvement and SG&A efficiencies produced operating leverage, expanding operating margin to 4.1% (+0.7pt). Non-operating income totaled ¥4.7B, composed mainly of dividend income ¥1.4B (YoY +¥0.1B), interest income ¥0.2B, foreign exchange gains ¥0.7B (YoY -¥0.9B), and equity-method investment gains ¥0.4B. Non-operating expenses were limited to ¥0.4B (interest expense ¥0.2B, etc.), resulting in Ordinary Income of ¥24.2B (+16.0% YoY) and an ordinary margin of 5.0%. Special gains were ¥2.2B (gain on sales of investment securities ¥2.1B, gain on sales of fixed assets ¥0.1B) and special losses were ¥1.3B (impairment losses ¥0.5B, business restructuring costs ¥0.5B, etc.), yielding a net positive contribution of ¥0.9B. Because the prior year included special gains of ¥17.6B (gain on sales of fixed assets ¥5.5B and negative goodwill ¥11.0B), profit before tax fell to ¥25.1B (YoY -33.4%). After income taxes of ¥7.8B (effective tax rate 31.0%) and non-controlling interests of ¥1.2B, Net Income attributable to owners of the parent was ¥16.2B (YoY -40.0%). The decline in final profit was mainly due to the loss of one-time items, while core earnings are on a growth trajectory.
[Profitability] Operating margin 4.1% (YoY +0.7pt), ordinary margin 5.0% (YoY +0.8pt), net margin 3.6% (YoY -2.5pt). The decline in net margin is primarily due to the reversal of prior-year special gains; ordinary-basis profitability shows improvement. ROE 5.0% (prior year 8.6%) fell reflecting the decrease in Net Income, while ROA (on an ordinary income basis) improved to 5.3% from 4.6% the prior year. Gross margin 37.6% reflects successful cost control. [Cash Quality] Operating Cash Flow (OCF) was ¥20.7B, 1.2x Net Income ¥17.3B, indicating good cash backing of profits. OCF/EBITDA ratio was 0.59x, low, as deterioration in working capital (Accounts receivable +¥5.8B, Inventory +¥4.6B, Accounts payable -¥11.4B) pressured cash generation. Depreciation ¥15.5B versus capital expenditures ¥8.2B (investment ratio 0.53x) shows restrained capex, indicating room for improvement in asset maintenance/renewal. [Investment Efficiency] Total asset turnover 1.05x (prior 1.05x), inventory turnover days 72 days (prior 69 days) showing slightly worse inventory efficiency. Fixed asset turnover 2.4x remains stable. Intangible assets ¥38.2B, including goodwill ¥10.9B and trademarks ¥18.2B, account for 8.3% of total assets, a healthy level. [Financial Soundness] Equity ratio 74.5% (prior 72.5%), current ratio 254%, quick ratio 195% — extremely robust. Interest-bearing debt totals ¥5.5B (short-term borrowings ¥4.0B and lease liabilities ¥1.5B), and cash and deposits are ¥103.0B, resulting in net cash of ¥97.5B. Debt/EBITDA 0.16x and interest coverage 86.5x (OCF / interest paid) indicate ample financial capacity. Retirement benefit obligations ¥10.9B are 3.2% of equity and manageable.
OCF was ¥20.7B, starting from profit before tax ¥25.1B and adding back non-cash expenses such as depreciation ¥15.5B and goodwill amortization ¥1.3B, adjusted for working capital changes (accounts receivable increase ¥5.8B, inventory increase ¥4.6B, accounts payable decrease ¥11.4B totaling a -¥21.8B drag) and corporate tax payments ¥6.2B. The OCF subtotal was ¥25.5B and remained solid, but the large decrease in accounts payable and inventory buildup ultimately constrained cash generation. Investing Cash Flow was -¥6.4B, driven by capital expenditures ¥8.2B, intangible asset investment ¥2.0B, and purchase of investment securities ¥0.3B, partially offset by sales of securities ¥3.9B and disposal of fixed assets ¥0.1B. M&A-related outflows of ¥46.8B are presumed to be settlements of balances recorded in prior periods. Financing Cash Flow was -¥12.7B, with dividends paid ¥9.3B, dividends to non-controlling interests ¥1.2B, long-term debt repayments ¥12.9B, and net decrease in short-term borrowings ¥1.5B as main items. Free Cash Flow was ¥14.3B (OCF ¥20.7B + Investing CF -¥6.4B), and after dividend payments cash and deposits increased by ¥2.3B to ¥103.0B, maintaining financial stability. Comprehensive income was ¥21.2B, exceeding Net Income ¥17.3B, mainly due to ¥3.2B unrealized gains on securities and ¥0.4B foreign currency translation adjustments in other comprehensive income.
Of Ordinary Income ¥24.2B, Operating Income ¥19.9B accounted for 82%, indicating a healthy earnings structure driven by core operations. Non-operating income ¥4.7B (1.0% of revenue) comprised dividend income ¥1.4B, interest income ¥0.2B, FX gains ¥0.7B, and equity-method gains ¥0.4B, within business characteristics. Net special items contributed +¥0.9B, but Net Income declined significantly due to the prior year’s large special gains of ¥17.6B. This period’s special gains of ¥2.2B (gain on sales of investment securities ¥2.1B, etc.) are one-off and have limited sustainability. The divergence between OCF and Net Income is +20% (OCF ¥20.7B / Net Income ¥17.3B), which is favorable; the accrual ratio (Net Income - OCF) / Total Assets is -1.0%, low, suggesting limited risk of accounting profit manipulation. Comprehensive income ¥21.2B exceeded Net Income ¥17.3B by +22.5%, explained by increased unrealized gains on securities and FX valuation gains. Goodwill amortization ¥1.3B is 3.8% of EBITDA and modest, limiting distortions in comparisons with IFRS-reporting peers. Given improvements at the ordinary income level and solid cash backing, the quality of earnings is judged to be good.
The full-year plan forecasts Revenue ¥520.0B (YoY +7.2%), Operating Income ¥25.0B (YoY +25.8%), Ordinary Income ¥27.0B (YoY +11.7%), and Net Income attributable to owners of the parent ¥18.0B (YoY +11.6%). Operating margin is expected to improve to 4.8% (+0.7pt), assuming continued gross margin improvement and SG&A efficiencies. The revenue growth target of +7.2% is an ambitious stretch relative to recent results (+0.8% this period), assuming volume increases from new product launches and strengthened promotions. Progress rates are Revenue 93.3%, Operating Income 79.6%, Ordinary Income 89.6%, Net Income 90.0%, implying profit concentration in the second half. Dividend guidance is annual ¥23.0 per share, with a ¥1.0 reduction in the year-end dividend; payout ratio versus forecast EPS ¥86.25 is 26.7%, conservative. Achieving the plan assumes normalization of inventory turnover and improved working capital efficiency, with recovery on advertising and SKU optimization being key.
Annual dividend is ¥44.0 per share (interim ¥22.0, year-end ¥22.0), maintained at prior-year levels. Payout ratio is 32.9% (prior 32.9%), demonstrating a commitment to maintain dividend levels despite lower Net Income. Total dividends amount to ¥9.3B, providing coverage of 1.54x relative to Free Cash Flow ¥14.3B. Net cash ¥97.5B and Debt/EBITDA 0.16x underpin dividend sustainability. There were no share buybacks (buyback amount ¥0), so shareholder returns are dividend-focused. Next fiscal year’s forecast dividend is annual ¥23.0, implying a lower payout ratio of 26.7% against forecast EPS ¥86.25, indicating retention of earnings for growth investments and maintaining financial stability. While dividend yield and Total Return Ratio are not explicitly provided, continued stable dividends and maintaining payout ratios within an appropriate range are the cornerstones of shareholder return policy.
Inventory Efficiency Deterioration Risk: Inventory turnover days increased to 72 days from 69 days the prior year, and inventory rose to ¥59.8B (+¥3.3B). Persistent inventory build-up could pressure gross margin through markdowns and write-offs and further reduce cash conversion (OCF/EBITDA 0.59x). Improving working capital efficiency is a precondition for achieving growth plans.
Working Capital Management Risk: Accounts payable decreased to ¥22.6B ( -¥11.4B), suggesting shortened payment terms. Meanwhile, accounts receivable increased to ¥71.7B (+¥5.8B) and accounts receivable turnover days remain flat at 54 days. The simultaneous reduction of payables and increases in receivables and inventory meant that the OCF subtotal of ¥25.5B declined to final OCF of ¥20.7B. Failure to optimize working capital will constrain Free Cash Flow and investment capacity.
Suppressed Investment Risk: Capital expenditures ¥8.2B are only 0.53x of depreciation ¥15.5B, below maintenance/replacement levels. This presents medium-term risks to production capacity, competitiveness, and efficiency due to aging assets; sustained improvement in operating margins requires appropriate capital investment. Intangible asset investment ¥2.0B also fell from ¥3.3B the prior year, warranting attention to adequacy of brand and technology investments.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 4.1% | 7.8% (4.6%–12.3%) | -3.7pt |
| Net Margin | 3.6% | 5.2% (2.3%–8.2%) | -1.6pt |
Profitability is below industry median, indicating substantial room to improve operating efficiency and final profit margin.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 0.8% | 3.7% (-0.4%–9.3%) | -2.9pt |
Revenue growth is below the industry median; accelerating top-line expansion is a challenge.
※Source: Company compilation based on public financial statements
Gap Between Improving Core Earnings and Final Profit Decline: Operating Income +19.8% and Ordinary Income +16.0% indicate expanding core earnings, driven by gross margin improvement and SG&A efficiencies. The -40.0% decline in final profit is mainly due to the reversal of prior-year special gains; ordinary earning power is steadily improving. The company targets further improvement to a 4.8% operating margin next year, suggesting potential structural earnings improvement.
Deterioration in Working Capital Efficiency and Cash Generation Challenges: OCF ¥20.7B is 1.2x Net Income and favorable, but OCF/EBITDA 0.59x is low. Working capital deterioration of -¥21.8B driven by increases in receivables and inventory and decreases in payables is the chief cause. Continued inventory inefficiency (72 days) would pressure Free Cash Flow and investment capacity. Compression of inventories and optimizing payable terms are keys to achieving next year’s plan and improving ROE.
Strong Financial Base and Sustainability of Shareholder Returns: Equity ratio 74.5%, net cash ¥97.5B, and Debt/EBITDA 0.16x indicate extremely high financial safety. Payout ratio 32.9% and FCF coverage 1.54x support dividend sustainability. Next year’s forecast dividend ¥23.0 with a payout ratio of 26.7% is conservative, allowing retention for growth investments and financial stability. If investment levels recover (raising capex/depreciation ratio of 0.53x) while improving working capital, sustainable expansion of ROE and cash generation is expected.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are compiled by the Company based on publicly available financial statements and are provided for reference only. Investment decisions are your own responsibility; consult a professional advisor as needed.