| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥402.4B | ¥406.1B | -0.9% |
| Operating Income / Operating Profit | ¥48.4B | ¥46.2B | +4.7% |
| Ordinary Income | ¥51.0B | ¥48.5B | +5.1% |
| Net Income / Net Profit | ¥42.5B | ¥26.1B | +62.9% |
| ROE | 11.0% | 7.6% | - |
For the full year ended March 2026, Revenue / Net Sales were ¥402.4B (YoY -¥3.7B -0.9%), a slight decline, while Operating Income was ¥48.4B (YoY +¥2.2B +4.7%), Ordinary Income was ¥51.0B (YoY +¥2.5B +5.1%), and Net Income was ¥42.5B (YoY +¥16.4B +62.9%), achieving profit growth. The profit increase despite lower sales was supported by an improvement in gross margin to 31.1% (prior year 30.9%) and containment of SG&A to ¥7.69B, lifting the operating margin to 12.0% (up +0.6pt from 11.4%). The large increase in Net Income was mainly due to recording ¥0.51B of gain on sale of investment securities as extraordinary income and the reversal from prior-year extraordinary losses of ¥0.71B. Operating Cash Flow was ¥5.74B (YoY -16.6%) down, but Free Cash Flow secured ¥3.84B, enabling shareholder returns of ¥1.26B in dividends and ¥0.83B in share buybacks.
[Revenue] Revenue of ¥402.4B was down 0.9% YoY. By segment, the core Sports Goods declined to ¥128.2B (-4.7%), Industrial Materials was slightly down at ¥231.8B (-0.9%), while Coated Fabrics increased to ¥38.9B (+14.0%) providing support. The decline in Sports Goods sales was primarily driven by lower external customer sales from ¥135.8B to ¥128.2B, indicating weakening demand momentum. Industrial Materials, which includes precision rubber parts for industrial use and electrical insulating materials, remained in a flat range. Coated Fabrics maintained a growth trend due to increased demand for various rubber-coated fabrics.
[Profitability] Gross margin improved to 31.1% (prior year 30.9%, +0.2pt), with Cost of Goods Sold contained at ¥277.1B. SG&A was ¥76.9B, reduced by ¥2.3B from ¥79.2B the prior year, and the SG&A ratio improved to 19.1% (prior year 19.5%, -0.4pt). Cuts in advertising expenses to ¥0.86B (from ¥0.91B) and restraint in salaries and allowances to ¥2.71B (from ¥2.79B) contributed, resulting in Operating Income of ¥48.4B (+4.7%) and an Operating Income margin of 12.0%. Non-operating income included ¥0.14B in dividend income and ¥0.07B in interest income, totaling ¥0.45B; net of ¥0.18B in non-operating expenses, Ordinary Income was ¥51.0B (+5.1%). Extraordinary income included ¥0.51B gain on sale of investment securities, and after deducting extraordinary losses of ¥0.04B (impairment losses ¥0.04B, etc.), Income Before Income Taxes rose significantly to ¥52.3B (+10.5%). After corporate taxes of ¥1.25B (effective tax rate 23.8%), Net Income was ¥42.5B (+62.9%). The prior year included extraordinary losses of ¥0.71B, so the improvement in extraordinary items was the primary driver of the large increase in Net Income. In conclusion, despite declining sales, cost containment and one-off gains led to higher profits (slight revenue decline with operating profit growth, and significant increase in bottom-line profit).
Industrial Materials recorded Revenue of ¥231.8B (prior year ¥233.9B, -0.9%) with a sharp recovery in Operating Income to ¥7.3B (prior year ¥2.0B, +264.9%). Operating margin improved to 3.1% (prior year 0.9%, +2.2pt), driven by improved profitability in precision rubber parts for industrial use and electrical insulating materials. Sports Goods posted Revenue of ¥128.2B (prior year ¥134.6B, -4.7%) and Operating Income of ¥47.0B (prior year ¥52.9B, -11.1%), a decline in both sales and profits. Although the Operating Income margin remained high at 36.7%, it fell from 39.3% (-2.6pt), and the slowing revenue momentum in this high-margin business constrained overall corporate profit growth. Coated Fabrics achieved Revenue of ¥38.9B (prior year ¥34.1B, +14.0%) and Operating Income of ¥1.7B (prior year ¥0.5B, +224.7%), with the Operating Income margin rising to 4.2% (prior year 1.5%, +2.7pt). Increased demand for various processed goods and rubber-coated fabrics and improved profitability contributed to a better portfolio balance.
[Profitability] Operating Income margin 12.0% (prior year 11.4%, +0.6pt), Ordinary Income margin 12.7% (prior year 12.0%, +0.7pt), Net Income margin 10.6% (prior year 6.4%, +4.2pt) — all stages showed margin improvement. ROE was 11.0% (prior year 10.8%, +0.2pt), mainly due to the expansion of Net Income margin. ROA (on Ordinary Income basis) is 10.1%, indicating stable profitability. Gross margin of 31.1% is high for a manufacturer, aided by the high-margin Sports Goods business. [Cash Quality] Operating Cash Flow was ¥5.74B versus Net Income ¥4.25B, giving an OCF/Net Income multiple of 1.35x and an accrual ratio of -3.7%, indicating cash-driven profit generation. With Depreciation of ¥1.54B versus Capital Expenditure of ¥1.68B, CapEx/Depreciation is 1.09x, at a maintenance/reinvestment level. Free Cash Flow was ¥3.84B, covering 90% of Net Income and sufficient to fund dividends and buybacks. [Investment Efficiency] Total Asset Turnover was 0.79x (Revenue ¥402.4B ÷ Total Assets ¥506.9B), and Inventory Turnover was 11.7x (COGS ¥277.1B ÷ average inventories ¥34.4B), showing stable turnover. R&D expense was ¥0.51B, 1.3% of sales, below the manufacturing industry average. [Financial Soundness] Equity Ratio was 76.2% (prior year 72.0%, +4.2pt), Current Ratio 478%, and Quick Ratio 423%, ensuring very high safety. Interest-bearing debt consisted of long-term borrowings of ¥2.00B (repaid from ¥2.80B prior year), and Debt/EBITDA was 0.31x, indicating low leverage. With Cash and Deposits of ¥11.88B versus short-term interest-bearing debt of ¥0.80B, the company is in a net cash position, and Interest Coverage is Operating Income ¥48.4B ÷ Interest Expense ¥0.5B ≈ 95x, meaning negligible interest burden.
Operating Cash Flow was ¥5.74B, down -16.6% from ¥6.88B the prior year, but maintained a healthy level at 1.10x of Income Before Income Taxes ¥5.23B. Depreciation ¥1.54B, decrease in inventories ¥1.17B, and decrease in trade receivables ¥0.31B supported cash flow, while decreases in trade payables ¥0.80B and corporate tax payments ¥1.27B constrained it. Operating CF before working capital changes totaled ¥6.68B—inventory compression and collection of receivables progressed, but the decrease in payables offset some benefits. Investing Cash Flow was -¥1.90B, mainly due to Capital Expenditure ¥1.68B. Compared to Depreciation ¥1.54B, this indicates maintenance-level investment with limited growth investment. There was net cash recovery of ¥0.47B from selling ¥0.57B of investment securities and purchasing ¥0.10B. Financing Cash Flow was -¥2.90B, mainly from repayment of long-term borrowings ¥0.80B, dividend payments ¥1.26B, and share buybacks ¥0.83B. Free Cash Flow, Operating CF ¥5.74B plus Investing CF -¥1.90B, totaled ¥3.84B, sufficiently covering dividends ¥1.26B and buybacks ¥0.83B (total ¥2.09B), and increasing cash balance to ¥11.88B.
Of the Net Income ¥4.25B, Operating Income ¥4.84B is the recurring earnings source, with Non-operating income ¥0.45B (dividend income ¥0.14B, interest income ¥0.07B, etc.) adding financial income. Extraordinary income included a ¥0.51B gain on sale of investment securities, meaning temporary factors accounted for about 12% of Net Income. The prior year had extraordinary losses of ¥0.71B, so year-on-year fluctuations in extraordinary items were the primary cause of the large YoY Net Income increase (+62.9%). Comprehensive Income was ¥6.15B, ¥1.90B higher than Net Income ¥4.25B; Other Comprehensive Income contributed via ¥1.81B in valuation differences on available-for-sale securities, ¥0.18B in foreign currency translation adjustments, and ¥0.17B in adjustments related to retirement benefits. The recognition of unrealized gains on investment securities boosted Comprehensive Income, increasing sensitivity to market valuation changes—this warrants attention. Operating CF was ¥5.74B, 1.35x Net Income ¥4.25B, and the accrual ratio was -3.7%, indicating a cash-driven earnings structure and high quality of earnings. In working capital, decreases in inventories ¥1.17B and trade receivables ¥0.31B supported CF, but a decrease in trade payables ¥0.80B offset these gains, indicating room for improvement in working capital management.
Full-year guidance projected Revenue ¥408.0B (YoY +1.4%), Operating Income ¥54.0B (+11.6%), Ordinary Income ¥55.0B (+7.8%), and Net Income ¥38.0B. Actual Revenue ¥402.4B was ¥5.6B (-1.4%) below forecast, and Operating Income ¥48.4B was ¥5.6B (-10.4%) below forecast. Conversely, Ordinary Income ¥51.0B was ¥4.0B (-7.3%) below forecast, while Net Income ¥42.5B exceeded forecast by ¥4.5B (+11.8%). The shortfall in Operating Income is likely due to the Sales and profit decline in Sports Goods; the Net Income beat was driven by one-off items such as the ¥0.51B gain on sale of investment securities and tax outcomes within expected ranges. Actual EPS was ¥208.61 versus forecast ¥201.93, and the dividend forecast of ¥43.0 per share aligns with an annual plan of ¥76 (interim ¥33 + year-end ¥43). Achieving next fiscal year’s targets will depend on recovery in Sports Goods demand, sustained profitability improvement in Industrial Materials, and improvements in working capital efficiency.
Annual dividend is ¥76 (interim ¥33 + year-end ¥43). The payout ratio to Net Income ¥4.25B (EPS ¥208.61) is 36.4%. Total dividends are estimated at approximately ¥1.45B (based on shares outstanding 20,075 thousand shares - treasury shares 1,257 thousand shares = 18,818 thousand shares), and coverage of Free Cash Flow ¥3.84B is 2.65x, indicating ample capacity. Share buybacks amounted to ¥0.83B, and combined returns (dividends + buybacks) totaled approximately ¥2.28B, representing a Total Return Ratio of about 59% relative to FCF. Given the Equity Ratio of 76.2%, net cash position, and low leverage, dividend sustainability is assessed as high. The prior year dividend was ¥32, and the large increase to ¥76 this year reflects improved earnings and a strengthened shareholder return stance. A payout ratio of 36.4% is in line with manufacturing peers, and with FCF coverage and strong equity, continued stable dividends are expected.
Segment concentration and risk of slowdown in high-margin business: Operating Income of ¥47.0B in Sports Goods accounts for 97% of consolidated Operating Income ¥48.4B, meaning declines in this segment (-11.1%) materially affect corporate earnings. Although Industrial Materials provided strong recovery this year, continued weakness in Sports Goods demand would exert downward pressure on consolidated profits. Restoring Sports Goods sales while maintaining the high 36.7% operating margin is a key challenge for next fiscal year.
Constraint on cash generation from delayed working capital efficiency improvements: With inventories ¥3.44B and trade receivables ¥6.69B versus trade payables ¥1.67B, working capital is tying up funds. DSO (days sales outstanding) is about 61 days, DIO (days inventory outstanding) about 45 days, and DPO (days payable outstanding) about 22 days, resulting in CCC of about 84 days—lengthy. If inventory compression and receivables collection do not progress, scope for expanding Operating CF will be limited, constraining growth investment and additional shareholder returns.
Valuation fluctuation risk of investment securities and volatility in Comprehensive Income: Increase in investment securities to ¥4.56B (9.0% of total assets) has amplified the impact of market movements on Comprehensive Income and equity. This period saw a positive ¥1.81B valuation difference on securities, but in adverse market conditions valuation losses or disposal losses could occur, undermining Comprehensive Income stability. Transparency on holding objectives and disposal policy will be a key investor consideration.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Income margin | 12.0% | 7.8% (4.6%–12.3%) | +4.3pt |
| Net Income margin | 10.5% | 5.2% (2.3%–8.2%) | +5.4pt |
Operating Income margin 12.0% exceeds the manufacturing median 7.8% by +4.3pt, with the high-margin Sports Goods structure contributing to an upper-tier position.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue growth (YoY) | -0.9% | 3.7% (-0.4%–9.3%) | -4.6pt |
Revenue growth -0.9% lags the industry median +3.7%, with declines in Sports Goods suppressing overall growth.
※ Source: Company compilation
The fact that Operating Income margin improved to 12.0% and ROE was maintained at 11.0% despite declining sales demonstrates the resilience of the earnings base. Industrial Materials’ Operating Income margin recovered sharply from 0.9% to 3.1%, and Coated Fabrics achieved revenue and profit growth, improving portfolio balance. Progress in revenue diversification to cover the decline in Sports Goods supports medium-term earnings stability.
Strong cash generation with Operating CF ¥5.74B and FCF ¥3.84B funded dividends ¥1.26B and buybacks ¥0.83B. With Equity Ratio 76.2%, net cash position, and Debt/EBITDA 0.31x, the financial structure is very healthy and dividend sustainability is high. Dividend ¥76 (payout ratio 36.4%), and FCF coverage 2.65x support stable shareholder returns.
Increase in investment securities to ¥4.56B and recognition of valuation differences on securities ¥1.81B caused Comprehensive Income ¥6.15B to materially exceed Net Income ¥4.25B. While this is favorable in rising markets, valuation losses in down markets could increase volatility in Comprehensive Income and equity. Working capital saw inventory and receivables reduction, but a decline in payables offset improvements, leaving room to improve CCC. If inventory turnover and collection periods are shortened, there is significant upside to Operating CF.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement 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 statements. Investment decisions are your responsibility; consult a professional advisor as appropriate.