| Metric | Current Period | Prior-Year Period | YoY |
|---|---|---|---|
| Revenue | ¥21.36B | ¥18.38B | +16.2% |
| Operating Income | ¥1.18B | ¥0.45B | +164.0% |
| Ordinary Income | ¥1.53B | ¥0.38B | +306.4% |
| Net Income | ¥1.02B | ¥0.25B | +315.4% |
| ROE | 2.3% | 0.6% | - |
FY2027 Q1 posted increases in both revenue and earnings, with profit rising sharply year on year due to an improvement in gross margin and operating leverage. Revenue was ¥21.36B (¥18.38B in the prior-year period, +16.2%), while operating income was ¥1.18B (¥0.45B in the prior-year period, +164.0%). Ordinary income was ¥1.53B (+306.4%), and net income was ¥1.02B (+315.4%), with earnings growth substantially exceeding revenue growth. In addition to the improvement in gross margin (22.4%, +0.6pt year on year), non-operating income, including a ¥0.20B foreign exchange gain, provided an additional boost. Accordingly, it should be noted that growth at the ordinary income level was particularly pronounced.
【Revenue】Revenue increased 16.2% year on year to ¥21.36B. By segment, the First Business Division generated ¥13.49B (+21.4% year on year; 63.2% of total revenue), while the Second Business Division generated ¥6.59B (+20.0% year on year; 30.9% of total revenue), with the two core divisions driving growth. In contrast, the Shoes BU continued to experience a decline in revenue, recording ¥1.56B (-21.4% year on year; 7.3% of total revenue).
【Profitability】Operating income was ¥1.18B (+164.0% year on year), and the operating margin improved by +3.1pt year on year to 5.5%. In addition to a gross margin of 22.4% (+0.6pt year on year), selling, general and administrative expenses remained at ¥3.62B, growing at a slower pace than revenue and resulting in operating leverage. Ordinary income was ¥1.53B (+306.4% year on year), with ¥0.44B in non-operating income, including a ¥0.20B foreign exchange gain, providing a substantial uplift from operating income. Net income was ¥1.02B (+315.4% year on year). Extraordinary items were limited to an extraordinary loss of ¥0.02B, and the variance from profit before tax was within the normal range due to income taxes and other taxes (an effective tax rate of approximately 32.3%). The company achieved increases in both revenue and earnings, with the key feature being that a temporary non-operating factor, namely the foreign exchange gain, boosted growth at the ordinary income level.
The First Business Division drove overall performance, with revenue of ¥13.49B (+21.4% year on year), operating income of ¥0.97B (+66.2% year on year), and a margin of 7.2%, reflecting increases in both revenue and earnings. The Second Business Division recorded revenue of ¥6.59B (+20.0% year on year), operating income of ¥0.88B (+70.4% year on year), and a margin of 13.3%, representing the highest profitability among the three divisions. The Shoes BU continued to experience a revenue decline, with revenue of ¥1.56B (-21.4% year on year), but its operating loss narrowed to ¥0.07B (a ¥0.09B loss in the prior-year period; the loss narrowed by +29.5%). Revenue composition was 63.2% for the First Business Division, 30.9% for the Second Business Division, and 7.3% for the Shoes BU. The presence of the highly profitable Second Business Division is supporting the overall portfolio margin.
【Profitability】The operating margin improved by +3.1pt to 5.5%, compared with 2.4% in the prior-year period, while the net margin also rose significantly to 4.8% from 1.3% in the prior-year period. Gross margin was 22.4%, an improvement of +0.6pt year on year.【Cash Quality】Non-operating income includes a ¥0.20B foreign exchange gain, which is one factor behind ordinary income growth (+306.4%) exceeding operating income growth (+164.0%). Extraordinary items consisted only of an extraordinary loss of ¥0.02B, limiting the impact on net income.【Investment Efficiency】ROE was 2.3%. Basic EPS was ¥74.83 (¥18.05 in the prior-year period, +314.6%), while BPS was ¥3,252.06 (¥3,167.21 in the prior-year period).【Financial Soundness】The equity ratio remained high at 51.3% (51.8% in the prior-year period). Total assets were ¥86.57B and net assets were ¥44.44B, indicating a stable capital base.
As detailed disclosure of the statement of cash flows is not available for this earnings release, funding trends are analyzed based on balance sheet movements. Cash and deposits remained broadly flat at ¥9.96B (¥9.75B in the prior-year period), while trade receivables and notes receivable totaled ¥13.83B and inventories totaled ¥9.11B, indicating an expansion in asset levels and an increase in working capital associated with business expansion. Trade payables and notes payable increased substantially to ¥9.99B (¥7.81B in the prior-year period, +27.9%), suggesting that supplier credit is being utilized to maintain funding efficiency. Property, plant and equipment increased slightly from the prior year to ¥19.43B, suggesting that investment, including construction in progress, is continuing. The pace at which inventories and receivables increase relative to the pace of growth in trade payables will be an important determinant of future funding efficiency.
Recurring earnings power is represented by operating income of ¥1.18B, with an operating margin of 5.5%. Structural improvement driven by gross margin expansion and control of selling, general and administrative expenses has been confirmed. Meanwhile, foreign exchange gains accounted for ¥0.20B of the ¥0.44B in non-operating income and were the primary reason ordinary income growth (+306.4%) exceeded operating income growth (+164.0%). Foreign exchange gains are susceptible to market fluctuations and are strongly temporary in nature. Extraordinary items were limited to an extraordinary gain of ¥0.00B and an extraordinary loss of ¥0.02B (loss on disposal of fixed assets), resulting in a limited distortion of net income. The effective tax rate was approximately 32.3% (¥0.49B in income taxes and other taxes / ¥1.51B in profit before tax), broadly within the normal range, with no unusual deviation in the conversion from profit before tax to net income. Comprehensive income was ¥1.71B, exceeding net income of ¥1.02B, largely due to a ¥0.64B gain on valuation differences of securities. Changes in the value of non-operating assets thus provided a significant boost to comprehensive income.
Progress against the full-year forecast was 25.9% for revenue, 53.4% for operating income, 76.4% for ordinary income, and 46.5% for net income (net income is based on net income attributable to owners of the parent). Progress on the earnings front is substantially ahead of the standard quarterly pace of approximately 25%. In particular, the high progress rate for ordinary income reflects the significant contribution from the foreign exchange gain recorded in Q1. The company has maintained its full-year forecasts of operating income of ¥2.20B (-26.0% year on year) and ordinary income of ¥2.00B (-49.0% year on year), indicating a conservative plan that may incorporate normalization of foreign exchange effects and higher costs toward the second half of the fiscal year. The company revised its earnings and dividend forecasts in conjunction with this quarterly earnings release.
The company’s published full-year dividend forecast is ¥50.00 per share. Based on an average number of shares outstanding during the period of approximately 13.666 million shares, total annual dividends are estimated at approximately ¥0.68B, resulting in a payout ratio of approximately 31% against the full-year net income forecast of ¥2.20B (based on net income attributable to owners of the parent). The dividend forecast was revised in conjunction with this quarterly earnings release. As data on share buybacks has not been disclosed, this report evaluates shareholder returns based solely on the dividend payout ratio.
Foreign Exchange Sensitivity: In Q1, a ¥0.20B foreign exchange gain boosted ordinary income and accounted for approximately 45% of non-operating income of ¥0.44B. If this effect reverses, the growth rate of ordinary income may slow from its current level.
Expansion of Working Capital: Trade receivables and notes receivable totaled ¥13.83B, while inventories totaled ¥9.11B, indicating an expansion in asset levels. Trade payables and notes payable also increased to ¥9.99B (+27.9% year on year). With asset and liability growth exceeding revenue growth (+16.2%), changes in funding efficiency must be monitored.
Segment Profitability Differences: The Shoes BU continued to operate at a loss, with revenue of ¥1.56B (-21.4% year on year) and an operating loss of ¥0.07B. Although its impact on overall earnings is limited, the pace at which the loss narrows will affect the future earnings structure.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.5% | 8.7% (4.2%–14.2%) | -3.2pt |
| Net Margin | 4.8% | 7.0% (3.2%–10.6%) | -2.3pt |
The company’s profitability indicators are below the industry median and fall within the lower range of the IQR.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | 16.2% | 6.2% (-1.1%–14.6%) | +10.0pt |
The revenue growth rate substantially exceeds the industry median and represents strong growth above the upper bound of the IQR.
※Source: Company analysis
The increase in both revenue and earnings reflects the coexistence of structural improvement at the operating level, driven by gross margin expansion and control of selling, general and administrative expenses (a +3.1pt improvement in the operating margin), and a boost at the ordinary income level from the temporary factor of foreign exchange gains. These two factors should be distinguished when evaluating the high progress against the full-year forecast.
Trade receivables and inventories are also increasing alongside revenue growth, while the increase in trade payables (+27.9%) appears to be offsetting this expansion. How working capital movements track revenue growth in future quarters will be an important area for monitoring funding efficiency.
By segment, the Second Business Division’s 13.3% margin is supporting overall profitability, while the continuation of the narrowing of the Shoes BU’s operating loss (+29.5% improvement) is a key structural factor that will influence portfolio-wide margin trends.
This is a mechanically calculated reference range based solely on publicly disclosed data using a residual income model (Ohlson-type model with an explicit five-year fade period). It is not a forecast of the market price or a recommendation of any specific investment action.
| Scenario | Theoretical Stock Price |
|---|---|
| bear | ¥2,814 |
| base | ¥2,865 |
| bull | ¥2,886 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share (BPS) | ¥3,252 |
| Adjusted Forecast EPS | ¥177.1 |
| Cost of Equity r | 9.77% (10-year JGB 2.77% + equity risk premium 6.00% + size premium 1.00%) |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 31.1% |
| Forecast EPS Confidence Adjustment | ×1.100 (based on progress ahead of the full-year forecast) |
| implied PBR / PER | 0.88x / 16.2x |
Sensitivity: ¥2,786–¥2,948 at ±1% for the cost of equity, and ¥2,852–¥2,873 at ±0.1 for ω.
Notes:
(Calculation model: Residual income model / Interest rate reference month: 2026-07 / This value does not forecast or guarantee the future stock price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release 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, and, where necessary, after consulting with a professional advisor.
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These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.