yutori,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥6.26B
• Operating Income: ¥421M
• Net Income: ¥214M
• EPS: ¥16.04

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Verdict: Strong top-line and operating turnaround, but profitability at the bottom line remains thin and cash conversion is negative, with leverage elevated. Revenue reached 62.60, up 265.2% YoY, supported by a high gross profit of 39.59 and a gross margin of 63.2%. Operating income surged to 4.21 (+1,187.3% YoY), translating to an operating margin of 6.7%. Ordinary income rose to 3.93 (+1,595.1% YoY), while net income increased to 0.75 (+27.4% YoY), implying a net margin of 1.2%. Using the provided YoY rates, the prior-year revenue is estimated at 17.14 and prior operating income at roughly 0.33, indicating operating margin expansion of approximately 481 bps YoY (from ~1.9% to ~6.7%). Conversely, estimated net margin likely compressed by about 224 bps (from ~3.4% to 1.2%) as revenue scaled faster than bottom-line profit due to higher expenses and a 43.4% effective tax rate. EBITDA was 5.25 (8.4% margin), with interest coverage at 13.96x indicating manageable interest burden despite a higher D/E of 2.72x. Cash quality is a concern: operating cash flow was -1.20 versus net income of 0.75 (OCF/NI -1.60x), and free cash flow is estimated at -4.01 after capex of 2.81. Liquidity is adequate with a current ratio of 139.1%, backed by cash and deposits of 15.23, but reliance on short-term loans (17.02) elevates refinancing sensitivity. Balance sheet shows sizable intangibles (15.85) and goodwill (8.18), which raise potential future impairment risk if growth underperforms. ROE is 3.2% per DuPont (1.2% net margin × 0.722 asset turnover × 3.72x leverage), restrained by slim net margins. ROIC at 5.4% trails typical 7–8% targets, signaling value-creation headroom. EPS (basic) was 16.04 JPY and BVPS is 495.67 JPY, implying modest capital formation given low ROE. Overall, the company executed strong revenue scaling and operating leverage, but must improve cash conversion, reduce leverage, and lift ROIC above cost of capital. Forward-looking, margin discipline, working capital management, and deleveraging are critical to sustain growth without equity dilution or refinancing stress.

Profitability Analysis

ROE decomposition (DuPont): ROE 3.2% = Net Profit Margin 1.2% × Asset Turnover 0.722 × Financial Leverage 3.72x. The largest drag is the net margin at 1.2%, which holds back returns despite reasonable turnover and high leverage. Operating margin improved to 6.7%, up an estimated ~481 bps YoY (prior ~1.9%), driven by scale benefits and a high gross margin of 63.2%, but net margin fell ~224 bps YoY due to higher non-operating costs and a 43.4% effective tax rate. Business drivers: rapid top-line growth lifted gross profit, but SG&A at 35.37 (56.5% of sales) absorbed much of the contribution, and interest/tax headwinds limited net profitability. Sustainability: The gross margin profile looks solid, but sustaining operating leverage requires SG&A growth to trail revenue; current SG&A intensity suggests a need for cost discipline. Financial leverage (D/E 2.72x) is propping up ROE; with deleveraging likely a goal, ROE could weaken unless margins rise. Concerning trends: OCF/NI of -1.60x and negative FCF undermine the quality of earnings; also, SG&A as a percentage of revenue is high, indicating limited operating buffer if growth slows.

Growth Assessment

Revenue growth of 265.2% YoY to 62.60 indicates exceptional scaling, likely from brand traction and/or channel expansion. Operating income growth (+1,187.3% YoY) signals strong operating leverage off a small base. However, net income grew only 27.4% YoY to 0.75, highlighting a widening gap between operating gains and after-tax profitability. Gross margin at 63.2% supports a scalable unit economics profile, but SG&A at 56.5% of sales limits drop-through to operating profit. The effective tax rate of 43.4% weighed on net, implying either non-deductible items or jurisdictional mix; normalization could be an upside lever. Interest expense of 0.30 remains manageable today (13.96x coverage), but leverage at 2.72x D/E narrows financial flexibility. Outlook: If revenue growth moderates, maintaining a 6–7% operating margin will require SG&A ratio reduction and tight cost control. ROIC at 5.4% remains below target thresholds (7–8%), suggesting incremental improvements via margin lift and more efficient capital deployment are needed to sustain value creation. Near term, focus should be on working capital discipline to convert growth into cash and to reduce financing dependence.

Financial Health

Liquidity: Current ratio 139.1% and quick ratio 139.1% indicate adequate near-term coverage; working capital stands at 15.98. Solvency: D/E is 2.72x (warning >2.0), with short-term loans at 17.02 and long-term loans at 19.31 (total interest-bearing debt approx. 36.33). Interest coverage at 13.96x is comfortable, but debt/EBITDA at 6.93x is elevated for a non-infrastructure issuer. Maturity mismatch: Current assets 56.87 cover current liabilities 40.88, but reliance on short-term borrowings increases refinancing risk if cash conversion stays weak. Asset quality: Intangible assets (15.85) and goodwill (8.18) comprise a meaningful portion of total assets (29.85 noncurrent), introducing impairment risk if performance underwhelms. No off-balance sheet obligations are disclosed in the data provided.

Cash Flow Quality

Earnings quality is weak this quarter: OCF/Net Income is -1.60x (<0.8 threshold), with OCF of -1.20 against NI of 0.75. Free cash flow is estimated at -4.01 (OCF -1.20 minus capex 2.81), indicating external financing was needed to fund operations and investments. Financing CF of 12.77 suggests incremental debt funding (and minor buybacks of 0.01), consistent with rising leverage. Working capital dynamics likely drove negative OCF (e.g., receivables or inventory build), though inventories were unreported; payables (7.84) growth details are also unavailable. No clear signs of working capital manipulation can be identified from available figures, but persistent negative OCF alongside rapid revenue growth warrants scrutiny of receivable collection and procurement terms. Sustainability: Without improvement in OCF conversion, dividend capacity (if any) and growth investments will depend on financing, heightening risk in a tighter credit environment.

Dividend Sustainability

Dividend information (DPS, payout) is unreported. With NI at 0.75 and estimated FCF at -4.01, internal funding for dividends would be poor this period. Given D/E of 2.72x and negative OCF, a conservative stance on shareholder returns would be prudent until cash generation normalizes. Policy outlook cannot be assessed from the data, but improving OCF, lowering capex intensity relative to cash generation, and deleveraging would be prerequisites for a sustainable payout.

Risk Assessment

Business Risks:

• Execution risk in scaling operations while reducing SG&A intensity (SG&A at 56.5% of sales).
• Demand volatility in consumer/apparel/EC channels leading to revenue swings and markdown risk.
• High effective tax rate (43.4%) suppressing net margins; uncertainty on normalization timing.
• Intangible and goodwill concentration (combined 24.03 of assets) increasing impairment risk.

Financial Risks:

• High leverage (D/E 2.72x) and elevated Debt/EBITDA (6.93x) increasing sensitivity to rate and credit conditions.
• Negative operating cash flow and FCF (-1.20 and -4.01) necessitating external financing.
• Refinancing risk due to sizeable short-term loans (17.02) relative to cash (15.23).
• Potential covenant pressure if profitability softens and coverage declines.

Key Concerns:

• OCF/NI at -1.60x indicates low earnings quality this period.
• Net margin compressed to 1.2% despite strong operating improvement; tax and below-the-line items weigh.
• ROIC at 5.4% below 7–8% benchmarks, risking subpar value creation.
• Data gaps (inventory, dividend policy, investing CF details) limit full assessment of capital allocation and working capital health.

Investment Implications

Key Takeaways:

• Exceptional revenue growth (+265.2% YoY) with strong gross margin (63.2%).
• Operating margin expanded an estimated ~481 bps YoY to 6.7%, but net margin is only 1.2% (estimated ~224 bps compression YoY).
• Cash conversion is weak (OCF/NI -1.60x; FCF ~-4.01), increasing reliance on financing.
• Leverage is high (D/E 2.72x; Debt/EBITDA 6.93x) though current interest coverage is solid (13.96x).
• ROE 3.2% held back by thin net margins; ROIC 5.4% below target range.

Metrics to Watch:

• OCF conversion and FCF trend (quarterly and trailing 12 months).
• SG&A ratio and operating margin sustainability as growth normalizes.
• Effective tax rate trajectory and drivers.
• Debt mix and maturities (short-term vs long-term), interest coverage, and D/EBITDA.
• ROIC improvement relative to 7–8% benchmark.
• Receivables collection and any disclosure on inventory days (when available).

Relative Positioning: Versus small-cap consumer/EC peers, the company demonstrates strong growth and gross margin but lags on cash generation and capital efficiency, with a more leveraged balance sheet that heightens execution and refinancing risks.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
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