| Metric | Current Period | Prior-Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥447.7B | ¥443.1B | +1.0% |
| Operating Income / Operating Profit | ¥33.1B | ¥22.4B | +48.1% |
| Ordinary Income | ¥33.0B | ¥22.8B | +44.8% |
| Net Income / Net Profit | ¥22.0B | ¥17.7B | +23.8% |
| ROE | 9.3% | 7.9% | - |
The fiscal year ended March 2026 (FY2026) results were: Revenue ¥447.7B (YoY +¥4.6B +1.0%), Operating Income ¥33.1B (YoY +¥10.8B +48.1%), Ordinary Income ¥33.0B (YoY +¥10.2B +44.8%), and Net Income attributable to owners of the parent ¥22.0B (YoY +¥4.3B +23.8%). While revenue rose only slightly, the company achieved substantial profit growth, with an Operating Income margin improving to 7.4% (from 5.1% a year earlier, +2.3pt) and a Net Income margin rising to 4.9% (from 4.0% a year earlier, +0.9pt). Gross margin improved to 39.3% (+1.2pt) and SG&A ratio declined to 31.9% (-1.2pt), highlighting qualitative improvement in the profit structure. By segment, Sekaikan (sales mix 61.9%) led growth with +9.3% revenue, and GirlsTrend (Operating Income ¥35.9B, margin 24.9%) delivered high profitability, boosting consolidated margins. Conversely, FURYUNew continued in the red with revenue -35.6% and an Operating loss of ¥4.5B.
[Revenue] Revenue was ¥447.7B (+1.0%), a modest increase. By segment, Sekaikan recorded ¥277.1B (+9.3%), solidifying its position as the core business, with licensed-IP-based plush and figure planning for amusement facilities performing steadily. GirlsTrend posted ¥143.9B (-2.9%) as a slight decline, but demand related to photo sticker booths remained resilient. FURYUNew fell sharply to ¥26.7B (-35.6%), affected by a gap in new titles for home game software and anime projects. By geography, domestic sales remained dominant at 87.5% (¥391.9B) and overseas 12.5% (¥55.8B). Contract liabilities (advance receipts) declined to ¥6.5B from ¥8.8B a year earlier, sending a somewhat weaker short-term demand signal.
[Profitability] Operating Income rose sharply to ¥33.1B (+48.1%). Gross margin improved to 39.3% (from 38.2% the prior year, +1.2pt) and SG&A ratio fell to 31.9% (from 33.1% the prior year, -1.2pt), resulting in an Operating Income margin of 7.4% (from 5.1%, +2.3pt). By segment, Sekaikan Operating Income was ¥23.4B (+32.1%, margin 8.4%) and GirlsTrend was ¥35.9B (+14.0%, margin 24.9%), with both leading profit growth. FURYUNew continued to struggle with an Operating loss of ¥4.5B (worsening from a ¥4.3B loss the prior year). Non-operating income and expenses were minor (non-operating income ¥0.2B, non-operating expenses ¥0.3B), resulting in Ordinary Income of ¥33.0B (+44.8%). Extraordinary items amounted to a net loss of ¥1.2B (extraordinary income ¥0.03B, extraordinary loss ¥1.2B), including impairment losses of ¥1.2B (mainly fixed assets in the GirlsTrend segment). After deducting corporate taxes and related charges of ¥11.2B (effective tax rate 35.2%), Net Income attributable to owners of the parent was ¥22.0B (+23.8%), achieving year-over-year revenue and profit growth.
Sekaikan recorded Revenue ¥277.1B (+9.3%) and Operating Income ¥23.4B (+32.1%, margin 8.4%), driven by strong planning and sales of plush and figures for amusement facilities using character licenses. GirlsTrend posted Revenue ¥143.9B (-2.9%) but Operating Income ¥35.9B (+14.0%, margin 24.9%), with the high-margin structure of the photo sticker booth business lifting consolidated profitability. FURYUNew saw Revenue ¥26.7B (-35.6%) and an Operating loss of ¥4.5B (widening loss), impacted by the absence of new titles in home game software and anime planning. There is a significant margin gap across segments: GirlsTrend’s high profitability contributes to group-wide improvements, while revenue concentration in Sekaikan (61.9%) and continued losses at FURYUNew are monitoring points for medium-term earnings stability.
[Profitability] Operating Income margin 7.4% (from 5.1% a year earlier, +2.3pt), Net Income margin 4.9% (from 4.0%, +0.9pt), Gross margin 39.3% (+1.2pt), SG&A ratio 31.9% (-1.2pt), indicating notable qualitative improvement in the profit structure. ROE rose to 9.3% (from 7.3% a year earlier, +2.0pt), driven mainly by improved Net Income margin. EBITDA margin is 12.6% (Operating Income ¥33.1B + Depreciation ¥23.1B ÷ Revenue ¥447.7B), indicating solid cash-generating capacity even including depreciation burden. [Cash Quality] Operating Cash Flow (OCF) ¥51.9B is 2.4x Net Income ¥22.0B, indicating high quality; OCF/EBITDA = 0.92x, reflecting favorable cash conversion. The accrual ratio is -10.3% ((OCF - Net Income)/Total Assets), conservative and indicative of a cash-led profit structure. [Investment Efficiency] Total asset turnover is 1.48x (down from 1.58x), and Capital Expenditure was ¥15.9B (3.5% of sales), within a standard range, but CapEx/Depreciation = 0.69x suggests replacement investment remains below depreciation. [Financial Soundness] Equity Ratio 77.9% (slightly down from 79.8%), current ratio 396%, quick ratio 356%, indicating very strong liquidity. Interest-bearing debt is effectively near zero, D/E is low and financial leverage conservative.
OCF was ¥51.9B (up from ¥38.6B, +34.6%), supported by pretax profit of ¥31.8B plus non-cash charges such as Depreciation ¥23.1B and an allowance for doubtful accounts increase of ¥1.4B. In working capital, trade receivables increased by ¥8.7B (CF outflow) and inventories increased by ¥2.1B (CF outflow), while accounts payable increased by ¥1.3B partially offsetting outflows. Corporate tax payments were ¥3.7B, a substantial decrease from ¥14.9B the prior year, which strongly boosted OCF. Investing Cash Flow was -¥21.3B, including CapEx of ¥15.9B (mainly tangible fixed assets) and intangible fixed asset investment ¥6.4B. Proceeds from business transfers of ¥1.6B partially offset this, resulting in Free Cash Flow of ¥30.6B (OCF ¥51.9B − Investing CF ¥21.3B). Financing Cash Flow was -¥10.4B, with dividend payments of ¥10.4B and lease liability repayments of ¥9.5B, largely offset by sale-and-leaseback proceeds of ¥9.5B. Cash and deposits at year-end were ¥137.5B (up ¥20.2B from ¥117.3B at the beginning of the period), and Free Cash Flow ¥30.6B exceeded dividends (¥10.4B) plus CapEx (¥15.9B), indicating the ability to balance shareholder returns and investment with internal funds.
Recurring earnings are driven by operating activities, with limited contribution from non-operating items (non-operating income ¥0.2B, non-operating expenses ¥0.3B, combined <1% of sales). Non-operating income mainly comprises ¥0.1B from investment partnership operations; foreign exchange gains are negligible, and non-operating expenses are minor, indicating high quality of recurring business earnings. Extraordinary items totaled a net loss of ¥1.2B (extraordinary income ¥0.03B, extraordinary loss ¥1.2B), primarily impairment losses of ¥1.2B on fixed assets in the GirlsTrend segment. The after-tax impact of temporary factors on Net Income is approximately ¥0.8B, roughly 4% of Net Income ¥22.0B, and thus limited. The difference between Operating Income ¥33.1B and Net Income ¥22.0B is explained by corporate taxes and extraordinary losses (corporate taxes and related charges ¥11.2B, effective tax rate 35.2%), and there is no structural concern regarding earnings quality. The accrual ratio of -10.3% is conservative, and OCF being 2.4x Net Income confirms a cash-led earnings profile. With an Operating Income margin of 7.4% and EBITDA margin of 12.6%, depreciation burden is within an appropriate range and cash generation is strong.
For the fiscal year ending March 2027 (FY2027), management forecasts Revenue ¥480.0B (+7.2%), Operating Income ¥40.0B (+20.6%), Ordinary Income ¥40.0B (+21.1%), Net Income attributable to owners of the parent ¥25.0B (+13.6%), and EPS ¥94.39, expecting both revenue and profit growth. The plan assumes an improvement in Operating Income margin to 8.3% (from 7.4% this period, +0.9pt), relying on maintenance of GirlsTrend’s high margin, continued growth in Sekaikan, and narrowing losses at FURYUNew. Current OCF ¥51.9B and ample cash balance ¥137.5B provide flexibility for investment and working capital to achieve the plan, but the decline in contract liabilities (advance receipts) from ¥8.8B to ¥6.5B is a neutral-to-slightly-weak demand leading indicator, making the replenishment of the pipeline in H2 notable. With CapEx subdued (CapEx/Depreciation = 0.69x), timelines for new product and service launches are key assumptions for achieving the forecast.
Year-end dividend is ¥40 (no interim dividend), resulting in an annual payout ratio of 51.4% (total dividends ¥10.4B ÷ Net Income ¥22.0B × adjusted number of shares outstanding), which is within a sustainable range. Against Free Cash Flow ¥30.6B, dividends ¥10.4B yield FCF coverage of 2.9x, indicating ample capacity. Share buybacks were effectively zero, with total return concentrated on dividends. DOE (Dividends ÷ Equity) is approximately 4.4%, a return level commensurate with equity. With cash and deposits ¥137.5B and OCF ¥51.9B, dividend funding is ample and short-term dividend sustainability appears secure. While lower CapEx than depreciation tends to generate FCF and bolster dividend capacity, in a phase of renewed medium-term growth investment there may be a need to rebalance toward prioritizing investment over distributions.
Segment concentration and IP dependency risk: Sekaikan accounts for 61.9% of sales, and trends in acquiring character licenses and demand from amusement facilities are directly linked to consolidated performance. Rising licensing costs or changes in renewal terms for major IP contracts could compress margins, and continued losses at FURYUNew (Operating loss ¥4.5B) indicate portfolio concentration risk.
Underinvestment and competitiveness risk: CapEx ¥15.9B is below Depreciation ¥23.1B (CapEx/Depreciation = 0.69x), reflecting continued restraint in renewal investment. Delays in technology/function refresh for photo sticker booths and product planning could lead to medium-term competitiveness erosion and market share loss.
Inventory / advance receipts risk and domestic demand dependence: Inventories expanded to ¥25.3B (from ¥22.6B, +11.9%), increasing obsolescence and impairment risk. Contract liabilities (advance receipts) fell to ¥6.5B from ¥8.8B, reducing short-term cash flow resilience. Additionally, domestic sales ratio of 87.5% implies high reliance on the domestic market, making performance sensitive to changes in domestic consumption trends.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income margin | 7.4% | 7.8% (4.6%–12.3%) | -0.3pt |
| Net Income margin | 4.9% | 5.2% (2.3%–8.2%) | -0.3pt |
Profitability is roughly in line with the industry median; improvements in gross margin and SG&A ratio drove a +2.3pt improvement in Operating Income margin year-over-year, bringing the company closer to the upper range of the industry standard.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 1.0% | 3.7% (-0.4%–9.3%) | -2.7pt |
Revenue growth lags the industry median by 2.7pt. Significant decline at FURYUNew (-35.6%) and a slight decrease at GirlsTrend contributed to subdued growth, highlighting a need to improve relative growth within the industry.
※ Source: Company compilation
This is a result that highlights qualitative improvement in the profit structure. Operating Income margin improved to 7.4% (from 5.1%, +2.3pt), Gross margin 39.3% (+1.2pt), SG&A ratio 31.9% (-1.2pt), with improved segment mix and cost efficiency boosting margins. Sustained high margin at GirlsTrend (24.9%) and revenue growth at Sekaikan (+9.3%) are primary drivers, delivering strong short-term profitability. At the same time, OCF ¥51.9B (2.4x Net Income) and FCF ¥30.6B demonstrate solid cash generation, supporting a financial base able to sustain dividends and investment.
Medium-term resilience of growth remains a monitoring point. Revenue growth of +1.0% trails the industry median of +3.7%; continued losses at FURYUNew (Operating loss ¥4.5B) and concentration of sales in Sekaikan (61.9%) indicate concentration risk in revenue sources. CapEx continues below Depreciation (CapEx/Depreciation = 0.69x), and constrained refresh investment for photo sticker booths and product planning could impact future competitiveness. The decline in contract liabilities (advance receipts) from ¥8.8B to ¥6.5B is a neutral-to-slightly-weak demand signal, and achievement of the FY2027 forecast (Revenue +7.2%, Operating Income +20.6%) depends on H2 pipeline replenishment and improvement at FURYUNew. Given high domestic dependence (87.5%), raising the share of overseas sales and re-accelerating investment are potential drivers for medium-term growth.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement disclosure 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 own responsibility; consult a professional if necessary before making any investment decision.