RVH Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥572M
• Operating Income: ¥-96M
• Net Income: ¥-32M
• EPS: ¥-4.50

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

RVH reported FY2026 Q2 consolidated results under JGAAP showing top-line pressure and continued operating losses, alongside ample reported working capital but weak operating cash generation. Revenue was 572 million yen, down 15.2% year over year, indicating demand softness and/or portfolio pruning. Gross profit was 238.978 million yen with a gross margin of 41.8%, which is relatively solid; however, SG&A intensity outweighed gross profit, resulting in an operating loss of 96 million yen (operating margin -16.8%). Ordinary loss narrowed to 55 million yen, implying net non-operating income of roughly 41 million yen, partially offsetting the operating deficit. Net loss was 113 million yen and EPS was -4.50, with the provided DuPont figures implying an ROE of -17.74%. The DuPont decomposition shows a net margin of -19.76%, asset turnover of 0.252, and financial leverage of 3.56, together driving the negative ROE. EBITDA was -86.101 million yen, and the implied interest coverage was deeply negative due to negative EBITDA, although absolute interest expense was modest at 1.31 million yen. Operating cash flow was -200.181 million yen, which is worse than the accounting loss, pointing to additional cash absorption, likely from working capital movements. The company reports very high current and quick ratios (451% and 431%, respectively), and working capital of 685.125 million yen, suggesting short-term liquidity headroom despite operating losses. The balance sheet shows total assets of 2.268 billion yen and total equity of 637 million yen; the DuPont-implied leverage (assets/equity) of 3.56 suggests meaningful leverage in economic terms, although the reported total liabilities figure appears lower than implied by leverage—data definitions or reporting scope may differ. Depreciation and amortization were 9.899 million yen, which is low relative to the operating loss, indicating that the loss is largely driven by operating costs rather than heavy non-cash charges. Dividends were not paid (DPS 0) and payout ratio was 0%, which is consistent with the loss-making position and negative OCF. Reported investing cash flow is 0 and cash and equivalents are shown as 0, both of which likely reflect unreported items rather than actual zeros; thus free cash flow and cash balance cannot be reliably assessed. The OCF/Net income ratio of 1.77 is not indicative of high earnings quality in this context because both figures are negative; rather, it implies cash burn exceeding the accounting loss. Overall, RVH faces a near-term task of stabilizing revenue, reducing SG&A, and restoring positive operating cash flow while maintaining liquidity. Given several unreported line items (treated as missing, not true zeros), the analysis focuses on the disclosed non-zero metrics.

Profitability Analysis

ROE_decomposition: ROE of -17.74% is driven by net margin of -19.76%, asset turnover of 0.252, and financial leverage of 3.56. The negative margin is the primary drag, with modest asset turnover and meaningful leverage amplifying the loss at the equity level. margin_quality: Gross margin is 41.8% (gross profit 238.978m on revenue 572.0m), but operating margin is -16.8% (operating loss 96.0m) due to high SG&A. SG&A is inferred at roughly 335.0m (gross profit 238.978m minus operating income -96.0m), exceeding gross profit and indicating insufficient scale and/or cost structure rigidity. Ordinary margin improved versus operating margin due to ~41m net non-operating gains, but net margin remains -19.76%. operating_leverage: Negative EBITDA of -86.101m and operating loss suggest low operating leverage benefits at current volume; incremental revenue would need to be sizable to cover fixed costs. With D&A only 9.9m, cost issues are predominantly cash operating expenses rather than depreciation-heavy structure.

Growth Assessment

revenue_sustainability: Revenue declined 15.2% YoY to 572m, suggesting demand softness or business mix rationalization. Without segment detail, sustainability is uncertain; stabilization requires either volume recovery or pricing/mix improvements. profit_quality: Non-operating income narrowed the loss (ordinary -55m vs operating -96m), but core profitability is weak. Low D&A relative to losses indicates cost structure, not accounting charges, is the core issue. outlook: Near-term outlook hinges on SG&A rationalization, revenue recovery, and working-capital discipline to arrest cash burn. Given the disclosed half-year asset turnover of 0.252 and negative OCF, regaining break-even likely requires both cost cuts and top-line stabilization. Non-operating gains may not be repeatable, so core improvement is needed.

Financial Health

liquidity: Current assets 880.203m vs current liabilities 195.078m yield a current ratio of 451% and quick ratio of 431%, implying ample short-term coverage. Inventories are modest at 38.633m, lowering obsolescence risk. solvency: Total assets are 2,268m and total equity 637m. DuPont-implied leverage (assets/equity) is 3.56x, indicating a leveraged balance sheet in economic terms. Reported total liabilities of 301.056m are below the level implied by leverage; interpretations may differ due to reporting classifications, so leverage should be inferred from the provided DuPont leverage. capital_structure: Debt-to-equity is 0.47x and interest expense is low at 1.31m, suggesting limited interest-bearing debt cost. Nevertheless, negative earnings and OCF heighten solvency risk over time if losses persist.

Cash Flow Quality

earnings_quality: OCF of -200.181m vs net loss of -113m indicates cash outflows exceed the accounting loss, implying adverse working-capital movements and/or cash costs not captured by non-cash charges. EBITDA is negative, confirming weak cash earnings. FCF_analysis: Investing CF is shown as 0 and thus FCF cannot be reliably computed. Given negative OCF, underlying FCF is likely negative absent asset sales or material inflows; however, precise FCF is indeterminable due to unreported capex. working_capital: Working capital of 685.125m supports liquidity, but the negative OCF suggests cash is being absorbed, likely by receivables or other current assets. With inventories small, the drag likely stems from receivables or payables timing.

Dividend Sustainability

payout_ratio_assessment: Payout ratio is 0% and DPS is 0, consistent with the net loss position. FCF_coverage: FCF coverage is reported as 0.00x and, with negative OCF and unreported investing CF, there is no basis for dividend coverage at present. policy_outlook: Given losses and cash burn, maintaining a non-dividend stance appears prudent until operating profitability and positive OCF are restored.

Risk Assessment

Business Risks:

• Revenue contraction of 15.2% YoY indicating demand softness or competitive pressures
• High SG&A burden leading to operating losses despite reasonable gross margin
• Dependence on non-operating gains to narrow ordinary loss, which may be non-recurring
• Potential customer concentration or product mix risks (segment details not disclosed)
• Execution risk around cost restructuring and turnaround timing

Financial Risks:

• Negative operating cash flow (-200.2m) increasing cash burn risk
• Economic leverage implied by 3.56x assets/equity despite low reported liabilities
• Sustained losses could erode equity (ROE -17.74%) and constrain financing access
• Limited visibility on cash balance and capex due to unreported items, complicating liquidity monitoring

Key Concerns:

• Core operating loss (-96m) driven by SG&A exceeding gross profit
• Cash outflow exceeding accounting loss, signaling pressure on liquidity if sustained
• Reliance on non-operating income to support ordinary income

Investment Implications

Key Takeaways:

• Top-line declined 15.2% YoY to 572m with continued operating loss (-96m).
• Gross margin is 41.8%, but SG&A is too high (≈335m), resulting in negative EBITDA (-86.1m).
• Ordinary loss (-55m) benefited from non-operating income (~41m).
• OCF is materially negative (-200.2m), indicating cash burn beyond accounting losses.
• Liquidity appears ample on reported ratios (current 451%, quick 431%), but cash balance is unreported.
• Leverage is meaningful per DuPont (3.56x assets/equity), warranting focus on solvency if losses persist.
• No dividend (DPS 0), consistent with loss-making and negative OCF.

Metrics to Watch:

• Revenue trajectory and order intake (to assess stabilization or further decline)
• SG&A run-rate and cost reduction progress
• Operating cash flow and working-capital turns (DSO/DPO if disclosed)
• Recurring vs. non-recurring non-operating items
• Leverage and equity ratio (when disclosed) and interest-bearing debt levels
• Capex and investing cash flows (to gauge true FCF)

Relative Positioning: Relative positioning appears challenged versus profitable peers given negative EBITDA and OCF despite acceptable gross margin; turnaround depends on cost discipline and revenue stabilization.

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
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis