| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥6907.9B | ¥5910.9B | +16.9% |
| Operating Income / Operating Profit | ¥808.2B | ¥594.1B | +36.0% |
| Ordinary Income | ¥824.0B | ¥578.3B | +42.5% |
| Net Income / Net Profit | ¥595.9B | ¥437.9B | +36.1% |
| ROE | 14.7% | 13.0% | - |
For the nine months ended August 2026 (FY2026 Q3 cumulative), Ryohin Keikaku achieved revenue of ¥6907.9B (YoY +¥997.0B +16.9%), Operating Income of ¥808.2B (YoY +¥214.1B +36.0%), Ordinary Income of ¥824.0B (YoY +¥245.7B +42.5%), and Net Income of ¥595.9B (YoY +¥158.0B +36.1%), delivering higher-than-anticipated progress on both top-line and bottom-line. In addition to revenue growth, gross margin expanded (52.5%, prior year 51.2%) and SG&A ratio improved (40.8%, prior year 41.2%), resulting in an Operating Margin of 11.7%, up 1.6ppt YoY. The strong rise in Ordinary Income (+42.5%) was helped by non-operating improvements including foreign exchange gains of ¥32.0B, but the primary driver of earnings improvement was operating performance, indicating good quality of earnings. By segment, East Asia led high-margin growth with Revenue +29.3% and Operating Income +39.6% (margin 21.3%), while Domestic also performed steadily with Revenue +8.9% and Operating Income +23.9% (margin 13.1%). Progress against Full Year guidance stands at Revenue 76.2%, Operating Income 82.5%, Ordinary Income 83.2%, Net Income 88.9%, comfortably above the customary 75% benchmark, implying upside risk to consensus.
[Revenue] Revenue ¥6907.9B (+16.9%) was driven by high growth in the East Asia Business (+29.3%, ¥2128.1B) and expansion in the Southeast Asia & Oceania Business (+34.7%, ¥490.7B). The Domestic Business also maintained steady growth at +8.9% (¥3911.2B), and the Americas & Europe Business secured double-digit growth at +21.9% (¥377.8B). Merchandise / Product sales amounted to ¥6871.5B, accounting for 99.5% of total revenue, while Operating Revenue was limited at ¥3.64B. Regional revenue composition was Domestic 56.6%, East Asia 30.8%, Southeast Asia & Oceania 7.1%, Americas & Europe 5.5%, raising the overseas ratio to 43.4%. Year-on-year, overseas business contributions were the primary source of growth, notably the East Asia incremental revenue (+¥481.3B) which accounted for roughly 48% of total company revenue growth. No detailed disclosure on same-store sales was provided, but stable Domestic growth and high overseas expansion are functioning as dual engines.
[Profitability] Cost of sales was ¥3279.5B (cost ratio 47.5%), leading to a gross margin improvement of 1.3ppt to 52.5%. SG&A was ¥2820.2B (SG&A ratio 40.8%), an increase of +15.9% YoY but below revenue growth (+16.9%), resulting in a 0.4ppt decline from prior year 41.2%. Consequently, Operating Income was ¥808.2B (+36.0%), and Operating Margin improved to 11.7% (prior year 10.1%), a 1.6ppt enhancement reflecting clear operating leverage. Non-operating items produced net income of +¥15.7B, primarily due to foreign exchange gains of ¥32.0B, offset by interest expense of ¥23.1B and foreign exchange losses of ¥8.0B. Extraordinary items were net +¥10.5B (Special gains ¥43.9B − Special losses ¥33.4B), limited in size; major items included gain on sale of investment securities ¥23.7B and loss on retirement of fixed assets ¥30.7B. After deducting income taxes of ¥238.6B (effective tax rate 28.6%), Net Income attributable to owners of the parent was ¥585.5B (+34.3%), with non-controlling interests of ¥10.3B being immaterial. In conclusion, revenue growth, gross margin improvement, SG&A efficiency, and non-operating improvements combined to drive higher profits.
The Domestic Business recorded Revenue ¥3911.2B (+8.9%), Operating Income ¥511.8B (+23.9%), and margin 13.1% (prior year 11.5%), delivering profit growth exceeding revenue growth and a 1.6ppt margin improvement. Although same-store details are undisclosed, the significant operating income expansion suggests gross margin improvement and SG&A efficiency. The East Asia Business posted Revenue ¥2128.1B (+29.3%), Operating Income ¥454.2B (+39.6%), and margin 21.3% (prior year 19.8%), making it the most profitable and fastest-growing segment. The 1.5ppt margin improvement likely reflects product mix optimization and scale effects. The Southeast Asia & Oceania Business achieved Revenue ¥490.7B (+34.7%), Operating Income ¥69.6B (+55.5%), and margin 14.2% (prior year 12.3%), combining high growth with margin expansion (+1.9ppt). The Americas & Europe Business posted Revenue ¥377.8B (+21.9%), Operating Income ¥55.2B (+3.8%), and margin 14.6% (prior year 13.7%); while revenue growth outpaced profit growth, it remained profitable with a 0.9ppt margin improvement. Other (Global Sourcing) generated Operating Income ¥1.0B (prior year ¥0.5B), a small contribution. The high East Asia margin (21.3%) materially lifts the company-wide Operating Margin of 11.7%, with a margin gap versus Domestic of approximately 8.2ppt acting as a driver of consolidated profitability.
[Profitability] Operating Margin of 11.7% improved 1.6ppt from 10.1% last year, supported by Gross Margin 52.5% (prior year 51.2%) and SG&A Ratio 40.8% (prior year 41.2%). ROE 14.7% is explained by Net Profit Margin 8.6% × Total Asset Turnover 1.05 × Financial Leverage 1.62, with Net Profit Margin improvement being the largest contributor. EPS ¥110.33 (prior year ¥82.25, +34.1%) reflects higher Net Income, and BPS ¥747.37 (prior year ¥625.38, +19.5%) rose from retained earnings accumulation. [Cash Quality] Inventory stood at ¥1770.1B (prior year ¥1697.7B, +4.3%), a much smaller increase than revenue growth (+16.9%), indicating improved inventory discipline. Accounts receivable surged to ¥275.4B (prior year ¥180.2B, +52.8%), suggesting extended credit terms or channel mix changes. Estimated inventory turnover days are about 93 days and receivables turnover days about 15 days, the former improving while the latter worsening. [Investment Efficiency] Total Asset Turnover was 1.05x (prior year 1.05x), unchanged as revenue and total assets grew in balance. Fixed assets increased to ¥2221.4B (prior year ¥1956.8B, +13.5%); tangible fixed assets ¥1292.6B reflect new store openings and renovations. Goodwill is minimal at ¥1.4B, indicating low M&A dependence. [Financial Soundness] Equity Ratio was 61.6% (prior year 59.7%), maintaining a high level; Current Ratio 300.2% and Quick Ratio 177.9% are very strong. Interest-bearing debt totals ¥315.9B (corporate bonds ¥300.0B, long-term borrowings ¥14.9B, short-term borrowings ¥1.0B), substantially below Cash & Deposits ¥1687.2B, indicating an effectively debt-free position. Interest Coverage is approximately 35x (Operating Income ¥808.2B ÷ Interest Expense ¥23.1B), demonstrating strong financial resilience.
Although detailed Operating Cash Flow disclosure is absent, balance sheet trends were analyzed for cash flow insights. Cash & Deposits rose significantly to ¥1687.2B (prior year ¥1349.3B, +¥337.9B), suggesting internal cash accumulation from operating activities. In working capital, inventory growth (+¥72.4B, +4.3%) lagged revenue growth substantially, positively contributing to cash generation; however, the sharp rise in Accounts Receivable (+¥95.2B, +52.8%) absorbed short-term working capital. Accounts Payable increased to ¥639.9B (prior year ¥564.0B, +¥75.9B, +13.5%), with natural expansion of trade payables partially offsetting working capital absorption. Retained earnings rose to ¥3426.7B (prior year ¥3007.7B, +¥419.0B), reflecting internal retention of Net Income. Interest-bearing debt decreased by approximately ¥100.9B from ¥416.8B to ¥315.9B (corporate bonds and borrowings), strengthening the effectively debt-free profile. Free Cash Flow details are unknown, but simultaneous cash increase and debt reduction suggest robust Operating Cash Flow and conservative Financing Cash Flow. Overall, improved inventory discipline supports cash conversion, while the Accounts Receivable increase warrants monitoring of subsequent collections.
Core recurring earnings are centered on Operating Income ¥808.2B, with non-operating items contributing net +¥15.7B (Non-operating Income ¥41.2B − Non-operating Expenses ¥25.5B), a limited effect. The primary non-operating item was foreign exchange gains ¥32.0B, which include one-off elements and should be noted, but dependence on non-operating items is very low at 0.2% of Revenue, indicating operating activities are the earnings engine. Extraordinary items were net +¥10.5B (Special gains ¥43.9B − Special losses ¥33.4B), with gain on sale of investment securities ¥23.7B and loss on retirement of fixed assets ¥30.7B as major items; the magnitude is small relative to Net Income ¥595.9B (~1.8%). The difference between Ordinary Income ¥824.0B and Profit Before Tax ¥834.5B (approx. ¥10.5B) is explained by net extraordinary items, with no abnormal divergence observed. From an accrual perspective, inventory growth (+4.3%) considerably lags revenue growth (+16.9%), which is favorable, whereas the rapid rise in Accounts Receivable (+52.8%) could suppress operating cash flow in the short term. Comprehensive Income ¥822.3B exceeds Net Income ¥595.9B by ¥226.4B; Other Comprehensive Income ¥226.5B comprises Foreign Currency Translation Adjustments +¥102.3B, Deferred Hedge Gains +¥140.5B, and Valuation Difference on Available-for-Sale Securities −¥16.3B. Large valuation gains from translation adjustments and hedge accounting create divergence from realized profit measures, reflecting overseas operations and risk management accounting. Overall, earnings are predominantly driven by operating performance, one-off items are limited, and quality of earnings is generally assessed as good.
Full Year guidance is Revenue ¥9070.0B, Operating Income ¥980.0B (YoY +32.7%), and Ordinary Income ¥990.0B (YoY +36.9%). Progress through Q3 stands at Revenue 76.2%, Operating Income 82.5%, Ordinary Income 83.2%, and Net Income 88.9% (¥595.9B against Full Year Net Income guidance ¥670.0B), all clearly above the standard 75% pace. Notably, the stronger-than-expected progress below Operating Income suggests gross margin improvement and SG&A efficiency exceeded assumptions. While Q4 typically features seasonality and year-end costs (store openings, promotions, personnel expenses), current progress indicates upside risk to Full Year guidance. Should East Asia’s high-margin growth continue and Domestic operating leverage persist, upward revisions to Operating and Ordinary Income are possible. The company revised guidance this quarter, maintaining a conservative plan while reflecting front-loaded progress.
An interim dividend of ¥16.00 per share was paid. A 2-for-1 stock split was implemented effective September 1, 2025, so the pre-split equivalent dividend is ¥32.00 per share. Full Year dividend guidance is ¥16.00 (post-split basis), equivalent to ¥32.00 on a pre-split basis. Assuming Q3 cumulative EPS ¥110.33 (pre-split basis) versus Full Year EPS guidance ¥126.19 (approximately ¥252.38 on a pre-split basis), the payout ratio is roughly 12.7% (pre-split basis ¥32 ÷ ¥252.38), a very conservative level. With Cash & Deposits ¥1687.2B and an effectively debt-free balance sheet, securing dividend funds is facile and dividend sustainability is high. No disclosure on share buybacks is included in this material; dividends are the primary shareholder return at present. Calculation of total return ratio requires buyback data, but the low payout ratio suggests scope for future dividend increases or additional returns (share buybacks).
Foreign exchange risk: With East Asia revenue share rising to 30.8% and overseas ratio reaching 43.4%, FX volatility has a larger impact on margins. This period’s foreign exchange gains of ¥32.0B boosted Ordinary Income, but yen appreciation would be a headwind. East Asia’s high margin (21.3%) exhibits higher FX sensitivity, and a 1-yen appreciation could have an impact on the order of several hundred million yen. The presence of Deferred Hedge Gains +¥140.5B implies hedge positions, but details are unknown.
Rapid increase in Accounts Receivable and collection risk: Accounts Receivable ¥275.4B (prior year ¥180.2B, +52.8%) rose materially more than revenue growth (+16.9%). This suggests extended credit terms or shifts toward B2B/wholesale channels, raising concerns over collection delays and credit losses. Allowances for doubtful accounts are small at ¥0.06B in current assets and ¥0.75B in investment and other assets, necessitating continued assessment of adequacy relative to receivable growth.
Slowdown risk in Domestic same-store growth: Domestic revenue +8.9% trails overseas (East Asia +29.3%, Southeast Asia & Oceania +34.7%) significantly. With same-store details undisclosed, growth excluding new store openings may be limited. Weather, consumer trends, and intensified competition could dampen Domestic same-store sales, affecting consolidated growth sustainability. Domestic still comprises 56.6% of revenue, so stable Domestic performance remains foundational to company results.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 11.7% | 3.9% (1.2%–8.9%) | +7.8pt |
| Net Profit Margin | 8.6% | 2.2% (0.2%–5.7%) | +6.4pt |
Operating Margin is 7.8ppt above the industry median, placing the company in the upper tier of profitability within retail.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 16.9% | 3.0% (-0.1%–9.2%) | +13.8pt |
Revenue growth exceeds the industry median by 13.8ppt, classifying the company as a high-growth firm within the sector.
※ Source: Company compilation
Progress against Full Year guidance is front-loaded, with Operating Income at 82.5% and Net Income at 88.9% of guidance, indicating upside risk. East Asia’s high-margin growth (Operating Margin 21.3%, +39.6% growth) has driven consolidated margin improvement, and Domestic Operating Income +23.9% outpaced revenue growth. Simultaneous Gross Margin expansion (52.5%) and SG&A ratio reduction (40.8%) reflect operational leverage and structural improvement. Even accounting for Q4 seasonality and year-end costs, the probability of achieving Full Year guidance is high, with potential for upward revision.
Financial health is excellent: Equity Ratio 61.6%, Current Ratio 300.2%, and Interest Coverage ~35x provide ample capacity to balance growth investment and shareholder returns. Cash & Deposits ¥1687.2B far exceed interest-bearing debt ¥315.9B, supporting accelerated store openings and deeper overseas expansion with minimal financial constraint. Payout Ratio is approximately 12.7%, a conservative level that leaves room for dividend increases or additional returns (e.g., buybacks). Improved inventory discipline, with inventory growth well below revenue growth, underpins healthy cash conversion.
Geographic mix improvement is key to profitability: East Asia margin 21.3% (about 8.2ppt higher than Domestic 13.1%) has elevated consolidated Operating Margin to 11.7%. While an overseas ratio of 43.4% is positive for growth, it raises FX exposure and the rapid Accounts Receivable increase (+52.8%) merits attention. The receivable rise suggests extended credit terms or channel mix shifts, so strengthening collection management and monitoring cash flow trends is necessary.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial disclosures. Investment decisions are your responsibility; consult a professional advisor as needed.