| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1009.5B | ¥981.9B | +2.8% |
| Operating Income / Operating Profit | ¥21.6B | ¥20.6B | +4.5% |
| Ordinary Income | ¥24.2B | ¥26.1B | -7.2% |
| Net Income / Net Profit | ¥13.2B | ¥16.2B | -18.4% |
| ROE | 4.0% | 5.0% | - |
For the fiscal year ended March 2026, Revenue was ¥1009.5B (YoY +¥27.7B +2.8%), Operating Income was ¥21.6B (YoY +¥1.0B +4.5%), Ordinary Income was ¥24.2B (YoY -¥1.9B -7.2%), and Net Income was ¥13.2B (YoY -¥3.0B -18.4%). At the operating level, increases in sales and suppression of SG&A secured higher operating profit, but increases in interest expense (¥1.0B, prior year ¥0.4B) and recognition of special losses of ¥3.7B (including ¥3.6B loss on disposal of fixed assets) led to declines in Ordinary Income and Net Income, resulting in a finish of higher revenue and operating profit but lower final profit. Operating margin was 2.1%, flat from 2.1% a year earlier, and net margin deteriorated to 1.3% from 1.7% a year earlier (worsened by 0.4pt). Capital expenditures were actively executed at ¥59.8B, Operating Cash Flow (OCF) was ¥48.9B (YoY +59.8%) — 3.7x Net Income — a high level, but Free Cash Flow was -¥11.2B, and funding was supplemented by long-term borrowings of ¥80.0B.
[Revenue] Revenue was ¥1009.5B, up ¥27.7B (＋2.8%) year-on-year. As the business is a single segment Supermarket Business, detailed segmental sales composition is not disclosed, but the synergies of existing stores with new openings and renovations are presumed to have driven the sales increase. Gross profit was ¥303.9B and gross margin was 30.1%, down 0.1pt from 30.2% the prior year but generally stable. Price pass-through and category mix management appear to have been effective. SG&A was ¥293.4B, representing an SG&A ratio of 29.1%, unchanged from the prior year, and SG&A increased by +2.7% versus sales growth of +2.8%, indicating restrained cost growth. Major items include salaries and allowances ¥102.0B, rent ¥26.0B, depreciation ¥23.4B, and advertising ¥10.1B, with both labor and rent efficiencies maintained relative to sales.
[Profitability] Operating Income was ¥21.6B, up ¥1.0B (＋4.5%) year-on-year, securing an increase, and operating margin was 2.1%, flat year-on-year. The slight decline in gross margin was offset by SG&A restraint. Non-operating results were a net +¥2.6B, with interest and dividend income of ¥0.5B versus interest expense of ¥1.0B (prior year ¥0.4B), indicating increased interest burden. Non-operating revenue totaled ¥4.2B including other non-operating income of ¥1.6B, less non-operating expenses of ¥1.6B, reducing non-operating net from +¥5.4B in the prior year. As a result, Ordinary Income was ¥24.2B, down ¥1.9B (−7.2%) year-on-year. Extraordinary items were net -¥3.6B, with gains on sale of investment securities ¥0.1B offset by loss on disposal of fixed assets ¥3.6B (temporary factor related to openings/renovations) and impairment loss ¥0.1B. This increased from last year’s special losses of ¥2.2B (including impairment loss ¥1.8B), resulting in Pretax Income of ¥20.6B, down ¥3.3B (−13.8%) year-on-year. After deducting income taxes of ¥7.3B, Net Income was ¥13.2B, down ¥3.0B (−18.4%) year-on-year. In conclusion, the company achieved higher revenue and operating profit but saw declines in Ordinary Income and Net Income due to higher interest burden and temporary increases in loss on disposal of fixed assets — a pattern of higher revenue/operating profit but lower ordinary and final profit.
[Profitability] Operating margin was 2.1%, unchanged from 2.1% a year earlier; gross margin was 30.1%, down 0.1pt from 30.2% a year earlier; SG&A ratio was 29.1%, unchanged from 29.1% a year earlier. Net margin was 1.3%, down 0.4pt from 1.7% a year earlier, with special losses and increased interest expense pressuring final profit. ROE was 4.0%, down from 5.1% a year earlier, primarily driven by the deterioration in net margin. With a low operating margin, continuing improvements in store productivity and labor productivity remain challenges.
[Cash Quality] OCF of ¥48.9B is 3.7x Net Income of ¥13.2B and at a high level; the accrual ratio was -6.1%, indicating good cash realization of earnings. OCF/EBITDA ratio was 1.02x, showing strong cash conversion. Inventory turnover was about 25.1 turns per year, with inventory days approximately 14.5, indicating high turnover and efficient inventory management as a food supermarket.
[Investment Efficiency] ROIC (as presented) was 4.2%, with low operating margin constraining returns on invested capital. Capital expenditures were ¥59.8B, 2.3x depreciation of ¥26.4B, indicating an aggressive posture with an active cycle of store openings and renovations. Total asset turnover was 1.72x, maintaining a certain efficiency, but limited upside due to asset growth (Total Assets prior year ¥528.9B → ¥585.5B).
[Financial Soundness] Equity Ratio was 56.3%, down from 61.1% a year earlier but still at a stable level. Debt-to-equity ratio was 0.78x, Debt/EBITDA was 1.75x — at investment grade levels — and Interest Coverage (EBIT / interest paid) was 21.3x, which is strong. Current ratio was 113.8%, quick ratio 94.7%, short-term liquidity within an acceptable range, and working capital was positive ¥20.0B. Long-term borrowings were ¥83.9B, up +80.4% from ¥46.5B the prior year, indicating long-term financing for capital expenditures. Cash and deposits were ¥85.2B, up +37.0% from ¥62.2B the prior year, increasing liquidity headroom.
Operating Cash Flow was ¥48.9B, up from ¥30.6B a year earlier (+59.8%), and was 3.7x Net Income of ¥13.2B. OCF/EBITDA ratio was 1.02x, indicating good cash conversion. Accrual ratio was -6.1%, showing cash-led profit recognition. OCF subtotal (before working capital changes) was ¥56.8B, with working capital changes resulting in net cash outflow of -¥7.9B (decrease in trade receivables +¥2.5B, increase in inventories -¥2.4B, income taxes paid -¥7.3B, etc.). Investing Cash Flow was -¥60.1B, mainly due to capital expenditures of -¥59.8B. Capital expenditure was active at 2.3x depreciation of ¥26.4B, with heightened activity in openings, renovations, and labor-saving investments. Investment in intangible assets was -¥1.1B, and acquisition of investment securities was -¥1.0B. Free Cash Flow (OCF + Investing CF) was -¥11.2B, reflecting cash outflow ahead of investments. Financing Cash Flow was +¥33.1B, driven mainly by net proceeds from long-term borrowings (¥80.0B) less repayments of -¥29.3B, net increase +¥50.7B. Dividend payments were -¥5.9B, share buybacks -¥6.7B, and lease liability repayments -¥4.9B, resulting in Cash and Cash Equivalents increasing from ¥63.1B at the beginning of the period to ¥85.2B at the end of the period (+¥21.9B). Working capital changes were limited and there were no signs of earnings manipulation.
Recurring earnings are composed of Operating Income ¥21.6B and net non-operating results +¥2.6B, so most of Ordinary Income ¥24.2B stems from the core business and financial results. Meanwhile, special losses of ¥3.7B pressured final profit, eroding about 27.9% of Net Income ¥13.2B. The main cause of special losses was loss on disposal of fixed assets ¥3.6B, largely temporary and related to openings/renovations, with a rebound effect expected in subsequent periods. The increase in non-operating expenses (interest paid ¥1.0B, prior year ¥0.4B) reflects a structural change associated with higher interest-bearing debt and may persist. Non-operating revenue was ¥4.2B, 0.4% of sales, indicating low reliance on non-core income. Accrual quality is good, with OCF/Net Income 3.7x and accrual ratio -6.1%, showing cash-backed earnings. The divergence rate from Ordinary Income to Net Income was -45.5%, driven by special losses and an effective tax rate of 35.6%. When assessing sustainable earning power, emphasis should be placed on OCF and EBITDA.
Full Year guidance is Revenue ¥1,040.0B (YoY +3.0%), Operating Income ¥23.0B (YoY +6.8%), Ordinary Income ¥25.1B (YoY +3.8%), Net Income ¥13.5B (YoY +1.6%), EPS ¥161.33, and dividend ¥35.00 (per period assumed). Progress against current-year results is Revenue 97.1%, Operating Income 93.6%, Ordinary Income 96.4%, Net Income 98.2%, indicating generally on-track performance. The lag in Operating Income progress is likely due to increased special losses and higher interest burden, but Net Income is roughly in line with plan. For next period’s projected Operating Income +6.8% and Ordinary Income +3.8%, the current aggressive capital expenditures and a rebound from one-off losses are tailwinds, while rising interest expense remains a headwind.
Dividends are annual ¥70 (Q2 ¥35, year-end ¥35), with payout ratio 48.9%, a sustainable level. The prior year also had annual ¥70 (interim ¥35, year-end ¥35), so dividend amount was unchanged. Share buybacks of ¥6.7B were executed, and combined with dividend payments of ¥5.9B the Total Return Ratio is approximately 96–98%, a high level. Free Cash Flow was -¥11.2B, negative, so dividends and share buybacks were covered by OCF and borrowings. This is a temporary FCF deficit in an investment-first phase; improvement is possible once investment payback proceeds in subsequent periods, but for now prioritizing stable dividends while considering capex and interest burden in return policy is reasonable.
Operating efficiency risk: Operating margin of 2.1% is 2.5pt below the industry median of 4.6%, indicating a low absolute level. If labor or energy costs rise or price competition intensifies causing SG&A ratio to rise again, there is risk of further decline in operating margin. Gross margin of 30.1% is stable, but could be pressured if discounting intensifies.
Interest burden increase risk: Long-term borrowings increased to ¥83.9B (+80.4%), and interest paid increased to ¥1.0B (prior year ¥0.4B). Interest coverage is 21.3x and strong, but down from 51.6x the prior year. In a rising interest rate environment, further increases in financing costs are a risk and could pressure Ordinary Income.
Investment payback risk: CapEx of ¥59.8B is 2.3x depreciation and aggressive, while ROIC of 4.2% remains low. If the effects of store openings and renovations do not materialize as expected, improvement in returns on invested capital could be delayed, and combined with higher financial leverage, shareholder value creation could stagnate. The recognition of loss on disposal of fixed assets ¥3.6B is tied to the openings/renovations cycle, and further occurrences are expected, contributing to Net Income volatility.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating margin | 2.1% | 4.6% (1.7%–8.2%) | -2.5pt |
| Net margin | 1.3% | 3.3% (0.9%–5.8%) | -2.0pt |
Profitability is below the industry median, and improving operating efficiency is a key issue.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue growth (YoY) | 2.8% | 4.3% (2.2%–13.0%) | -1.5pt |
Revenue growth slightly lags the industry median but remains stable within the IQR range.
※ Source: Company compilation
Raising operating efficiency is key: Operating margin 2.1% is well below the industry median of 4.6%, and ROIC 4.2% remains low. The effectiveness of aggressive capital expenditures (¥59.8B) going forward — whether store productivity and labor-saving investments will contribute to SG&A restraint and gross margin improvement — is a key watch item. High inventory turnover (25.1 turns) and low rent ratio (2.6%) are strengths that can be leveraged to absorb fixed costs and contribute to operating leverage.
Rebound from one-off losses and interest burden trend: Loss on disposal of fixed assets ¥3.6B is a temporary factor, and a rebound effect is expected next fiscal year. Conversely, the increase in interest paid to ¥1.0B (prior year ¥0.4B) is structural, and in a rising interest rate environment there is risk of further increases in financing costs. Interest coverage of 21.3x is strong but declining; monitoring interest rate trends and the borrowing/repayment schedule is necessary. Free Cash Flow is -¥11.2B but is temporary in an investment-first phase; the potential for improvement once investments generate returns should be monitored.
Balance between dividends and total returns: Payout ratio 48.9% and Total Return Ratio ~96–98% indicate high shareholder returns, but these are not covered by FCF and rely on borrowings. Going forward, adjusting capex levels and improving OCF will be necessary to establish a sustainable return policy. Dividends were maintained at annual ¥70, indicating a preference for stable dividends while balancing investment and returns.
This report was auto-generated by AI analyzing 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 data. Investment decisions should be made at your own responsibility and, if necessary, in consultation with a professional advisor.