| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥932.7B | ¥887.1B | +5.1% |
| Operating Income / Operating Profit | ¥48.4B | ¥45.7B | +5.9% |
| Ordinary Income | ¥64.3B | ¥52.5B | +22.7% |
| Net Income / Net Profit | ¥40.5B | ¥30.9B | +31.3% |
| ROE | 13.3% | 11.4% | - |
The fiscal year ended March 2026 closed with Revenue ¥932.7B (YoY +¥45.6B +5.1%), Operating Income ¥48.4B (YoY +¥2.7B +5.9%), Ordinary Income ¥64.3B (YoY +¥11.9B +22.7%), and Net Income ¥40.5B (YoY +¥9.7B +31.3%), achieving both top-line and bottom-line growth. Operating margin improved to 5.2% (+0.1pt from 5.1% a year earlier). At the ordinary income level, growth outpaced operating due to a large increase in non-operating income (Interest Income ¥8.1B, Foreign Exchange Gains ¥9.1B). The Restaurant segment drove performance with Revenue +9.5% and Operating Income +40.6% (double-digit profit growth), the Meal Delivery (senior food delivery) business maintained stable earnings with Revenue +2.0% and Operating Income ¥43.1B, while Overseas posted Revenue +5.8% but was weighed down by impairments, with Operating Income -59.1%. Operating Cash Flow was ¥75.7B (+9.8%), generating 1.87x of Net Income; Free Cash Flow was ¥26.4B covering capital expenditures (¥29.5B) and dividend payments. ROE was 13.3% and Equity Ratio was 40.9%, indicating strong liquidity with Cash ¥435.7B covering short-term borrowings ¥67.2B by 6.5x. Leverage is somewhat elevated (Debt/EBITDA 3.91x), making mid-term reduction of interest-bearing debt a priority.
【Revenue】 Revenue ¥932.7B (YoY +5.1%) was driven by Restaurants (Restaurant Business) ¥376.7B (+9.5%) and Overseas ¥115.0B (+5.8%). Meal Delivery (senior food delivery) recorded ¥410.4B (+2.0%), showing modest growth supported by a stable existing customer base. Environmental Business was ¥28.2B (-7.5%), Agriculture ¥10.5B (+23.3%), and Other ¥4.5B (-42.4%). Overall, the domestic Restaurant and Meal Delivery twin pillars account for just under 90% of the portfolio. By geography: Japan ¥812.7B, Southeast Asia ¥109.5B, United States ¥10.4B, with domestic weighting about 87%. Revenue growth structurally reflects improved same-store efficiency in Restaurants and recovery in customer visits, plus continued usage promotion in Meal Delivery. Compared with the prior year, when mobility recovery was still in progress, this period benefited from normalization of consumer behaviour.
【Profitability】 Operating Income ¥48.4B (YoY +5.9%) reflects Cost of Sales ¥412.8B (Cost of Sales Ratio 44.3%), Gross Profit ¥519.9B (Gross Margin 55.7%), and SG&A ¥471.5B (SG&A Ratio 50.6%). Gross margin declined -0.9pt from 56.6% a year earlier, but SG&A ratio improved -0.9pt from 51.5%, supporting a +0.1pt increase in operating margin. Restaurant segment Operating Income was ¥22.6B (+40.6%) with a margin of 6.0% (prior 4.7%), showing significant improvement from operating leverage at the same-store level. Meal Delivery Operating Income was ¥43.1B (-8.7%) with margin 10.5% (prior 11.7%), a slight decrease but still the largest absolute contributor to group profits. Overseas Operating Income was ¥0.6B (-59.1%) with margin 0.5%, depressed by impairment losses totaling ¥12.5B for the period, of which about ¥10B related to overseas operations. Environmental Business Operating Income was ¥3.0B (+56.2%) with margin 10.8%, indicating improved profitability in the portfolio. SG&A includes goodwill amortization ¥1.3B (down from ¥2.3B). Ordinary Income ¥64.3B (+22.7%) benefited from a large increase in non-operating income to ¥25.8B (prior ¥16.1B), mainly Interest Income ¥8.1B (prior ¥7.4B) and Foreign Exchange Gains ¥9.1B (prior ¥0). Non-operating expenses were ¥9.8B (prior ¥9.3B), led by Interest Expense ¥5.4B. Extraordinary losses ¥12.7B (prior ¥7.6B) were mostly impairment losses ¥12.5B—¥9.98B in Overseas and ¥1.96B in Domestic Restaurants—reflecting proactive adjustment of asset quality. Profit before tax ¥51.7B (prior ¥44.8B) and Net Profit after tax ¥40.5B (+31.3%) culminated in year-over-year improvements.
Domestic Restaurants (Restaurant Business) recorded Revenue ¥376.7B (+9.5%) and Operating Income ¥22.6B (+40.6%), with margin improving materially to 6.0% (prior 4.7%) driven by same-store efficiency gains and cost control. Meal Delivery (senior food delivery) posted Revenue ¥410.4B (+2.0%) and Operating Income ¥43.1B (-8.7%) with margin 10.5% (prior 11.7%), a slight decrease but remaining the largest profit contributor and demonstrating stability of the recurring customer base. Overseas posted Revenue ¥115.0B (+5.8%) and Operating Income ¥0.6B (-59.1%) with margin 0.5% (prior 1.4%); the recognition of impairments ¥9.98B this period was the primary cause and restoring underlying profitability is a challenge. Environmental Business Revenue ¥28.2B (-7.5%) and Operating Income ¥3.0B (+56.2%) with margin 10.8% (prior 6.4%) showed significant improvement from cost reductions and margin management. Agriculture Revenue ¥10.5B (+23.3%) and Operating Income -¥0.1B (prior -¥1.5B) indicates shrinking losses. Other Revenue ¥4.5B (-42.4%) and Operating Income -¥0.1B (prior -¥0.1B) continued to contract. After corporate expenses ¥20.7B (prior ¥19.6B), consolidated Operating Income was ¥48.4B.
【Profitability】Operating margin 5.2% (prior 5.1%) improved +0.1pt. Gross margin 55.7% (prior 56.6%) declined -0.9pt due to higher raw material costs, while SG&A ratio 50.6% (prior 51.5%) improved -0.9pt absorbing costs. ROE 13.3% is above the company’s historical levels and decomposes via DuPont as Net Profit Margin 4.4% × Total Asset Turnover 1.25x × Financial Leverage 2.45x. Interest Coverage 13.3x (Operating Cash Flow / Interest Paid) indicates adequate interest-paying capacity. 【Cash Quality】Operating Cash Flow / Net Income 1.87x, OCF / EBITDA 1.06x, indicating good cash backing of earnings; Accrual Ratio -4.6% suggests high earnings quality. 【Investment Efficiency】CapEx / Depreciation 1.27x shows ongoing growth investment; CapEx ¥29.5B equals 39.0% of Operating Cash Flow, a healthy level. 【Financial Soundness】Equity Ratio 40.9% (prior 37.9%), Current Ratio 301.2%, Quick Ratio 292.4% indicate strong liquidity, with Cash ¥435.7B covering short-term borrowings ¥67.2B by 6.5x and limited maturity mismatch. Debt/EBITDA 3.91x is somewhat elevated, making mid-term leverage reduction a challenge. Debt to Equity (Debt/Equity) ratio 1.44x, Debt/Capital 47.9%.
Operating Cash Flow was ¥75.7B (prior ¥68.9B, +9.8%), generating 1.87x of Net Income ¥40.5B. Starting from cash flow before working capital changes ¥82.8B including Depreciation ¥23.2B and non-cash charges (Impairment ¥12.5B, Goodwill Amortization ¥1.3B), working capital movements were modest: Trade Receivables increase -¥5.3B, Inventory change +¥0.1B, Trade Payables increase +¥0.8B. Corporate tax payments -¥11.4B, Interest and dividend received +¥9.4B, Interest paid -¥5.3B resulted in Operating Cash Flow ¥75.7B. Investing Cash Flow was -¥49.2B, comprised of CapEx -¥29.5B (mainly PPE purchases), Acquisition of Investment Securities -¥71.0B (deployment of surplus funds), and Proceeds from Sales of Securities +¥63.5B, netting to -¥49.2B. Free Cash Flow was ¥26.4B (Operating CF + Investing CF), sufficient to cover Dividends Paid ¥9.0B and debt repayments. Financing Cash Flow was -¥19.0B, with Long-term Borrowings Drawn +¥70.0B, Long-term Borrowings Repayment -¥65.6B, Dividends Paid -¥9.0B, Lease Liability Repayments -¥11.5B, reflecting refinancing/compression of interest-bearing debt and dividend payments. Cash and Cash Equivalents rose from ¥139.5B at the beginning of the period to ¥147.0B at the end (+¥7.6B), indicating ample liquidity on hand.
Earnings quality can be decomposed into recurring and non-recurring components. Operating Income ¥48.4B reflects recurring business earnings, while non-operating income ¥25.8B (2.8% of sales) includes Interest Income ¥8.1B and Foreign Exchange Gains ¥9.1B, which are highly volatile and sensitive to interest and FX movements. Ordinary Income ¥64.3B exceeded Operating Income by 33.0% due to the boost from non-operating income; approximately 30.8% of Net Income ¥40.5B is attributable to non-operating factors. Operating Cash Flow at 1.87x Net Income and an Accrual Ratio of -4.6% indicate good cash backing of earnings. Extraordinary losses ¥12.7B (mainly impairments ¥12.5B) are non-recurring and can be viewed positively as balance sheet cleansing for overseas assets, but should be excluded when assessing recurring earning power. Foreign Exchange Gains ¥9.1B were zero in the prior year and largely reflect yen depreciation this period, so this is a temporary factor. Equity-method income was ¥0.1B (prior -¥0.1B), minor in impact on consolidated results. Comprehensive income ¥42.0B was Net Income ¥40.5B plus FX translation adjustments +¥0.7B and valuation gains on securities +¥0.2B, showing minor divergence from Net Income. For assessment of recurring earning power, Operating Income ¥48.4B should be the base, with due consideration of volatility in non-operating income.
A year-end dividend of ¥10 was paid, maintaining a full-year Payout Ratio of 13.2% (same as prior year), reflecting a conservative stance. Total dividends amounted to ¥9.0B (based on 40.1 million shares outstanding after treasury shares), providing 2.9x coverage relative to Free Cash Flow ¥26.4B. The company has maintained consecutive dividends, having paid a year-end dividend ¥10 in the prior year as well. Treasury shares held total 2.58 million shares (treasury share ratio approx. 6.0%), with no buybacks or disposals during the period; shareholder returns remain dividend-focused. The payout ratio of 13.2% and emphasis on internal reserves align with a strategy to prioritize debt reduction and growth investments under somewhat elevated leverage (Debt/EBITDA 3.91x). Dividend payments ¥9.0B relative to Operating CF ¥75.7B represent 11.9%, and combined with CapEx ¥29.5B total uses remain 51.5%, with the remainder used for debt repayment and surplus fund deployment. Class A preferred shares (unlisted) pay an annual dividend of ¥4,000,000 per share, with limited effect on ordinary shareholders’ dividend resources.
Raw material, labor, and energy cost inflation risk: Gross margin this period was 55.7%, down -0.9pt from 56.6% a year earlier, indicating material and labor cost pressures. If price pass-through and cost absorption lag, there is risk of further compression in operating margin. Both Restaurants and Meal Delivery have relatively high variable cost ratios, making margin protection in an inflationary environment a key challenge.
Deterioration in overseas profitability and additional impairment risk: Overseas segment margin is weak at 0.5%, and impairments ¥9.98B were recorded this period. Goodwill balance ¥2.95B (entirely overseas) and the profitability of fixed assets, if not improved, pose risk of additional impairments. Overseas revenue weighting is limited at 12.3% but can affect capital allocation efficiency.
Leverage burden and interest rate risk: Interest-bearing debt stands at ¥281.0B (Short-term borrowings ¥67.2B + Long-term borrowings ¥212.9B + lease liabilities, etc.), with Debt/EBITDA 3.91x—relatively high. Interest Coverage 13.3x shows capacity to service interest but in a rising rate environment interest expenses may increase and financial flexibility could deteriorate. The sustainability of debt repayment and leverage reduction through retained earnings is key to financial soundness.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.2% | 4.6% (1.7%–8.2%) | +0.6pt |
| Net Profit Margin | 4.3% | 3.3% (0.9%–5.8%) | +1.0pt |
Both operating margin and net profit margin exceed industry medians, indicating favourable profitability versus peers.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 5.1% | 4.3% (2.2%–13.0%) | +0.8pt |
Revenue growth outperforms the industry median, reflecting the advantage of the dual pillars of Restaurants and Meal Delivery.
※ Source: Company compilation
Operating leverage in Domestic Restaurants and stable earnings in Meal Delivery: Restaurant operating margin improved to 6.0% (prior 4.7%, +1.3pt) through same-store efficiency gains and cost control. Meal Delivery delivered Operating Income ¥43.1B (largest in group), maintaining the stability of the recurring customer base. Operating CF / Net Income 1.87x and OCF / EBITDA 1.06x indicate sound cash backing of earnings; Free Cash Flow ¥26.4B covers dividends and CapEx, establishing a sustainable structure.
Progress on leverage reduction and overseas asset remediation: Debt/EBITDA 3.91x remains somewhat high, but Interest Coverage 13.3x provides sufficient interest-paying capacity; Equity Ratio improved to 40.9% (prior 37.9%). Impairments ¥12.5B this period (mainly overseas ¥9.98B) advanced the cleaning of underperforming assets, reducing Goodwill to ¥2.95B (1.0% of net assets). Mid-term reduction of interest-bearing debt and leverage on an Operating CF basis will be key to restoring financial flexibility and improving valuation.
Monitor dependence on non-operating income: Of Ordinary Income ¥64.3B, non-operating income ¥25.8B (Interest Income ¥8.1B, FX Gains ¥9.1B) contributed materially, meaning about 30.8% of Net Income is sensitive to interest and FX movements. Recurring earning power should be evaluated on the basis of Operating Income ¥48.4B, and the reproducibility of foreign exchange gains is limited. Potential yen appreciation or changes in interest rates warrant incorporating the risk of reduced non-operating income.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings announcement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions should be made at your own responsibility and, if necessary, in consultation with a professional advisor.