| Metric | Current Period | YoY (Prior-Year Period) | YoY |
|---|---|---|---|
| Revenue | ¥1276.7B | ¥1224.2B | +4.3% |
| Operating Income | ¥17.4B | ¥18.9B | -7.8% |
| Ordinary Income | ¥26.4B | ¥28.4B | -7.0% |
| Net Income | ¥20.7B | ¥18.8B | +10.1% |
| ROE | 5.8% | 5.8% | - |
FY2026 Q3 consolidated results maintained revenue growth at ¥1276.7B (YoY +¥52.5B, +4.3%). Operating Income was ¥17.4B (YoY -¥1.5B, -7.8%) and Ordinary Income was ¥26.4B (YoY -¥2.0B, -7.0%), both down. Net Income increased to ¥20.7B (YoY +¥1.9B, +10.1%), mainly driven by special gains of ¥6.3B including ¥6.2B in gains on sales of marketable securities. While revenue grew, the operating margin fell to 1.4%, with SG&A of ¥117.9B weighing on profitability. Notably, short-term borrowings rose 204.7%, from ¥86.7B to ¥264.2B, increasing financial leverage.
[Profitability] ROE 5.8% (DuPont three-factor breakdown: Net Profit Margin 1.6%, Total Asset Turnover 1.16x, Financial Leverage 3.09x). The 1.4% Operating Margin declined YoY. Gross Margin 10.6%. Interest Coverage 11.23x, indicating maintained capacity to service interest. [Cash Quality] Cash and Deposits ¥71.9B, up +49.6% YoY. Cash coverage of short-term liabilities is 0.27x, indicating limited cushion. Working capital is a positive ¥64.0B. [Investment Efficiency] Total Asset Turnover 1.16x. Investment Securities increased to ¥122.1B, up +27.5%. [Financial Soundness] Equity Ratio 32.4% (down from 37.8% YoY). Current Ratio 110.0%, Quick Ratio 93.9%. Debt-to-equity ratio 2.09x, a high level. Of interest-bearing debt of ¥311.9B, short-term borrowings are ¥264.2B, accounting for 84.7%. The short-term debt ratio is 84.7%, indicating a mismatch in the maturity structure.
Cash and Deposits increased by +¥23.8B from ¥48.1B to ¥71.9B, with increased operating profit and financing activities contributing to cash accumulation. However, short-term borrowings increased significantly by +¥177.5B, reflecting expanded working capital needs or funding for investments. Investment Securities increased by +¥26.3B, indicating expansion of asset management. Accounts Receivable stand at ¥281.3B and Inventories at ¥103.5B, with working capital at a positive ¥64.0B, suggesting rising working capital requirements alongside business expansion. Total short-term liabilities are ¥643.1B, and the ratio to Cash and Deposits is 0.27x, indicating limited liquidity buffer. Accounts Payable are ¥222.7B, flat YoY, showing no major change in use of supplier credit. Reliance on short-term borrowings has strengthened, warranting close monitoring of the refinancing cycle.
Against Ordinary Income of ¥26.4B, Operating Income is ¥17.4B, implying a net non-operating increase of approximately ¥9.0B. Non-operating income of ¥12.4B was recorded, likely consisting mainly of equity in earnings of affiliates and financial income. Non-operating income accounts for roughly 1.0% of Revenue. Special gains total ¥6.3B, of which gains on sales of marketable securities account for ¥6.2B, the majority. Profit before income taxes is ¥31.0B, and the increase in Net Income to ¥20.7B is largely attributable to special gains. The structure in which Net Income rose 10.1% while Operating Income declined 7.8% YoY depends on non-operating and special factors, indicating that core profitability has not improved. While Operating Cash Flow (OCF) is not disclosed and direct cash backing cannot be confirmed, given the increase in Cash and Deposits and the sharp rise in short-term borrowings, liquidity may be being secured more through financing than through cash conversion of earnings.
[Positioning within the Industry] (Reference information - Our research) Profitability: The 1.4% Operating Margin is below the industry median of 2.8% (IQR: 1.2%–3.5%), placing the company in the lower tier within the industry. The 1.6% Net Profit Margin is roughly in line with the industry median of 1.8% (IQR: 0.9%–3.3%). ROE 5.8% exceeds the industry median of 4.0% (IQR: 2.1%–8.7%), driven by high Financial Leverage of 3.09x Soundness: The Equity Ratio of 32.4% is well below the industry median of 47.3% (IQR: 41.8%–53.2%), placing the company low within the industry. The Current Ratio of 110.0% is below the industry median of 184.0% (IQR: 161.0%–231.0%), indicating that liquidity headroom is limited even in industry comparison Efficiency: Revenue growth of 4.3% exceeds the industry median of 1.1% (IQR: -5.7%–8.6%), with relatively favorable growth within the industry. Return on Assets, calculated from the company’s data, is approximately 1.9%, roughly in line with the industry median of 2.2% (IQR: 1.0%–4.0%) (Industry: Wholesale Trade (N=14 companies), Comparison universe: FY2025 Q3 reporting period, Source: Our aggregation)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not constitute a recommendation to invest in any particular security. The industry benchmarks are reference information compiled by our firm based on publicly available financial statements. Investment decisions are your own responsibility; please consult a professional as needed before making any decisions.