| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1646.0B | ¥1509.1B | +9.1% |
| Operating Income / Operating Profit | ¥91.3B | ¥79.8B | +14.3% |
| Ordinary Income | ¥93.1B | ¥85.4B | +9.1% |
| Net Income / Net Profit | ¥61.4B | ¥44.7B | +37.4% |
| ROE | 14.6% | 11.8% | - |
For the fiscal year ended March 2026, Revenue was ¥1646.0B (YoY +¥137.0B / +9.1%), Operating Income was ¥91.3B (YoY +¥11.5B / +14.3%), Ordinary Income was ¥93.1B (YoY +¥7.7B / +9.1%), and Net Income was ¥61.4B (YoY +¥16.7B / +37.4%), resulting in growth in both top- and bottom-line. Gross margin improved to 52.4% (prior year 52.1%) (+0.3pt), supported by an improved product mix and pricing strategy. Operating margin rose to 5.5% (prior year 5.3%) (+0.2pt); SG&A amounted to ¥771.0B, representing 46.8% of sales and remaining high, but growth of SG&A was contained relative to revenue growth, producing operating leverage. Although special losses of ¥19.7B (impairment ¥7.1B, loss on sale of subsidiary shares ¥10.5B, etc.) were recorded, Net Income margin improved to 3.7% (prior year 3.0%) (+0.7pt), indicating improved profitability. Versus the full-year plan, Revenue and Net Income were largely achieved (99.1%, 99.4% respectively), while Operating and Ordinary Income were short of target (91.3%, 92.3%), indicating room for improvement in expense control.
[Revenue] Revenue expanded solidly to ¥1,646.0B (+9.1%). The company operates a single Apparel Retail segment; revenue growth is attributed to an improved mix toward higher value-added products, penetration of price revisions, and refreshment of the store network. Gross margin rose to 52.4% (YoY +0.3pt), aided by reduced discounting and optimized product assortments. Gross profit amounted to ¥862.3B (+8.8%), rising in line with revenue.
[Profitability] SG&A was ¥771.0B (+9.1%), equating to 46.8% of sales and remaining high, but was contained at a similar pace to revenue growth, leaving the SG&A ratio roughly flat YoY. As a result, Operating Income improved to ¥91.3B (+14.3%) and Operating Margin improved to 5.5% (+0.2pt). Non-operating items produced a small positive contribution (interest income ¥0.1B, foreign exchange gains ¥1.5B, etc.), expanding Ordinary Income to ¥93.1B (+9.1%). Meanwhile, Special Losses totaling ¥19.7B were recorded, including impairment losses of ¥7.1B, loss on sale of subsidiary shares ¥10.5B, and loss on retirement of fixed assets ¥1.4B, bringing pre-tax income to ¥73.4B. After deducting corporate taxes and others of ¥12.3B, Net Income was ¥61.4B (+37.4%), a substantial increase, and Net Income margin improved to 3.7% (+0.7pt). In conclusion, the period achieved revenue and profit growth with improved profitability.
[Profitability] Operating Margin improved to 5.5% (prior year 5.3%) (+0.2pt), driven by higher gross margin and relative containment of SG&A. Net Income margin improved to 3.7% (prior year 3.0%) (+0.7pt), increasing earnings quality. ROE stood at 14.6%, maintaining a healthy level primarily due to improved Net Income margin. [Cash Quality] Operating Cash Flow was ¥55.5B versus Net Income of ¥61.4B, yielding an OCF/NI ratio of 0.91x, near the borderline. Cash conversion (Operating Cash Flow/EBITDA) is approximately 0.51x, a concerning level, mainly due to inventory increases (-¥40.8B) and higher tax payments (-¥37.8B) which absorbed working capital. [Investment Efficiency] Capital expenditures were ¥55.4B, about 3.0x depreciation of ¥18.3B, indicating aggressive investment to support store refresh and IT. Free Cash Flow was -¥40.8B, negative as investments exceeded OCF significantly. [Balance Sheet Strength] Equity Ratio improved to 58.9% (prior year 53.9%) (+5.0pt), strengthening the financial base. Current Ratio was 177%, in a healthy range, but Quick Ratio was 69%, indicating high dependence on inventory. Short-term borrowings increased to ¥19.0B (prior year ¥10.3B), so all interest-bearing debt is short-term in maturity structure; however, Debt/EBITDA is about 0.17x, very low, and Interest Coverage exceeds 200x, indicating minimal interest burden.
Operating Cash Flow was ¥55.5B (YoY -21.8%). While pre-tax profit of ¥73.4B plus non-cash expenses such as depreciation of ¥18.3B produced a subtotal of ¥94.8B, working capital changes absorbed cash. Inventory increase (-¥40.8B) and accounts receivable increase (-¥13.4B) were primary drains, partially offset by accounts payable increase ¥14.8B. Corporate tax payments (-¥37.8B) were also a cash outflow. Inventory turnover days remain elevated at approximately 125 days; improving inventory efficiency is key to restoring OCF. Investing Cash Flow was -¥96.3B, including CAPEX -¥55.4B, intangible asset investment -¥6.3B, long-term loans advanced -¥10.0B, and acquisition of subsidiary shares -¥2.0B. Free Cash Flow was -¥40.8B as growth investments led. Financing Cash Flow was a positive ¥8.4B, with increased short-term borrowings of ¥26.7B exceeding dividend payments of -¥18.3B. Cash and deposits declined to ¥34.6B (prior year ¥66.7B), with investments and working capital increases pressuring cash balances.
Recurring earnings are driven primarily by Operating Income of ¥91.3B with modest non-operating items, indicating high dependence on core operations. Non-operating income of ¥3.2B mainly comprised foreign exchange gains ¥1.5B and insurance dividends ¥0.3B, representing about 0.2% of Revenue and thus limited in scale. A one-off Special Loss of ¥19.7B was recorded (impairment ¥7.1B, loss on sale of subsidiary shares ¥10.5B, loss on retirement of fixed assets ¥1.4B). The gap from Ordinary Income ¥93.1B to Net Income ¥61.4B is roughly 34%, driven mainly by special losses and taxes. Accrual quality is judged neutral because Operating Cash Flow lags Net Income. Comprehensive income was ¥61.2B, broadly consistent with Net Income, with Other Comprehensive Income largely negligible (foreign currency translation adjustment ¥0.0B). Going forward, suppressing recurrence of one-off losses and normalizing inventory turnover to improve OCF will contribute to better earnings quality.
Full-year guidance is Revenue ¥1,661.8B (+1.0%), Operating Income ¥100.0B (+9.6%), Ordinary Income ¥100.8B (+8.3%), Net Income ¥61.8B, EPS ¥223.56, and dividend ¥32.00. Progress against guidance stands at Revenue 99.1%, Operating Income 91.3%, Ordinary Income 92.3%, and Net Income 99.4%—Revenue and Bottom-line broadly landed on plan, while Operating and Ordinary Income fell short. Primary causes of underperformance were limited SG&A absorption and recording of Special Losses. For the next fiscal year, improving inventory efficiency and fixed-cost control will be decisive for achieving operating-stage targets.
Annual dividend was ¥89.00 (of which Year-end ¥69.00, Q2 ¥20.00), and the payout ratio on the full-year forecast is 40.6%, a balanced level. Shares outstanding are 30,214 thousand, with treasury stock of 2,593 thousand, resulting in a weighted average shares outstanding of 27,617 thousand. Total dividends amount to approximately ¥1.85B, implying a payout ratio of about 30% against Net Income of ¥61.4B. However, Free Cash Flow was -¥40.8B this year, indicating insufficient cash coverage for dividends; dividends were funded from existing cash and increased short-term borrowings (+¥8.7B). Going forward, cash generation through improved inventory efficiency and stabilization of investment levels will be required to secure sustainable resources for shareholder returns.
Inventory efficiency deterioration risk: Inventory amounted to ¥269.4B (prior year ¥241.9B), up +11.4%, with inventory turnover days about 125 days and remaining elevated. Inventory buildup carries risks of margin erosion from discount sales and write-downs, which would pressure Operating Cash Flow. If consumer trends or weather factors further depress turnover, profitability and cash generation could deteriorate.
Short-term liquidity risk: All interest-bearing debt of ¥19.0B is short-term borrowings, concentrating maturities. Cash and deposits of ¥34.6B exceed short-term debt, but the Quick Ratio is 69%, indicating high reliance on inventory; monetization of inventory is a precondition for maintaining liquidity. If inventory liquidity declines, refinancing risk could materialize.
Potential cash outflows from asset retirement obligations: Asset retirement obligations amount to ¥41.8B, representing about 14.7% of liabilities. If store network restructuring or closures progress, one-off cash outflows for restoration costs may occur, increasing financial burden.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.5% | 4.6% (1.7%–8.2%) | +0.9pt |
| Net Income Margin | 3.7% | 3.3% (0.9%–5.8%) | +0.4pt |
Profitability exceeds the industry median; improvements in gross margin and SG&A control contributed to top-quartile positioning for both Operating and Net Income margins.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 9.1% | 4.3% (2.2%–13.0%) | +4.8pt |
Revenue growth outpaced the industry median substantially, driven by product strength and store refresh initiatives.
※ Source: Company compilation
Room to improve inventory efficiency and cash conversion: Inventory turnover days of 125 and OCF/Net Income of 0.91x lag peer leaders. Achieving inventory optimization and SKU rationalization should improve OCF and help maintain/enhance gross margin. Improving cash conversion (OCF/EBITDA) from 0.51x is the top KPI for the next fiscal year.
Realization phase for aggressive investments: CAPEX is about 3.0x depreciation, reflecting active investments in store refresh and IT. Going forward, the contribution of investments to sales productivity and smoothing investment levels will be key to improving Free Cash Flow and dividend cash coverage. The missed Operating Income guidance (91.3% progress) highlights the importance of improving expense absorption capacity.
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 particular security. Industry benchmarks are reference information compiled by the Company from publicly disclosed financial statements. Investment decisions are your responsibility; please consult a professional as needed before making any investment decisions.