| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥169.9B | ¥152.6B | +11.4% |
| Operating Income / Operating Profit | ¥21.1B | ¥18.7B | +13.0% |
| Ordinary Income | ¥21.2B | ¥18.7B | +13.4% |
| Net Income / Net Profit | ¥14.4B | ¥12.7B | +13.4% |
| ROE | 5.7% | 5.1% | - |
FY2027 Q1 results delivered revenue of ¥169.9B (YoY +¥17.3B +11.4%), Operating Income of ¥21.1B (YoY +¥2.4B +13.0%), Ordinary Income of ¥21.2B (YoY +¥2.5B +13.4%), and Net Income of ¥14.4B (YoY +¥1.7B +13.4%), achieving growth in both sales and profit. Operating margin improved to 12.4% from 12.3% in the prior-year period (+0.1pt), driven by a reduction in SG&A ratio to 56.3% (improved 1.2pt from 57.5%), which supported profit expansion. Conversely, gross margin fell to 68.8% from 69.7% (down 0.9pt), reflecting upward pressure from raw material and energy costs. Progress against the full-year plan (Revenue ¥670B, Operating Income ¥68B) stands at 25.4% for Revenue and 31.1% for Operating Income, indicating profit progress ahead of schedule. Total assets are ¥349.4B, Net Assets ¥252.7B, Equity Ratio 72.3%, demonstrating a solid financial base, with ample liquidity of Cash and Deposits of ¥119.7B.
[Revenue] Revenue was ¥169.9B, up 11.4% YoY. Recovery in customer numbers and price revisions likely contributed. Cost of sales was ¥53.1B, up from ¥46.3B last year (+14.7%), rising faster than sales growth (+11.4%) and leading to a gross margin decline to 68.8% (-0.9pt). Increases in input costs such as food ingredients and energy pushed the cost ratio up, necessitating continued price pass-through and menu-mix optimization.
[Profitability] SG&A was ¥95.7B, up from ¥87.6B (+9.2%), growing at a lower rate than sales and improving the SG&A ratio by 1.2pt to 56.3%. Labor efficiency and operational improvements contributed to cost control, resulting in Operating Income of ¥21.1B (+13.0%) and Operating Margin of 12.4%. Non-operating income was ¥0.4B (including Interest Income ¥0.1B) and non-operating expenses were ¥0.3B, both minor, maintaining an operating-centric earnings structure. Ordinary Income was ¥21.2B (+13.4%). Pre-tax income of ¥21.2B incurred Corporate Taxes and Others of ¥6.8B (effective tax rate 32.3%), resulting in Net Income of ¥14.4B (+13.4%). Extraordinary losses were limited to Loss on Disposal of Fixed Assets of ¥0.29B, so one-off impacts were small. In conclusion, improvements in SG&A efficiency drove revenue and profit growth.
[Profitability] Operating Margin was 12.4%, up 0.1pt from 12.3% a year ago; Net Margin was 8.5%, up 0.2pt from 8.3%. Gross Margin of 68.8% declined 0.9pt from 69.7%, indicating cost pressures, but a 1.2pt improvement in SG&A ratio (56.3%) helped sustain profit margins. ROE was 5.7% (annualized), decomposed as Net Margin 8.5% × Total Asset Turnover 0.49 × Financial Leverage 1.38, indicating a profit-margin-driven return profile. [Cash Quality] Operating Cash Flow data is undisclosed, but Cash and Deposits ¥119.7B plus Short-term Securities ¥10.0B amount to ¥129.7B of liquidity. Current Ratio 225.6% and Quick Ratio 225.6% indicate very strong short-term payment capacity. [Investment Efficiency] Total Asset Turnover is 0.49x (annualized 1.95x), a standard asset efficiency level for retail. [Financial Soundness] Equity Ratio 72.3% and Debt-to-Equity Ratio 0.38x indicate low leverage and high financial stability. Asset retirement obligations of ¥17.8B are recorded against tangible fixed assets of ¥109.0B, representing 18.4% of total liabilities ¥96.7B, which is a noteworthy item regarding future store restoration costs.
Operating Cash Flow data is undisclosed, but with Operating Income of ¥21.1B and improved SG&A ratio, business cash generation appears solid. In working capital, Accounts Receivable rose to ¥27.7B (YoY +¥4.6B, +20.1%), indicating cash tied up with sales expansion. Bonus provisions increased to ¥9.4B from ¥5.7B (YoY +¥3.7B, +64.7%), suggesting higher future cash outflows for personnel costs. Tangible fixed assets increased to ¥109.0B from ¥105.8B (+¥3.2B), reflecting continued store maintenance and renewal investment. Investment securities fell to ¥2.8B from ¥12.7B (−¥9.9B, −78.0%), but Short-term Securities of ¥10.0B were newly recorded, implying a portfolio reallocation favoring liquidity. With Cash and Deposits of ¥119.7B, available liquidity is sufficient to cover dividends and routine capital expenditure. Free Cash Flow is not estimable, but low leverage and high liquidity suggest maintained financial flexibility.
Earnings quality is high. Non-operating income ¥0.4B and non-operating expenses ¥0.3B are both less than 0.2% of Revenue and immaterial, indicating an earnings structure reliant on core operating profit. Financial income is limited (Interest Income ¥0.1B, Dividend Income ¥0.006B). Extraordinary losses are limited to Loss on Disposal of Fixed Assets ¥0.29B, so one-off impacts are minor. The difference between Ordinary Income ¥21.2B and Net Income ¥14.4B is mainly Corporate Taxes and Others ¥6.8B (effective tax rate 32.3%), a structural factor. Approximately 100% of Operating Income is maintained as Ordinary Income, reflecting a highly repeatable earnings base. A large increase in bonus provisions (+64.7%) indicates conservative expense recognition and confirms accounting prudence.
Full-year plan: Revenue ¥670B (YoY +7.6%), Operating Income ¥68B (YoY +3.3%), Ordinary Income ¥68B (YoY +3.2%), Net Income ¥45B (YoY −4.9%). Q1 progress rates are Revenue 25.4% (near the standard 25%), Operating Income 31.1% (standard +6.1pt), Ordinary Income 31.2% (standard +6.2pt), Net Income 31.9% (standard +6.9pt), indicating profit progress ahead of schedule. SG&A ratio improvement supported profit upside while absorbing cost increases. The full-year Net Income plan showing −4.9% YoY suggests a conservative assumption incorporating tax burden or one-off items, creating a notable gap with the Q1 outperformance (+13.4%). Depending on cost trends and labor costs from Q2 onward, there is potential for upward revision of the full-year forecast.
Full-year dividend forecast is ¥26 per share (interim undecided, assuming year-end ¥26), an increase of ¥3 from last year’s ¥23. With issued shares of 38,147 thousand minus treasury shares 2,144 thousand, the year-end shares outstanding are approximately 36,003 thousand, implying an annual dividend payout of about ¥0.94B. Dividend Payout Ratio against full-year Net Income forecast ¥45B is approximately 20.8%, a conservative level. Annualizing Q1 Net Income ¥14.4B ×4 equals ¥57.6B, which on a realized basis would further increase dividend capacity. With Cash and Deposits ¥119.7B, dividend cash coverage is robust and the dividend-increase policy appears sustainable. No share buyback was disclosed; shareholder returns are dividend-centric.
Raw material & energy price fluctuation risk: Gross Margin fell to 68.8% (YoY −0.9pt), and Cost of Sales ratio increased (31.2% → 31.2% → effectively 31.3%). If food and energy costs remain elevated, the ability to absorb via price revisions or menu-mix optimization may be constrained, pressuring Operating Margin. Raw material inventory is ¥0.69B and small, making the company sensitive to procurement price volatility.
Labor cost inflation risk: Bonus provisions rose to ¥9.4B from ¥5.7B (YoY +64.7%), indicating rising labor cost pressure. Although SG&A ratio improved by 1.2pt in Q1, bonus payments and labor cost increases could accelerate from Q2 onward, reversing SG&A ratio improvements and interrupting the improvement trend in Operating Margin.
Asset retirement obligation burden risk: Asset retirement obligations ¥17.8B represent 18.4% of total liabilities ¥96.7B, indicating relatively large future cash outflows for store closures and restoration. Accelerated store network restructuring or exits of unprofitable stores could cause temporary downward pressure on profits and cash flow, constraining growth investment and shareholder returns.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 12.4% | 3.4% (0.8%–7.7%) | +9.1pt |
| Net Margin | 8.5% | 2.2% (0.5%–6.2%) | +6.2pt |
Operating Margin 12.4% and Net Margin 8.5% substantially exceed the retail industry median, indicating a high-profitability profile.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 11.4% | 7.7% (0.8%–14.6%) | +3.7pt |
Revenue growth of 11.4% exceeds the median 7.7%, maintaining a relatively high growth pace within the industry.
※ Source: Company compilation
Sustainability of the profit-uptrend from SG&A efficiency: SG&A ratio improved 1.2pt to 56.3%, supporting Operating Margin of 12.4%. Operational efficiencies and scale benefits contributed, but the large increase in bonus provisions (+64.7%) is a leading indicator of labor cost pressure and Q2 onward SG&A ratio trends will be key to sustaining profit growth.
Gross margin decline and cost-response capability: A 0.9pt decline in gross margin signals rising raw material and energy costs, requiring continued price revisions and menu-mix optimization. Although Q1 profit progress exceeds 31%, changes in cost environment could determine H2 margin performance.
Financial capacity from low leverage and high liquidity: Equity Ratio 72.3% and Cash ¥119.7B provide ample capacity for dividend increases (¥26, Payout Ratio 20.8%) and growth investment. Asset retirement obligations ¥17.8B (18.4% of total liabilities) present a cash-out risk in case of store restructuring, but current financial strength appears sufficient to absorb this.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial report 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 own responsibility; consult a professional advisor as necessary before making investment decisions.