ASAKUMA CO.,LTD. FY2026 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥7.18B
• Operating Income: ¥324M
• Net Income: ¥215M
• EPS: ¥40.47

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Asakuma (TSE:7678) reported FY2026 Q3 standalone JGAAP results with solid top-line momentum and strong operating leverage, set against a normalized bottom line. Revenue was 71.82 (100M JPY), up 19.9% YoY, indicating robust sales recovery and/or store network contribution. Gross profit was 40.75, yielding a gross margin of 56.7%, consistent with a casual dining model but still leaving room for efficiency gains versus top-tier peers. SG&A expenses were 37.51, resulting in operating income of 3.24 and an operating margin of 4.5%. Ordinary income was 3.28, and net income came in at 2.15, with an effective tax rate of 34.6%. Despite strong operating income growth (+178.6% YoY), net income declined 49.3% YoY, likely reflecting the absence of prior-year extraordinary factors (e.g., pandemic-related subsidies or one-off gains) that had inflated the base; extraordinary items are not disclosed here, limiting precise attribution. DuPont analysis shows ROE of 6.5% built from a 3.0% net margin, 1.554x asset turnover, and 1.41x financial leverage, evidencing returns primarily driven by turnover rather than leverage. Liquidity is strong: current ratio 234.8%, quick ratio 234.8% (noting inventories are unreported), and cash of 20.62 versus current liabilities of 11.08, indicating a cash ratio comfortably above 1x. The balance sheet is conservative with total liabilities of 12.85 and equity of 32.85, implying an equity ratio of about 71.1% and low dependence on interest-bearing debt (0.66 long-term loans disclosed). Interest coverage is very high at 360.4x, consistent with minimal financial risk. Working capital stands at 14.94, with accounts receivable of 3.32 (about 4.6% of revenue), reflecting the cash-heavy nature of restaurant operations. Operating leverage was material this period: the implied incremental margin vs. YoY revenue growth is approximately 17% (based on disclosed YoY rates), underlining cost discipline and fixed-cost absorption. Cash flow statements and dividends are unreported, constraining assessment of earnings quality, free cash flow, and payout sustainability; zeros reflect unreported items, not actual zeros. EPS (basic/diluted) was 40.47 JPY, with BVPS calculated at 618.16 JPY, indicating moderate ROE and balance-sheet headroom for reinvestment. Overall, Asakuma’s Q3 profile shows improving core profitability, high liquidity, and low leverage, but reported net profit is depressed YoY due to non-operating/extraordinary normalization, and missing cash flow disclosures temper confidence in cash conversion analysis.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 3.0% (Net income 2.15 / Revenue 71.82)
• asset_turnover: 1.554x (Revenue 71.82 / Total assets 46.21)
• financial_leverage: 1.41x (Total assets 46.21 / Equity 32.85)
• calculated_ROE: 6.5% (matches reported 6.5%)
• commentary: ROE is primarily supported by respectable asset turnover and modest margins; leverage contribution is limited given a strong equity base. margin_quality:
• gross_margin: 56.7% (40.75 / 71.82)
• operating_margin: 4.5% (3.24 / 71.82)
• ordinary_margin: 4.6% (3.28 / 71.82)
• net_margin: 3.0% (2.15 / 71.82)
• takeaways: Gross margin suggests a reasonable food-cost structure but not best-in-class; SG&A ratio of ~52.2% (37.51/71.82) remains heavy, capping operating margin. Effective tax rate of 34.6% is in a normal range. operating_leverage:
• evidence: Operating income +178.6% YoY vs. revenue +19.9% YoY implies significant fixed-cost absorption.
• incremental_operating_margin_estimate: ~17.4% (ΔOP ~+2.08 vs. ΔSales ~+11.94, derived from YoY growth rates).
• implications: Continued sales growth could flow through at attractive incremental margins if cost discipline holds; however, labor and utility cost inflation remain watch points.

Growth Assessment

revenue_sustainability: Top-line growth of +19.9% YoY indicates healthy demand recovery and/or store footprint effects. With AR at 3.32 (about 4.6% of sales), revenue quality is consistent with cash-based dining operations. profit_quality: Operating income improved sharply (margin 4.5%), suggesting underlying business improvement rather than financial engineering. Net income fell 49.3% YoY, likely due to normalization of non-recurring items; extraordinary items are not disclosed, limiting precision. outlook: If same-store traffic and average ticket continue improving and cost pressures are contained, operating margins can expand further from a low base. Normalized net earnings should increasingly track operating trends absent prior-year one-offs.

Financial Health

liquidity: Current assets 26.01 vs. current liabilities 11.08 yield a current ratio of 234.8% and quick ratio of 234.8% (inventories unreported, so quick ratio may be overstated). Cash of 20.62 comfortably covers current liabilities, indicating a high cash ratio. solvency: Equity 32.85 vs. total assets 46.21 implies an equity ratio of ~71.1%. Total liabilities/equity is ~0.39x (matches the provided 'Debt-to-Equity Ratio', which appears to reflect total liabilities, not interest-bearing debt). Long-term loans are only 0.66, indicating very low financial leverage. capital_structure: Net cash position is strong at minimum ~19.96 (cash 20.62 less disclosed LT loans 0.66; ST loans unreported). Interest coverage at 360.4x further underscores low credit risk.

Cash Flow Quality

earnings_quality: Cash flow statements are unreported, so OCF/NI and FCF cannot be evaluated directly. However, low receivables relative to sales (AR ~4.6% of revenue) indicates limited credit exposure and supports cash earnings quality in a restaurant model. FCF_analysis: Capex and OCF are unreported; thus FCF cannot be computed. Balance sheet suggests ample internal liquidity to fund maintenance capex and selective growth. working_capital: Working capital is 14.94. Accounts payable of 5.62 provides supplier financing; inventories are unreported, so the cash conversion cycle cannot be measured. Overall, the model likely benefits from short cycles typical of food service.

Dividend Sustainability

payout_ratio_assessment: Dividend data (DPS, total dividends) are unreported; payout ratio and DOE cannot be calculated. EPS is 40.47 JPY with BVPS of 618.16 JPY, and retained earnings of 13.73 indicate capacity for distributions, subject to policy. FCF_coverage: Not assessable due to missing OCF/Capex. Given strong cash and low leverage, near-term liquidity for dividends appears adequate, but sustainability hinges on steady OCF. policy_outlook: Policy not disclosed here. With normalized profits post one-offs, management may prioritize reinvestment in store refurbishments and selective openings before dividend increases.

Risk Assessment

Business Risks:

• Food input cost inflation (meat, dairy, grains) compressing gross margin.
• Labor cost pressures from wage inflation and staffing constraints.
• Utility and energy price volatility impacting store-level profitability.
• Traffic sensitivity to consumer sentiment and competitive promotions.
• Execution risk in store openings/renovations and format changes.
• Supply chain disruptions affecting menu availability and costs.

Financial Risks:

• Cash flow visibility is limited due to unreported OCF and Capex.
• Potential overstatement of quick ratio because inventories are unreported.
• Interest rate changes have limited impact given low debt, but deposit yields and cash management affect non-operating income.
• Tax rate variability vs. normalized 34.6% could affect net margin.

Key Concerns:

• Net income down 49.3% YoY despite strong operating recovery, implying prior-year non-recurring tailwinds that have faded.
• SG&A intensity (~52.2% of sales) keeps operating margin modest at 4.5%.
• Lack of cash flow and dividend disclosures hinders assessment of FCF and payout sustainability.

Investment Implications

Key Takeaways:

• Strong sales growth (+19.9% YoY) with significant operating leverage (+178.6% YoY OP).
• Healthy liquidity and low leverage (equity ratio ~71%, cash 20.62 vs. CL 11.08).
• Operating margin improved to 4.5% but remains constrained by high SG&A.
• Net income down YoY likely due to normalization of one-offs; underlying operations are strengthening.
• Earnings quality appears reasonable for a cash-based restaurant model, but cash flow data are missing.

Metrics to Watch:

• Same-store sales growth and average check size.
• Food and labor cost ratios (gross margin trend and SG&A ratio).
• Operating margin progression toward/above 5%.
• Monthly disclosure cadence (if available) for traffic and sales mix.
• OCF and Capex once disclosed to assess FCF conversion and coverage.
• Store pipeline, refurbishment ROI, and any changes in format or menu strategy.

Relative Positioning: Within Japanese casual dining peers, Asakuma appears conservatively financed with strong liquidity and minimal debt, but scale is smaller and margins are mid-pack; continued recovery and cost control are key to closing the profitability gap.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis