| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥45.6B | ¥47.9B | -4.6% |
| Operating Income / Operating Profit | ¥-4.6B | ¥0.5B | -70.5% |
| Ordinary Income | ¥-3.5B | ¥0.4B | -53.1% |
| Net Income / Net Profit | ¥-2.8B | ¥0.0B | -6865.1% |
| ROE | -2.6% | 0.0% | - |
The Q1 results for the fiscal year ending January 2027 showed Revenue of ¥45.6B (YoY -¥2.2B, -4.6%), Operating Income of ¥-4.6B (YoY -¥5.0B, -1023.0%), Ordinary Income of ¥-3.5B (YoY -¥3.9B, -923.8%), and Net Income of ¥-2.8B (YoY -¥2.8B, -6865.1%), marking a decline in revenue and a sharp swing to losses. Revenue was driven down by the core Women’s Footwear business which fell 6.5%. Gross margin edged up to 63.2% (prior year 63.0%), but SG&A ratio jumped to 73.2% (prior year 61.9%), an 11.3pt surge, with absolute SG&A rising to ¥33.4B (prior year ¥29.6B), a 12.9% increase. An operating loss of ¥4.6B was recorded, producing an operating margin of -10.0% (prior year +1.0%), an 11.0pt deterioration. Non-operating income included ¥1.0B of foreign exchange gains, partially offsetting the loss and resulting in an Ordinary Loss of ¥3.5B. Progress against the full-year plan stands at 18.5% of Revenue (against a plan of ¥246.6B), below the standard 25%; Operating Income progress is effectively zero due to the loss. EPS deteriorated to ¥-14.53 from ¥+0.21 a year earlier. Inventory rose to ¥55.8B, up ¥5.9B (+11.8%); Accounts Receivable decreased to ¥13.2B, down ¥6.5B (-32.8%); Accounts Payable increased to ¥8.3B, up ¥3.9B (+87.1%), indicating significant working capital shifts. Equity Ratio is 80.4% and Cash & Deposits are ¥22.0B, indicating strong financial soundness, but a rapid deterioration in profitability and rigidity in cost structure have become apparent.
[Revenue] Revenue was ¥45.6B (prior year ¥47.9B, -4.6%). By segment, the core Women’s Footwear planning & sales business was ¥40.2B (prior year ¥43.0B, -6.5%), a ¥2.8B decline, representing 88.1% of consolidated sales. The Women’s Apparel planning & sales business was ¥5.4B (prior year ¥4.9B, +12.2%), up ¥0.6B and representing 11.9%, but limited in scale. The decline in Women’s Footwear weighs on consolidated revenue. Gross profit was ¥28.8B (prior year ¥30.1B, -4.1%), with a gross margin of 63.2% (prior year 63.0%), a 0.2pt improvement, but absolute gross profit declined ¥1.2B due to lower sales. The slowdown in Women’s Footwear sales is presumed to reflect weaker demand and slower inventory turnover.
[Profit & Loss] Operating loss was ¥4.6B (prior year operating income ¥0.5B), a deterioration of ¥5.0B. SG&A increased ¥3.8B to ¥33.4B (prior year ¥29.6B, +12.9%), and SG&A ratio rose sharply to 73.2% (prior year 61.9%), up 11.3pt. Despite lower sales, absolute SG&A rose significantly, indicating heavy fixed-cost burden compressing profits. By segment, Women’s Footwear Operating Income fell to ¥0.6B (prior year ¥5.5B, -88.8%), with margin down to 1.5% (prior year 12.9%), an 11.4pt decline. Women’s Apparel recorded an Operating Loss of ¥0.4B (prior year loss ¥0.6B), an almost unchanged loss. Corporate expenses (unallocated to reportable segments) were ¥4.7B (prior year ¥4.5B), further widening consolidated operating loss. Non-operating income included ¥1.0B foreign exchange gains (prior year foreign exchange gains ¥0.0B), partially offsetting the operating loss and resulting in Ordinary Loss of ¥3.5B (prior year Ordinary Income ¥0.4B). Special gains were ¥0.02B (including ¥0.05B gain from negative goodwill), and Special losses were ¥0.05B (impairment of fixed assets), with minimal net impact. Loss before tax was ¥3.6B; income taxes were -¥0.8B (deferred tax asset adjustments, etc.), resulting in Net Loss of ¥2.8B (prior year Net Income ¥0.0B). In summary, revenue declined and the company swung to a large net loss; gross margin slightly improved but a sharp increase in SG&A drove an operating loss, while foreign exchange gains temporarily cushioned the final deficit.
The Women’s Footwear planning & sales business posted Revenue of ¥40.2B (prior year ¥43.0B, -6.5%), Operating Income of ¥0.6B (prior year ¥5.5B, -88.8%), and an Operating Margin of 1.5% (prior year 12.9%). Declining sales and fixed-cost burden led to a substantial profit decline. The Women’s Apparel planning & sales business posted Revenue of ¥5.4B (prior year ¥4.9B, +12.2%), Operating Loss of ¥0.4B (prior year loss ¥0.6B), and Operating Margin of -8.2% (prior year -11.4%). While increased sales narrowed the loss, the segment remains loss-making. Women’s Footwear is the core segment accounting for 88.1% of consolidated sales; its slowdown materially affects consolidated performance. After adding corporate expenses of ¥4.7B (general administrative expenses not allocated to reportable segments), consolidated Operating Loss was ¥4.6B. The sharp deterioration in Women’s Footwear profitability (an 11.4pt decline in operating margin) and increased corporate expenses drove the segment into a consolidated loss.
[Profitability] Operating Margin -10.0% (prior year +1.0%), Net Margin -6.1% (prior year +0.1%), ROE -2.6% (prior year +0.0%, annualized roughly flat at prior-year level). Profitability deteriorated rapidly across all metrics due to the operating loss. Gross Margin 63.2% (prior year 63.0%) showed a slight improvement, but SG&A Ratio jumped to 73.2% (prior year 61.9%, +11.3pt), causing an operating loss.
[Cash Quality] Operating Cash Flow (OCF) data is not disclosed, but given an operating loss of ¥4.6B, Inventory increase ¥5.9B, Accounts Receivable decrease ¥6.5B, and Accounts Payable increase ¥3.9B, working capital movements are large. Inventories of ¥55.8B account for 42.2% of Total Assets of ¥132.3B; the speed of inventory monetization is a key cash driver. Cash & Deposits of ¥22.0B exceed Current Liabilities of ¥20.2B, maintaining short-term liquidity.
[Investment Efficiency] Total Asset Turnover 0.34x (prior year 0.36x), ROA -2.1% (prior year +0.0%) show declines in asset efficiency and profitability. The balance-sheet structure is inventory-dependent; declining sales have reduced asset turnover.
[Financial Soundness] Equity Ratio 80.4% (prior year 82.2%), D/E ratio 0.24x at a low level (interest-bearing debt is effectively zero; most of ¥5.7B fixed liabilities are retirement benefit obligations of ¥2.0B, etc.). Current Ratio 475.3% (prior year 543.7%), Quick Ratio 199.3% (prior year 271.2%) remain high, but liquidity metrics deteriorated year-on-year due to inventory increases. Financial safety remains high, but rapidly worsening profitability is pressuring capital efficiency.
Statement of Cash Flows data is not disclosed, but cash trends can be inferred from the operating loss of ¥4.6B and working capital movements. While operating loss occurred, working capital provided funds as Accounts Receivable decreased to ¥13.2B (down ¥6.5B, -32.8%) and Accounts Payable increased to ¥8.3B (up ¥3.9B, +87.1%), expanding supplier financing. Conversely, Inventories increased to ¥55.8B (up ¥5.9B, +11.8%), tying up cash. Cash & Deposits declined to ¥22.0B (prior year ¥26.2B, -¥4.2B). Operating loss and inventory increases likely depressed OCF; non-operating foreign exchange gains of ¥1.0B offered a temporary supplement, but core operating cash generation is weak. Days Inventory Outstanding (DIO) is approximately 299 days, calculated as Inventories ¥55.8B ÷ Cost of Goods Sold ¥16.8B × 90 days, up from about 254 days the prior year, indicating prolonged inventory holding and worsening inventory efficiency that constrains cash flow. Going forward, inventory reduction and restraint of cash SG&A outflows are key to improving OCF. The sharp rise in Accounts Payable suggests changes in procurement terms or payment sites and raises the risk of concentrated future cash outflows.
Against an operating loss of ¥4.6B, non-operating income of ¥1.1B (including ¥1.0B foreign exchange gains) contributed to narrowing the ordinary loss to ¥3.5B. The foreign exchange gain is largely a one-off factor, and core operating earnings are very weak. Special gains of ¥0.02B (including ¥0.05B negative goodwill) and special losses of ¥0.05B (impairment of fixed assets) had negligible impact. Comprehensive income was ¥-2.7B (Net Income ¥-2.8B adjusted by ¥0.3B currency translation adjustments and ¥-0.2B valuation difference on securities), roughly consistent with Net Income. Recurring earnings are deeply negative; excluding foreign exchange gains, operating-stage losses flow directly to final results. Gross Margin of 63.2% is slightly up from 63.0% year-over-year, indicating product competitiveness is maintained, but the SG&A Ratio surge to 73.2% (+11.3pt) is compressing margins. Dependence on non-operating foreign exchange gains is high, lowering the sustainability of earnings quality. The combination of rising inventory and falling sales raises risk of future markdowns and margin erosion; restoring earnings quality requires returning to operating profitability and normalizing inventory levels.
The full-year plan calls for Revenue of ¥246.6B (prior year ¥233.3B, +5.7%), Operating Income ¥15.0B (prior year ¥10.6B, +41.0%), Ordinary Income ¥15.0B (prior year ¥11.9B, +26.1%), and Net Income ¥8.8B (prior year ¥2.4B, +266.7%). Q1 results of Revenue ¥45.6B represent 18.5% progress (standard 25%, short by 6.5pt). Operating loss of ¥4.6B means progress toward Operating Income is effectively zero. Achieving full-year Operating Income requires ¥19.6B of Operating Income from Q2 onward, implying a quarterly turnaround to about ¥6.5B of operating profit per quarter on average. In addition to maintaining gross margin, large cost reductions are needed assuming annual SG&A of approximately ¥112B (estimated as Full-Year Revenue ¥246.6B - Operating Income ¥15.0B - assumed COGS ~¥120B). Simple annualization of Q1 SG&A ¥33.4B × 4 equals about ¥134B, indicating a sizable gap versus the plan. Improvement in inventory turnover and reduction of fixed costs are critical to meeting guidance. Dividend forecast DPS ¥8.5 is unchanged, and the implied payout ratio versus full-year EPS forecast ¥46.15 is about 18.4%. No forecast revisions were made this quarter, but given the slow progress, the guidance assumes a V-shaped recovery in the second half.
No dividend was paid this quarter; the full-year dividend forecast DPS ¥8.5 remains unchanged. With forecast full-year Net Income of ¥8.8B and estimated total dividends of about ¥1.6B, the payout ratio is about 18.4%, a conservative level. No share buybacks were announced; the return policy is dividend-only. Cash & Deposits ¥22.0B and Equity Ratio 80.4% indicate ample financial capacity and short-term ability to continue dividends. However, if full-year results are not met, the dividend policy may be reviewed. Shares outstanding are 19,083 thousand shares (Treasury stock 202 shares), limiting dilution risk. Retained earnings of ¥70.8B (prior year ¥75.1B) decreased ¥4.3B due to the net loss but remain substantial, supporting dividend funding. The policy is dividend-focused rather than total shareholder return.
Concentration risk in the core segment: The Women’s Footwear planning & sales business accounts for 88.1% of Revenue, and its Operating Margin sharply declined to 1.5% (prior year 12.9%). High dependence on the core category increases sensitivity to demand swings, meaning revenue and profit declines in that segment heavily impact consolidated results.
Inventory risk: Inventories of ¥55.8B account for 42.2% of Total Assets and rose ¥5.9B (+11.8% year-on-year). Inventory increases amid falling sales carry risks of markdowns, obsolescence, margin erosion, and delayed monetization. Days Inventory Outstanding extended to about 299 days (prior year ~254 days), and declining inventory freshness poses concerns for both profitability and cash flow.
SG&A rigidity risk: SG&A rose to ¥33.4B (prior year ¥29.6B, +12.9%) and increased in absolute terms despite falling sales, pushing the SG&A Ratio to 73.2% (+11.3pt). High fixed-cost burden and negative operating leverage imply sustained losses if sales recovery is delayed. The scope for and speed of reducing fixed costs such as personnel and rent are key to recovery.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | -10.0% | 3.4% (0.8%–7.7%) | -13.4pt |
| Net Margin | -6.1% | 2.2% (0.5%–6.2%) | -8.3pt |
Operating and Net Margins are well below industry medians, placing the company in the lowest profitability group within retail.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | -4.6% | 7.7% (0.8%–14.6%) | -12.3pt |
Revenue growth is -4.6% versus an industry median of +7.7%, trailing by 12.3pt and placing the company in a low-growth group.
※Source: Company compilation
Probability of achieving the full-year plan: Revenue progress 18.5% (below standard 25%) and operating loss lead to zero progress on Operating Income. Achieving full-year Operating Income ¥15.0B requires ¥19.6B of operating profit from Q2 onward, implying a quarterly turnaround of roughly ¥6.5B. With Q1 SG&A annualized at ~¥134B, Annual SG&A must be constrained to around ¥112B to meet the plan, requiring substantial cost correction and inventory turnover improvements in H2. The risk of missing guidance is high.
Normalization of inventory and working capital is a short-term focus: Inventories ¥55.8B (42.2% of total assets) and DIO ~299 days indicate prolonged holding. Inventory increases amid falling sales bring markdown and cash crunch risks. Receivables fell -32.8% while payables rose +87.1%, showing large shifts in working capital terms; the sharp rise in payables also suggests future concentrated payment risk. Inventory reduction and normalization of payment/collection terms are keys to improving earnings and cash flow.
Gap between profitability and financial soundness: Equity Ratio 80.4%, Cash & Deposits ¥22.0B, Current Ratio 475.3% indicate high financial safety, but ROE -2.6% and Operating Margin -10.0% show rapid deterioration in profitability. Versus industry benchmarks, Operating Margin is -13.4pt and Growth is -12.3pt, placing the company in the lower cohort. While financial capacity is strong, unless structural improvements in profitability (SG&A reductions and recovery of core segment margins) are achieved, capital efficiency will remain depressed. Short-term focus should be inventory and fixed-cost correction; medium-term focus should be rebuilding profitability in Women’s Footwear and returning Women’s Apparel to profitability.
This report was automatically generated by AI analyzing XBRL financial statement data to produce a financial analysis. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company from publicly available financial statements. Investment decisions are your responsibility; consult professionals as necessary before making investment decisions.
These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.