Iceco Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥30.78B
• Operating Income: ¥704M
• Net Income: ¥448M
• EPS: ¥114.80

Income Statement

Balance Sheet

Cash Flow Statement

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

For FY2026 Q2 (JGAAP, non-consolidated), 株式会社アイスコ delivered steady topline growth and outsized profit improvement, reflecting operating leverage and cost control. Revenue rose 5.7% YoY to ¥30,776 million, while operating income increased 27.7% YoY to ¥704 million, expanding the operating margin to approximately 2.3%. Gross profit reached ¥5,077 million with a gross margin of 16.5%, indicating modest improvement or stable procurement and pricing discipline in a thin-margin format. Ordinary income was ¥708 million and net income ¥448 million, translating to a net margin of 1.46%. DuPont analysis indicates ROE of 10.53%, driven by tight net margins, high asset turnover of 1.516x, and meaningful financial leverage of 4.77x. EBITDA was ¥877 million and interest expense just ¥10 million, producing a strong interest coverage of 67.5x and suggesting limited near-term interest burden. Operating cash flow was robust at ¥1,472 million, 3.29x net income, implying healthy earnings quality and favorable working capital dynamics. Liquidity is tight: the current ratio is 93.6% and working capital is negative ¥663 million, a structure that can be typical for food/convenience retail models but still warrants monitoring. Balance sheet leverage is significant with total liabilities/equity at 3.18x; however, a computed equity ratio of roughly 21% (equity/assets) provides context despite the reported zero equity ratio field being undisclosed. Dividend outflows are currently nil (DPS ¥0), preserving cash for operations and investment. The effective tax rate shown as 0.0% appears to reflect disclosure limitations; based on income tax of ¥205 million and net income of ¥448 million, the implied tax rate is consistent with a normal range after considering potential non-operating/extraordinary items. Revenue growth outpaced expense growth, signaling positive operating leverage and potential SG&A efficiency gains. Asset turnover remains a key contributor to ROE, consistent with a high-throughput, low-margin business model. With Investing CF undisclosed, free cash flow cannot be reliably computed; nevertheless, high OCF provides a cushion against near-term liquidity pressure. Overall, the company shows improving profitability, strong cash conversion, but constrained liquidity and reliance on short-term liabilities, which should be contextualized within sector norms. Data limitations (zeros indicating undisclosed items) require caution in interpreting inventory, capex, and certain cash flow lines, but available metrics suggest momentum in earnings and sound interest coverage.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 1.46%
• asset_turnover: 1.516
• financial_leverage: 4.77
• calculated_ROE: 10.53%
• commentary: ROE is primarily supported by efficient asset use and leverage, as margins remain structurally slim. margin_quality:
• gross_margin: 16.5%
• operating_margin: 2.3% (¥704m / ¥30,776m)
• ordinary_margin: 2.3% (¥708m / ¥30,776m)
• net_margin: 1.46%
• assessment: Gross margin and OPM appear stable to slightly improved; cost discipline and sales mix likely aided the 27.7% YoY OI increase against 5.7% revenue growth. operating_leverage:
• revenue_growth_yoy: 5.7%
• operating_income_growth_yoy: 27.7%
• interpretation: Positive operating leverage evident; fixed cost absorption and SG&A efficiency are improving.

Growth Assessment

revenue_sustainability: Topline growth of 5.7% YoY is consistent with modest underlying demand and/or store network contribution typical for food and convenience retail. Sustainability will hinge on same-store sales, price/mix, and store rollout. profit_quality: Operating income outpaced revenue, suggesting improved cost structure and mix; net margin remains thin, consistent with the format, but OCF/NIC ratio of 3.29 indicates good earnings-to-cash conversion. outlook: With interest burden low and operating efficiency improving, incremental margin expansion is plausible if sales momentum persists. However, tight liquidity and reliance on short-term liabilities could constrain aggressive growth if working capital needs rise.

Financial Health

liquidity:

• current_ratio: 93.6%
• quick_ratio: 93.6% (inventories undisclosed)
• working_capital: ¥-662.9m
• commentary: Below-1.0 current ratio and negative working capital are manageable if payables funding is stable and cash conversion remains strong; still a monitoring point. solvency:
• total_assets: ¥20,301m
• total_liabilities: ¥13,518m
• total_equity: ¥4,254m
• debt_to_equity: 3.18x (using total liabilities/equity)
• equity_ratio_computed: ≈21.0% (¥4,254m / ¥20,301m)
• interest_coverage: 67.5x
• commentary: Leverage is meaningful but interest burden is light; solvency appears adequate with improving profitability. capital_structure: Funding skewed to liabilities, likely including short-term borrowings and trade payables. Under JGAAP, lease capitalization may be limited, so economic leverage could be higher than book ratios suggest.

Cash Flow Quality

earnings_quality: OCF of ¥1,472m versus net income of ¥448m (3.29x) indicates strong cash realization, likely aided by non-cash charges (D&A ¥173m) and working capital inflows. free_cash_flow_analysis: Investing CF is undisclosed (reported as 0). Without capex detail, FCF cannot be determined reliably; OCF strength suggests capacity to fund maintenance capex, but growth capex needs are unknown. working_capital: Negative working capital is typical for the sector; OCF strength suggests effective payables and receivables management this period.

Dividend Sustainability

payout_ratio_assessment: Annual DPS is ¥0 with a 0.0% payout ratio, implying full earnings retention. FCF_coverage: Not assessable due to undisclosed Investing CF; reported 0.00x reflects missing data rather than true coverage. policy_outlook: With improving earnings but tight liquidity, a conservative dividend stance is consistent. Future distributions would depend on sustained OCF strength, visibility on capex, and balance sheet headroom.

Risk Assessment

Business Risks:

• Thin operating margins in food/convenience retail heighten sensitivity to cost inflation.
• Labor cost pressures, including minimum wage hikes, could compress margins.
• Energy and logistics cost volatility affecting store operations and distribution.
• Competitive intensity and price promotion from larger chains.
• Execution risk in store opening/closure and format optimization.
• Supply chain disruptions impacting availability and waste/shrink.

Financial Risks:

• Tight liquidity with current ratio below 1.0 and negative working capital.
• Refinancing/rollover risk if short-term borrowings fund operations.
• Potential interest rate risk, even if current interest expense is low.
• Possible off-balance lease and contractual commitments under JGAAP.
• Limited buffer if cash balances are low (cash line undisclosed).

Key Concerns:

• Sustainability of operating leverage if sales growth moderates.
• Dependency on payables financing to support working capital.
• Lack of visibility on capex and investing cash flows.

Investment Implications

Key Takeaways:

• Revenue +5.7% YoY with operating income +27.7% indicates improving operating efficiency.
• ROE 10.53% supported by high asset turnover (1.516x) and leverage (4.77x).
• Strong cash conversion (OCF/NI 3.29x) despite thin net margin (1.46%).
• Liquidity remains tight (current ratio 93.6%, working capital ¥-663m).
• Interest coverage is robust at 67.5x, mitigating near-term rate sensitivity.
• Equity ratio computed around 21%, despite the undisclosed reported field.

Metrics to Watch:

• Same-store sales growth and basket size/mix
• Gross margin and SG&A-to-sales ratio
• Operating margin trajectory and EBITDA per store
• Working capital cycles: receivables and payables days
• Capex and store count changes (to assess FCF and growth runway)
• Debt maturity profile and short-term borrowing levels
• OCF consistency and conversion ratio

Relative Positioning: Within Japan’s food and convenience retail ecosystem, the company exhibits typical thin margins but favorable asset turnover and improving operating leverage; ROE is respectable for the segment, though liquidity is somewhat weaker than larger peers with deeper balance sheets.

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