SHOBIDO Corporation FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥22.12B
• Operating Income: ¥1.47B
• Net Income: ¥874M
• EPS: ¥74.03

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

Shobido Co., Ltd. (7819) reported FY2025 Q4 consolidated results under JGAAP showing solid top-line growth and pronounced operating leverage. Revenue grew 5.7% YoY to ¥22.122bn, while operating income rose 45.5% YoY to ¥1.469bn, indicating significant margin expansion. Gross profit of ¥5.504bn implies a gross margin of 24.9%, reflecting stable pricing and/or improved product mix and sourcing efficiency. Operating margin improved to approximately 6.6%, up meaningfully from an estimated ~4.8% in the prior year, given revenue and operating income growth differentials. Ordinary income was ¥1.478bn and net income ¥0.977bn, translating to a net margin of 4.42%, consistent with the company’s DuPont-calculated ROE of 12.51%. Asset turnover of 1.355 and financial leverage of 2.09 underpin the ROE, with efficiency a notable contributor. EBITDA of ¥1.673bn (7.6% margin) and interest coverage of roughly 53x highlight a manageable non-cash expense burden and low financing risk. Cash generation is sound: operating cash flow (OCF) of ¥0.918bn represents 0.94x net income, and free cash flow (FCF) was positive at ¥1.132bn. Liquidity appears comfortable with a current ratio of 188% and quick ratio of 155%, underpinned by working capital of ¥4.846bn. The balance sheet is conservatively structured, with total liabilities of ¥7.852bn against total equity of ¥7.81bn; equity to assets is roughly 47.8% based on reported totals, despite a disclosed equity ratio placeholder of 0.0%. Inventory stood at ¥1.816bn; with cost of sales at ¥15.415bn, implied inventory turnover is about 8.5x (≈43 days), suggesting healthy inventory discipline. Financing cash outflows of ¥0.507bn suggest net debt repayment or other financing uses; however, dividend data are not disclosed (DPS shows as 0.00, treated as unreported). Tax expense was ¥0.294bn; while an effective tax rate is reported as 0.0% in the calculated metrics section, the income tax charge indicates a normalized tax burden likely in the ~20–23% range based on available figures. Overall, results indicate improved profitability quality, strong cost control, and prudent financial management, albeit with some disclosure gaps (e.g., cash balance, equity ratio, share data, dividends). The outlook hinges on sustaining revenue growth, maintaining gross margin resilience, and preserving working capital discipline to keep FCF positive. While leverage is moderate, the company’s high interest coverage and solid liquidity buffer mitigate near-term solvency risk.

Profitability Analysis

ROE_decomposition: ROE 12.51% = Net margin 4.42% × Asset turnover 1.355 × Financial leverage 2.09. Efficiency (asset turnover) and moderate leverage complement an improving margin profile to deliver double-digit ROE. margin_quality: Gross margin 24.9% reflects stable pricing and/or mix benefits; operating margin of ~6.6% improved markedly YoY (estimated prior-year ~4.8%). Net margin at 4.42% is consistent with the sector profile for branded/ODM consumer goods with retail customers, supported by low interest burden (interest expense ¥27.7m). operating_leverage: Revenue +5.7% YoY vs operating income +45.5% YoY indicates significant operating leverage from fixed-cost absorption and SG&A efficiency. EBITDA margin at 7.6% versus operating margin ~6.6% suggests modest D&A drag, amplifying sensitivity of EBIT to top-line growth.

Growth Assessment

revenue_sustainability: Top-line grew to ¥22.122bn (+5.7% YoY). Sustainability will depend on consumer demand in core channels, product renewal cycles, and distribution breadth. The growth rate suggests healthy end-market conditions and/or share gains. profit_quality: Operating income outpaced sales growth, indicating structural cost improvements or favorable mix. Gross margin at 24.9% and interest coverage ~53x support the quality of earnings. OCF/NI of 0.94 indicates earnings largely backed by cash. outlook: With improved margins and efficient asset use (asset turnover 1.355), maintaining mid-single-digit sales growth could support continued double-digit ROE. Watch for potential normalization in operating leverage and any input cost volatility that could pressure gross margin.

Financial Health

liquidity: Current ratio 188.3% and quick ratio 155.2% indicate ample short-term liquidity. Working capital is ¥4.846bn, providing a buffer for seasonal needs. solvency: Total liabilities ¥7.852bn vs equity ¥7.81bn; implied equity ratio ~47.8% (equity/total assets), despite the reported placeholder of 0.0%. Debt-to-equity ~1.01x is moderate, and interest coverage ~53x suggests low refinancing risk. capital_structure: Leverage is balanced, with manageable interest burden (¥27.7m). Ordinary income closely tracks operating income, implying limited reliance on non-operating gains.

Cash Flow Quality

earnings_quality: OCF/Net income at 0.94 indicates earnings are substantially cash-backed, with limited accrual buildup. FCF_analysis: FCF was positive at ¥1.132bn, supported by ¥0.918bn OCF and net investing inflows (reported investing CF ¥+0.214bn). While investing cash flow can include non-recurring items, the positive FCF provides flexibility for debt reduction or shareholder returns. working_capital: Inventories ¥1.816bn vs COGS ¥15.415bn implies inventory turnover ~8.5x (~43 days), consistent with disciplined working capital management. Stable WC is a key driver of OCF sustainability.

Dividend Sustainability

payout_ratio_assessment: Reported DPS and payout ratio are placeholders (0.00), so dividend levels are not disclosed. EPS is ¥74.03, providing capacity for dividends should the company choose to distribute. FCF_coverage: With FCF of ¥1.132bn, dividend coverage capacity appears strong in principle; however, actual dividend outlay is undisclosed, preventing precise coverage analysis. policy_outlook: Given improved profitability and healthy liquidity, the company has room to consider distributions while funding growth; actual policy cannot be assessed from the provided data.

Risk Assessment

Business Risks:

• Demand volatility in consumer/retail channels impacting order volumes and pricing
• Input cost fluctuations (materials, logistics) affecting gross margins
• Product cycle and inventory obsolescence risk in fast-moving categories
• Customer concentration risk if key retail partners account for a large sales share
• Competitive pressure from domestic and overseas OEM/ODM peers

Financial Risks:

• Potential working capital swings affecting OCF despite solid current ratios
• Exposure to interest rate normalization on floating-rate debt, albeit mitigated by low interest burden
• Foreign exchange risk on sourcing/imports if applicable to COGS
• Reliance on continued operating leverage to sustain margins

Key Concerns:

• Sustainability of margin expansion after a strong leverage-driven year
• Limited visibility on dividend policy and shareholder return framework
• Some disclosure gaps (cash balance, equity ratio, share count) constrain per-share and capital allocation analysis

Investment Implications

Key Takeaways:

• Solid top-line growth (+5.7% YoY) with outsized operating profit growth (+45.5% YoY) evidences operating leverage
• Healthy margins: gross margin 24.9%, operating margin ~6.6%, net margin 4.42%
• Robust efficiency and returns: asset turnover 1.355, ROE 12.51%, interest coverage ~53x
• Sound liquidity and moderate leverage: current ratio 188%, quick ratio 155%, D/E ~1.01x
• Positive cash generation: OCF/NI 0.94 and FCF ¥1.132bn support balance sheet flexibility

Metrics to Watch:

• Gross margin trajectory and input cost pass-through
• OCF/Net income ratio and inventory days to gauge cash conversion
• Operating margin sustainability as sales growth normalizes
• Leverage metrics (D/E, interest coverage) amid any financing changes
• Actual dividend declarations and total shareholder return framework

Relative Positioning: Within consumer goods/ODM peers on the TSE, the company demonstrates above-average operating leverage realization, solid asset efficiency, and conservative balance sheet positioning, supporting a competitive ROE profile.

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
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