GLOBERIDE,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥65.57B
• Operating Income: ¥4.89B
• Net Income: ¥3.93B
• EPS: ¥170.85

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Verdict: A mixed FY2026 Q2—topline was essentially flat and operating margin compressed slightly, but ordinary and net profit rose on non-operating tailwinds and a lower below-the-line burden. Revenue grew 0.5% YoY to 655.73, while operating income slipped 2.4% YoY to 48.93, implying limited operating leverage. Ordinary income increased 5.3% YoY to 50.94, aided by net non-operating gains (income 5.71 vs expenses 3.70). Net income rose 18.1% YoY to 39.28, with EPS at 170.85 JPY. Gross margin was 38.7%, and operating margin was 7.47%. Operating margin compressed by roughly 21 bps YoY (from ~7.68% to 7.47%). Ordinary margin expanded by about 35 bps YoY (to ~7.77%), reflecting positive non-operating contribution. Net margin improved by roughly 89 bps YoY to ~6.0%, driving the stronger bottom line. Balance sheet liquidity is strong: current ratio 244% and quick ratio 131%, with equity ratio around 55% (calculated: 625.4/1,133.78). Interest coverage is solid at 17.7x, and leverage remains conservative (liabilities-to-equity 0.81x). However, ROIC is 4.4%, below the 5% warning threshold, signaling capital efficiency challenges. Working capital intensity remains heavy with inventories at 340.97 versus accounts payable at 58.13, weighing on asset turnover (0.578). Earnings quality cannot be confirmed as operating cash flow data is unreported; the OCF/NI ratio is not calculable. Comprehensive income (21.72) is materially below net income (39.28), indicating OCI losses (likely FX translation or valuation losses) that reduce equity despite higher net profit. Forward-looking, margin stabilization, inventory normalization, and improving ROIC above 5–7% will be key to underpinning sustainable EPS and potential shareholder returns.

Profitability Analysis

ROE decomposition (DuPont): ROE = Net Profit Margin × Asset Turnover × Financial Leverage = 6.0% × 0.578 × 1.81 ≈ 6.3% (matches reported). The biggest driver of YoY improvement in ROE is the higher net profit margin (+~89 bps), while asset turnover appears constrained by high inventories and financial leverage is moderate and stable. Operating profit declined despite flat sales, suggesting SG&A and/or cost pressures offset gross profit; non-operating items then bridged ordinary profit higher (non-operating income 5.71 vs expenses 3.70). Business drivers: non-operating tailwinds included dividend income (1.01) and interest income (0.35), alongside a relatively modest interest expense (2.76), improving ordinary results even as operating margin compressed. Sustainability: the margin uplift at the net level appears partly non-operating and thus less repeatable; without cost discipline or better mix/pricing, operating margin resilience remains uncertain. Asset turnover at 0.578 reflects a working-capital-heavy model (inventory 340.97), a structural drag on ROE unless inventory turns improve. Watch for any SG&A growth outpacing revenue—SG&A is high at 31.2% of sales (204.70/655.73), which limits operating leverage in low-growth conditions.

Growth Assessment

Topline growth was modest at +0.5% YoY, indicating stable demand but limited expansion. Operating income declined 2.4% YoY, reflecting mild margin compression despite stable gross margin territory. Ordinary and net profit grew +5.3% and +18.1% YoY, respectively, boosted by non-operating gains and a lighter below-the-line load. Profit quality is mixed: operating momentum softened, while bottom-line growth relied on items outside of core operations. With inventories elevated and asset turnover low, growth likely depends on channel normalization, product mix upgrades, and disciplined promotions. Outlook hinges on cost pass-through, FX effects on overseas sales, and restraint on SG&A. Near term, ordinary profit may remain supported if interest income/dividends persist, but a sustainable uptrend requires operating margin improvement and working capital normalization.

Financial Health

Liquidity is strong: current ratio 243.8% and quick ratio 131.1%; no warning on current ratio. Solvency is healthy with liabilities-to-equity of 0.81x and a calculated equity ratio of ~55.1%. Interest coverage is strong at 17.73x; no near-term servicing risk identified. Short-term loans total 138.47 against robust current assets (737.71) and cash of 98.21; maturity mismatch risk appears low given ample receivables (170.46) and inventory (340.97), though inventory liquidity is inherently less certain. Total loans (short + long) are 258.68; net debt is roughly ~160.5 after cash, still manageable versus equity. No off-balance sheet obligations are disclosed in the provided data.

Cash Flow Quality

OCF is unreported, so OCF/Net Income and FCF cannot be calculated; earnings quality cannot be validated from a cash perspective. Given the high inventory balance relative to payables, working capital could be a swing factor for OCF; improvements in inventory turns would support cash conversion, while further builds would pressure OCF. With capex and dividend cash data unreported, we cannot assess FCF coverage of shareholder returns. No explicit signs of working-capital manipulation are observable from the limited data, but monitoring inventory movements versus sales will be important.

Dividend Sustainability

Payout ratio is calculated at 48.9%, within a generally sustainable range (<60%), but DPS and total dividends are unreported. Without OCF and FCF, cash coverage of dividends cannot be assessed. Balance sheet strength (equity ratio ~55%, strong liquidity) provides some buffer for dividends, but sub-5% ROIC and inventory intensity suggest careful capital allocation is needed. Policy outlook will depend on visibility of OCF recovery and progress in raising ROIC toward or above 7%.

Risk Assessment

Business Risks:

• Inventory risk: high inventory (340.97) versus payables (58.13) could lead to markdowns or cash flow drag if demand softens.
• Margin pressure from SG&A intensity (31.2% of sales) amid modest sales growth.
• Product/mix and pricing risk in core categories if competitive promotions increase.
• Foreign exchange volatility affecting overseas revenue and translation of earnings.
• Supply chain and input cost variability impacting gross margin.

Financial Risks:

• Dependence on non-operating gains to lift ordinary profit; less repeatable than core earnings.
• Short-term debt reliance (138.47) exposes to interest rate and rollover risk, albeit mitigated by strong liquidity.
• ROIC at 4.4% below cost-of-capital benchmarks, risking value dilution if not improved.
• OCI volatility: comprehensive income (21.72) significantly below net income (39.28), indicating valuation/FX impacts to equity.

Key Concerns:

• Operating margin compression (~21 bps) despite flat sales suggests limited operating leverage.
• Low asset turnover (0.578) due to heavy working capital ties down ROE and ROIC.
• Earnings quality uncertain due to unreported OCF and capex; FCF sustainability not verifiable.
• Capital efficiency flagged (ROIC 4.4% < 5%).

Investment Implications

Key Takeaways:

• Stable revenue but modest operating margin compression; bottom-line growth driven by non-operating items.
• Liquidity and coverage metrics are strong; balance sheet supports resilience.
• ROIC below 5% is the key structural weakness; asset turnover and margin improvement are needed.
• Comprehensive income lagging net income highlights equity volatility (likely FX/valuation).
• Working capital normalization, especially inventories, is central to improving OCF and ROIC.

Metrics to Watch:

• Operating cash flow and OCF/NI once disclosed (target >1.0).
• Inventory levels and turns versus sales growth.
• Gross and operating margin trajectory, including SG&A ratio.
• Non-operating income/expense mix and interest expense trend.
• ROIC progression toward >7% and asset turnover improvement.

Relative Positioning: Versus domestic consumer durables peers, Globeride shows solid liquidity and coverage but lags on capital efficiency (ROIC 4.4%). Profit growth this quarter leaned more on non-operating contributions than core operations, leaving it slightly weaker on quality of earnings relative to peers that delivered operating margin expansion.

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