Mizuno Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥126.51B
• Operating Income: ¥12.01B
• Net Income: ¥8.21B
• EPS: ¥128.68

Income Statement

Balance Sheet

Cash Flow Statement

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

Mizuno Co., Ltd. (8022) delivered solid FY2026 Q2 performance with topline expansion and modest margin improvement, supported by disciplined cost control and a conservative balance sheet. Revenue grew 5.8% YoY to ¥126.5bn, while operating income rose 7.7% YoY to ¥12.0bn, indicating slight operating leverage. Net income increased 22.0% YoY to ¥9.88bn, outpacing operating profit on favorable non-operating items and an effective tax burden consistent with historical norms (reported metric shows 0% due to data limitations, but tax expense of ¥3.13bn suggests a typical rate). Gross margin remained healthy at 39.0%, and operating margin improved to 9.5%, up roughly 0.2pp YoY by our estimate. Ordinary income of ¥12.7bn reflects minimal financing drag given very low interest expense (¥82m) and an interest coverage ratio of 146.5x. The balance sheet remains robust: equity stands at ¥163.3bn against total assets of ¥221.5bn, implying an equity ratio of approximately 73.7% despite a reported 0.0% placeholder. Liquidity is strong with a current ratio of 346% and quick ratio of 227%, underpinned by sizable working capital of ¥104.9bn. Operating cash flow of ¥8.13bn is 0.82x net income, indicating some working capital absorption in the half; inventory stands at ¥50.7bn, warranting monitoring given sector seasonality. EBITDA reached ¥13.46bn with a margin of 10.6%, consistent with solid operating efficiency for a branded sporting goods company. DuPont analysis yields ROE of 6.05%, driven by a 7.81% net margin, asset turnover of 0.571x, and low financial leverage of 1.36x. Financial risk appears low given limited leverage and strong coverage ratios. Reported items showing as zero (equity ratio, investing CF, cash, DPS, shares) reflect non-disclosure in the dataset, not actual zero values; conclusions are therefore based on available non-zero data and standard derivations. The lack of reported investing cash flows and share data limits precision on free cash flow and per-share metrics. Overall, Mizuno demonstrates steady growth, improving profitability, high balance sheet resilience, and acceptable cash conversion for the first half, with key watchpoints around inventory discipline and capex visibility. Near-term outlook hinges on sell-through in core regions and product mix, while the company’s conservative capital structure provides ample flexibility. We refrain from investment recommendations and focus on fundamentals given data gaps.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 7.81%
• asset_turnover: 0.571
• financial_leverage: 1.36
• calculated_ROE: 6.05%
• notes: ROE = 7.81% × 0.571 × 1.36 ≈ 6.05%; leverage low due to strong equity base. margin_quality:
• gross_margin: 39.0% (¥49.39bn/¥126.51bn)
• operating_margin: 9.5% (¥12.01bn/¥126.51bn)
• ordinary_margin: 10.1% (¥12.72bn/¥126.51bn)
• net_margin: 7.81% (¥9.88bn/¥126.51bn)
• commentary: Gross margin remains robust, likely aided by product mix/price discipline. Operating margin improved ~0.16–0.20pp YoY based on implied prior-year figures, evidencing cost control and mild operating leverage. operating_leverage:
• revenue_growth_yoy: 5.8%
• operating_income_growth_yoy: 7.7%
• interpretation: OI grew faster than revenue, implying incremental margins and positive operating leverage. EBITDA margin at 10.6% supports stable operating efficiency.
• interest_burden: Minimal; interest expense ¥82m with EBIT/interest ≈146.5x.

Growth Assessment

revenue_sustainability: Topline growth of 5.8% YoY suggests steady demand across categories/channels. Sustainability will depend on sell-through in key geographies and maintaining price/mix; no single-period signals of over-reliance on discounting given stable margins. profit_quality: Net income +22% YoY outpaced operating profit, driven by benign non-operating line and a normalizing tax burden. Core profitability (operating) improved modestly, indicating quality rather than one-time effects. outlook: With healthy margins, low financing costs, and a strong balance sheet, Mizuno is positioned to support product launches and seasonal demand. Key variables include FX movements, sourcing costs, and inventory normalization into H2. Absent capex data, we assume maintenance to moderate capex consistent with brand investments.

Financial Health

liquidity:

• current_ratio: 346.3% (¥147.42bn/¥42.57bn)
• quick_ratio: 227.1% ((CA−Inv)/CL)
• working_capital: ¥104.85bn
• assessment: Ample liquidity headroom with significant buffer to meet near-term obligations. solvency:
• debt_to_equity: 0.38x (using total liabilities/equity as proxy)
• interest_coverage: 146.5x (EBIT/Interest)
• equity_ratio_estimate: 73.7% (¥163.34bn/¥221.48bn) despite reported 0.0% placeholder
• assessment: Very conservative capital structure; low refinancing risk. capital_structure: Total liabilities ¥61.36bn vs equity ¥163.34bn indicates low leverage and high financial flexibility.

Cash Flow Quality

earnings_quality: OCF/NI at 0.82 indicates some working capital absorption in H1, not uncommon seasonally; monitor persistence. EBIT-to-cash conversion remains acceptable. FCF_analysis: Free cash flow cannot be precisely derived due to unreported investing cash flows; OCF of ¥8.13bn provides capacity before capex. With low interest and low leverage, cash needs are modest. working_capital: Inventories ¥50.74bn; inventory days (approx.) ≈ 132 days on H1 COGS basis, appropriate for apparel/footwear but warrants monitoring for build-ups relative to sales. Receivables/payables not disclosed; thus full WC dynamics cannot be assessed.

Dividend Sustainability

payout_ratio_assessment: Reported payout ratio and DPS are zero due to data limitations; not indicative of actual policy. With net income of ¥9.88bn and low leverage, capacity for distributions exists in principle. FCF_coverage: FCF coverage cannot be computed reliably as investing cash flows (including capex) are unreported; OCF of ¥8.13bn provides a baseline pre-capex. policy_outlook: Absent disclosure, we assume a conservative approach consistent with the strong balance sheet. Future dividends hinge on capex needs, inventory normalization, and profitability trajectory.

Risk Assessment

Business Risks:

• Demand cyclicality in sporting goods and discretionary apparel
• Inventory obsolescence risk tied to seasonality and product cycles
• Competitive intensity from global brands across price points
• FX volatility affecting export competitiveness and sourcing costs
• Channel mix risk (wholesale vs DTC) impacting margins
• Input cost fluctuations (materials, freight, labor)

Financial Risks:

• Working capital swings affecting OCF (inventory and receivables)
• Potential FX translation and transaction impacts on earnings
• Limited visibility into capex and investing cash flows
• Concentration risk in certain regions or categories (data not disclosed)

Key Concerns:

• OCF below net income (0.82x) implies working capital usage; needs monitoring
• High inventory level relative to H1 COGS warrants careful oversight
• Data gaps (investing CF, DPS, equity ratio, cash) constrain full assessment of FCF and capital return capacity

Investment Implications

Key Takeaways:

• Steady growth with modest margin expansion; operating margin ~9.5%
• Strong balance sheet with estimated equity ratio ~73.7% and low leverage (0.38x liabilities/equity)
• Interest coverage extremely high (146.5x), implying minimal financial risk
• Cash conversion acceptable but sub-1.0x due to working capital; watch inventory discipline
• Limited disclosure on investing CF and dividends constrains FCF and payout analysis

Metrics to Watch:

• Gross and operating margin trajectory (pricing/mix and cost control)
• OCF/NI ratio and inventory days
• Capex levels and investing cash flows once disclosed
• FX impacts on revenue and COGS
• Ordinary income vs operating income spread (non-operating items)
• Asset turnover trends (sales productivity of asset base)

Relative Positioning: Within Japanese sporting goods peers, Mizuno exhibits a conservative balance sheet and stable margins; growth is steady rather than outsized, with financial resilience a key differentiator.

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