Starzen Company Limited FY2026 FY Earnings Report

クイックビュー

Executive Summary

For the fiscal year ended March 2026, Revenue was ¥4,482.1B (YoY +¥121.0B +2.8%), Operating Income was ¥87.6B (YoY -¥2.9B -3.1%), Ordinary Income was ¥110.3B (YoY +¥3.7B +3.4%), and Net Income was ¥83.4B (YoY -¥38.6B -31.6%). Revenue increased for the second consecutive year and gross margin improved by 30bp to 9.9% (prior year 9.6%), but SG&A of ¥354.0B (up +7.8%) eroded the benefit of higher sales, resulting in a decline at the operating level. At the ordinary level, increased equity-method investment income of ¥21.5B (prior year ¥14.6B) supported higher Ordinary Income. The large decline in Net Income reflects the absence of prior-year gains on sales of fixed assets of ¥78.6B; this fiscal year recorded special gains of ¥7.8B (gain on sale of investment securities ¥3.8B, step acquisition gain ¥3.8B) so the loss of one-off gains is the main cause. Operating margin fell 12bp to 2.0% (prior year 2.1%), and the company maintains an Ordinary Income margin of 2.5% through reliance on non-operating income.

業績変動要因

【売上高】Revenue ¥4,482.1B (+2.8%). Cost of sales ¥4,040.5B (cost ratio 90.1%) producing Gross Profit ¥441.6B and gross margin 9.9%, a 30bp improvement from 9.6% in the prior year. This likely reflects price pass-through and product mix improvements. The company operates a single segment in meat-related business and does not disclose segment-level details, but achieved solid company-level sales growth.

【損益】Operating Income ¥87.6B (-3.1%), lowering operating margin to 2.0%. SG&A ¥354.0B (SG&A ratio 7.9%, prior year 7.5%) rose ¥25.6B YoY (+7.8%), far outpacing sales growth and offsetting gross margin improvements. Structural inflation in labor, logistics, and energy costs is presumed to be a factor. Non-operating income totaled ¥37.6B (including equity-method investment income ¥21.5B, dividend income ¥2.0B, subsidy income ¥3.0B), supporting Ordinary Income of ¥110.3B (+3.4%) and an Ordinary Income margin of 2.5%. Non-operating expenses were ¥14.9B (interest expense ¥9.9B), up ¥1.5B YoY reflecting increased interest-bearing debt. Profit before tax was ¥115.6B with income taxes of ¥32.2B (effective tax rate 27.9%), resulting in Net Income ¥83.4B. Although Net Income declined sharply due to the prior-year fixed asset sale gain of ¥78.6B, this fiscal year’s special gains of ¥7.8B contributed and underlying ordinary-level earning power was maintained. Conclusion: revenue up but profit down; improving operating-level efficiency remains a challenge.

主要財務指標

【収益性】Operating margin 2.0%, Ordinary Income margin 2.5%, Net margin 1.9%. ROE 8.7% decomposed via DuPont as Net margin 1.9% × Asset Turnover 2.22x × Financial Leverage 2.11x. ROE declined from 14.6% in the prior year mainly due to the drop in Net margin (prior year 2.8% → current 1.9%) caused by the loss of prior-year one-off gains. EBITDA ¥129.6B (Operating Income ¥87.6B + Depreciation ¥42.0B) giving an EBITDA margin of 2.9%. 【Cash Quality】Operating Cash Flow ¥29.5B is 0.35x of Net Income ¥83.4B, indicating low conversion efficiency. OCF/EBITDA 0.23x shows weak cash generation, primarily due to working capital increases (inventory +¥53.2B, advance payments +¥45.1B). Accrual ratio (Net Income - OCF)/Total Assets is 2.7%, indicating acceptable accounting quality. 【Investment Efficiency】Asset turnover 2.22x (prior year 2.54x) remains high but shows a declining trend due to increased inventory and fixed assets. Estimated ROIC is approximately 4.6% calculated as (EBIT ¥87.6B × (1-0.279)) ÷ (Equity ¥957.3B + Interest-bearing debt ¥421.8B), potentially below the cost of capital. 【Financial Health】Equity Ratio 47.4% (prior year 51.6%) declined due to aggressive investments but remains at a healthy level. Current ratio 183.9%, Quick ratio 119.2% indicate sound short-term liquidity. Interest-bearing debt ¥421.8B (short-term borrowings ¥130.5B + long-term borrowings ¥291.4B) results in Debt/EBITDA 3.25x and interest coverage (EBITDA / interest expense) 13.0x, placing credit metrics within investment-grade range.

キャッシュフロー分析

Operating Cash Flow ¥29.5B improved substantially from ¥-2.6B in the prior year (when working capital expansion caused net cash outflow), but working capital increases remained a headwind this year. Operating cash subtotal (before working capital changes) was ¥76.7B; increases in inventory -¥53.2B, advance payments -¥45.1B, and trade receivables -¥5.1B were cash outflows, partially offset by an increase in trade payables +¥21.2B, and after corporate tax payments -¥45.1B the result was ¥29.5B. Inventory rose to ¥441.4B (prior year ¥387.9B), likely reflecting measures against raw material price volatility, inventory level adjustments, and temporary build-up related to M&A integration. Investing Cash Flow was -¥146.9B, led by tangible fixed asset acquisitions -¥80.0B (expansion of production equipment and logistics facilities) and acquisition of subsidiary shares -¥51.8B (M&A), indicating growth-oriented investments. Financing Cash Flow +¥133.9B was driven by proceeds from long-term borrowings ¥220.0B, offset by long-term borrowing repayments -¥102.2B, net increase in short-term borrowings +¥58.8B, dividend payments -¥21.4B and share buybacks -¥19.0B. Free Cash Flow was -¥117.5B (Operating CF + Investing CF), indicating that returns and investments this period were funded by borrowings. Cash and deposits increased by ¥19.5B to ¥182.4B (prior year ¥162.9B), so liquidity coverage for short-term liabilities is good, but continuous working capital management and CAPEX efficiency are key to restoring cash generation.

収益の質

Of Ordinary Income ¥110.3B, Operating Income accounted for ¥87.6B and non-operating income ¥37.6B (equity-method investment income ¥21.5B, subsidy income ¥3.0B, dividend income ¥2.0B), making the non-operating income ratio 34.1%, which is somewhat high. Equity-method income depends on the performance of affiliates and has moderate stability; subsidy income is policy-dependent and its continuity is uncertain. Special gains ¥7.8B were temporary (gain on sale of investment securities ¥3.8B and step acquisition gain ¥3.8B). Comprehensive income was ¥106.2B versus Net Income ¥83.4B, a difference of ¥22.8B attributable to Other Comprehensive Income (foreign currency translation adjustments ¥8.2B, valuation differences on available-for-sale securities ¥10.6B, deferred hedges ¥4.3B). Comprehensive income exceeding Net Income indicates accumulation of unrealized gains. The accrual ratio (Net Income ¥83.4B - Operating CF ¥29.5B) / Total Assets ¥2,021.3B is about 2.7%, within acceptable accounting quality, but the cash-earnings gap driven by working capital increases is notable. Core earning power evaluated on an EBIT basis is ¥87.6B, highlighting the transparency of reliance on non-operating income and underscoring that improving operating efficiency is key to enhancing earnings quality.

業績予想・ガイダンス

For the fiscal year ending March 2027, the company forecasts Revenue ¥4,700.0B (+4.9%), Operating Income ¥92.0B (+5.0%), Ordinary Income ¥114.0B (+3.4%), and Net Income ¥85.0B (+1.9%, EPS forecast ¥148.74). With year-to-date Operating Income of ¥87.6B, progress toward the full-year Operating Income forecast of ¥92.0B is 95.2%, a high level of progress, but the full-year forecast likely assumes gradual realization of M&A integration effects, new equipment ramp-up, and SG&A efficiency improvements. Dividend forecast is ¥25.00 per share on a post-split basis (prior year ¥43 converted to a 1:3 split equivalent of ¥14.33, implying an effective dividend increase of +74.4% on a split-adjusted basis). The small projected increase of ¥4.4B from first-half Operating Income ¥87.6B to full year is conservative, assuming normalization of working capital and phased CAPEX benefits. Net Income forecast ¥85.0B implies a ¥1.6B increase in the second half versus first half Net Income ¥83.4B, reflecting a neutral view on special item fluctuations and focusing on ordinary-level earning capacity.

株主還元

The company paid a year-end dividend of ¥43.00, making the annual dividend ¥43.00 and a payout ratio of 17.6% (total dividends ¥21.4B against Net Income ¥83.4B, based on EPS ¥145.82). Share buybacks of ¥19.0B were executed during the period (Financing CF), so total shareholder returns including dividends ¥21.4B amount to approximately ¥40.4B. The total return ratio (dividends + share buybacks ÷ Net Income) is about 48.5%. Against Free Cash Flow -¥117.5B, returns of ¥40.4B were funded by borrowings, leaving FCF coverage negative. Dividend forecast for FY2027 is ¥25.00 per share (post-split basis) reflecting the 1:3 stock split effective April 1, 2025; on a pre-split basis this equates to ¥75.00, representing a substantial increase from prior-year ¥43 (pre-split basis +74.4%). However, the company’s forecasted EPS ¥148.74 versus forecasted dividend ¥25.00 implies a forecasted payout ratio of 16.8%, a conservative level. If cash generation normalizes, FCF coverage could improve, but the current capital allocation clearly prioritizes growth investments.

リスク要因

1. Working capital management risk: Inventory ¥441.4B (YoY +¥53.5B) and advance payments ¥164.4B (YoY +¥45.1B estimated) rose substantially. Prolonged inventory turnover could increase impairment and obsolescence risk, with OCF/NI 0.35x at a low level. If improvements in working capital efficiency are delayed, recovery of cash-flow quality will be difficult and reliance on external borrowings may persist.

2. Leverage and interest-sensitivity risk: Interest-bearing debt ¥421.8B (YoY +¥142.9B) has risen, pushing Debt/EBITDA to 3.25x. Vulnerability to changes in the interest rate environment has increased, and interest expense ¥9.9B (prior year ¥7.6B) already reflects higher interest burden. Although interest coverage is 13.0x, in a rising-rate scenario profit pressure could become material.

3. Operating margin pressure risk: Operating margin 2.0% (industry median 3.4%, -1.4pt) is low, and SG&A ratio 7.9% (prior year 7.5%) is trending upward. If structural inflation in labor, logistics, and energy costs continues, operating leverage could reverse and further compression of operating margin and deterioration of profitability could occur.

業種ベンチマーク（参考・当社調べ）

収益性・リターン

Both operating margin and net margin are below industry medians, placing the company in a mid-to-slightly-weak position for profitability among wholesale and food-related companies.

成長性・資本効率

Revenue growth is -3.1pt below the industry median, positioning the company at a mid-to-conservative growth pace within the sector.

※Source: Company compilation

決算上の注目ポイント

1. Balance between growth investment and earnings quality: Aggressive investments—tangible fixed asset investment ¥80.0B and M&A ¥51.8B—aim to improve production capacity and logistics efficiency, but in the short term resulted in Free Cash Flow -¥117.5B and increased reliance on borrowings. If new equipment and M&A integration effects materialize from the second half of FY2027 onward, simultaneous achievement of EBITDA growth and working capital normalization is possible; however, delays in ramp-up or integration cost overruns pose risks.

2. Room for improvement in operating margin and SG&A management: Operating margin 2.0% (industry median 3.4%) is low and containing SG&A growth (7.9%) is key. The improvement in gross margin to 9.9% shows success in price pass-through and product mix adjustments, but SG&A growth +7.8% far outpaced sales growth +2.8%, raising sustainability concerns. Improvements in workforce allocation, logistics optimization, and IT efficiency could restore leverage and reverse the operating margin trend, enhancing profitability.

3. Restoration of capital efficiency and cash generation: ROE 8.7% is supported by high asset turnover 2.22x, but Debt/EBITDA 3.25x indicates somewhat elevated leverage. If the working capital buildup (inventory and advance payments) is temporary, improvements in turnover next fiscal year could raise OCF/EBITDA from 0.23x, enabling reduced borrowing dependence and sustainable dividends/returns. Conversely, if inventory and advance payments structurally remain elevated, cash quality will stay weak and financial flexibility will be constrained.

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This report is a financial analysis generated automatically by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by our firm from public financial statements. Investment decisions are your responsibility; please consult a professional advisor if necessary.