| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1375.2B | ¥1323.0B | +3.9% |
| Operating Income / Operating Profit | ¥258.6B | ¥219.1B | +18.0% |
| Ordinary Income | ¥339.0B | ¥308.1B | +10.1% |
| Net Income / Net Profit | ¥245.4B | ¥241.7B | +1.5% |
| ROE | 18.8% | 21.7% | - |
For the fiscal year ending March 2026, Revenue / Net Sales were ¥1375.2B (YoY +¥52.2B +3.9%), Operating Income was ¥258.6B (YoY +¥39.5B +18.0%), Ordinary Income was ¥339.0B (YoY +¥30.9B +10.1%), and Net Income attributable to owners of the parent was ¥240.9B (YoY -¥3.5B -1.4%). The company achieved revenue and profit growth, with Operating Income growing double digits. Gross margin improved to 53.0% and SG&A ratio improved to 34.2%, expanding Operating Margin to 18.8% (prior year 16.6%), a 221bp improvement. Equity-method investment income of ¥77.7B contributed at the ordinary income level, while extraordinary losses of ¥19.5B (losses on sale of investment securities, store closure losses, etc.) and corporate taxes of ¥79.8B led to a slight decrease in final profit. Operating Cash Flow (OCF) amounted to ¥262.6B (+7.4%) and Free Cash Flow was ¥127.9B. Total assets were ¥1,682.3B and the Equity Ratio was 77.6%, indicating an extremely solid financial base. Dividends comprised an interim dividend of ¥87 (including a ¥10 75th-anniversary commemorative dividend) and a year-end dividend of ¥29, with a Payout Ratio of 29.9%.
Revenue: Revenue was ¥1375.2B (YoY +3.9%) and grew steadily. As a single-segment company focused on sporting goods-related businesses, domestic sales account for over 90%. Cost of goods sold was ¥645.7B (YoY +1.9%), growing less than revenue, resulting in Gross Profit of ¥729.5B (YoY +5.8%) and Gross Margin improving 90bp to 53.0% (prior year 52.1%). This was driven by product mix optimization and pricing control. SG&A was contained at ¥470.9B (YoY +0.1%), essentially flat, lowering the SG&A ratio to 34.2% (prior year 35.5%), demonstrating clear positive operating leverage.
Profitability: Operating Income was ¥258.6B (YoY +18.0%), a double-digit increase. Operating Margin expanded 221bp to 18.8% (prior year 16.6%), producing profit growth well above revenue growth. Non-operating income included interest income ¥0.7B and equity-method investment income ¥77.7B (prior year ¥84.5B), resulting in Non-operating Income of ¥82.2B; Non-operating expenses were limited to ¥1.7B, leading to Ordinary Income of ¥339.0B (YoY +10.1%). Ordinary Income margin improved to 24.7% (prior year 23.3%). In extraordinary items, the company recorded Extraordinary Gains of ¥1.8B (gain on sale of investment securities) but incurred Extraordinary Losses of ¥19.5B (loss on sale of investment securities ¥10.8B, store closure losses ¥1.5B, loss on retirement of fixed assets ¥1.5B, etc.), resulting in Profit Before Tax of ¥321.3B (YoY +6.3%). Corporate taxes and others were ¥79.8B (effective tax rate 24.8%), and Non-controlling interests were ¥0.6B, bringing Net Income attributable to owners of the parent to ¥240.9B (YoY -1.4%), a slight decline. Although extraordinary losses and higher tax burden pressured final profit, underlying earnings power remained high. In conclusion, revenue and profit increased, and the company achieved strong profit growth at the operating level through SG&A efficiency.
Profitability: Operating Margin remained high at 18.8% (prior year 16.6%, +221bp). EBITDA (Operating Income + Depreciation & Amortization) was ¥283.9B, with an EBITDA Margin of 20.6%, indicating strong performance. Gross Margin of 53.0% demonstrates product strength, and the decline in SG&A ratio to 34.2% (prior year 35.5%) unlocked significant operating leverage. Ordinary Income margin was 24.7% (prior year 23.3%) and Net Income margin was 17.5% (prior year 18.3%); equity-method investment income of ¥77.7B contributed 6.0% of sales at the non-operating level, while extraordinary losses and tax burden compressed Net Income somewhat.
Cash Quality: Operating Cash Flow (OCF) was ¥262.6B, 1.07x Net Income of ¥245.4B, and OCF/EBITDA was 0.93x, indicating solid cash backing. Inventory turnover days were approximately 105 days (Inventories ¥186.3B ÷ COGS ¥645.7B × 365 days), Days Sales Outstanding ~43 days, Days Payable Outstanding ~26 days, and Cash Conversion Cycle (CCC) ~122 days. Inventory levels increased by +4.2% YoY, suggesting room to improve working capital efficiency.
Investment Efficiency: ROE was 18.8% (prior year 23.2%)—high but down from the prior year. DuPont decomposition: Net Profit Margin 17.5% × Total Asset Turnover 0.82x (Revenue ¥1,375.2B ÷ Total Assets ¥1,682.3B) × Financial Leverage 1.29x (Total Assets ¥1,682.3B ÷ Equity ¥1,305.0B). Total Asset Turnover declined from 0.88x due to a substantial increase in tangible fixed assets (¥163.1B, +50.7%) and buildup of Construction in Progress (CIP) (¥50.9B, CIP ratio 31.2%), which pressured contribution.
Financial Soundness: Equity Ratio 77.6% (prior year 73.7%), Current Ratio 318.4%, Quick Ratio (Cash & deposits + Accounts receivable) / Current liabilities 260.8%—all very strong. Interest-bearing debt consists only of long-term borrowings of ¥10.6B, effectively debt-free. Debt/EBITDA 0.04x, Interest Coverage (OCF ÷ Interest paid) approx. 386x—extremely healthy. Cash and deposits stood at ¥585.0B, ensuring short-term liquidity. Investment securities of ¥354.4B (21.1% of total assets) carry market valuation risk but are well covered by equity.
OCF was ¥262.6B (YoY +7.4%). OCF before working capital changes was ¥243.8B, which includes add-backs of Depreciation & Amortization ¥25.3B and equity-method investment income ¥77.7B. In working capital, Accounts receivable increased ¥30.6B and Inventories increased ¥4.9B, creating cash outflows, partially offset by an increase in Accounts payable of ¥4.8B. Corporate tax payments were ¥55.8B, and interest & dividend receipts were ¥75.3B. Investing Cash Flow was -¥134.7B, driven by capital expenditures for property, plant and equipment of ¥60.5B and net time deposit flows (time deposit placements -¥143.7B, withdrawals +¥73.7B). Financing Cash Flow was -¥136.8B, primarily due to dividend payments of ¥96.7B and share buybacks of ¥37.2B. Free Cash Flow was ¥127.9B (OCF ¥262.6B + Investing CF -¥134.7B), but total shareholder returns of ¥133.9B slightly exceeded FCF, resulting in an FCF coverage of about 0.95x—somewhat tight. Cash and cash equivalents decreased by ¥8.3B during the period to ¥509.6B. The quality of OCF is high: although increases in receivables and inventories caused outflows, operating cash generation sufficiently covered these. If unused assets (CIP ¥50.9B) are commissioned and inventories optimized, OCF generation could further improve.
Core recurring earnings come from Operating Income of ¥258.6B, reflecting operating profitability derived from Gross Profit ¥729.5B less SG&A ¥470.9B. Equity-method investment income of ¥77.7B materially boosted Ordinary Income and accounts for the majority of Non-operating Income ¥82.2B. Performance of equity-method affiliates depends on market conditions and the performance of investees, introducing volatility. One-off items are concentrated in extraordinary items: Extraordinary Gains ¥1.8B (gain on sale of investment securities) versus Extraordinary Losses ¥19.5B (loss on sale of investment securities ¥10.8B, store closure losses ¥1.5B, loss on retirement of fixed assets ¥1.5B, etc.), which reduced final profit by approximately ¥12B net from Ordinary Income. With OCF ¥262.6B versus Net Income ¥245.4B, OCF/Net Income was 1.07x and the accrual ratio (Net Income - OCF)/Net Income was -7.0%, indicating good cash backing of profits. The divergence between Ordinary Income ¥339.0B and Net Income ¥240.9B (approx. -29%) is mainly due to corporate taxes ¥79.8B and extraordinary losses, reflecting the equity-method-dependent earnings structure at the Ordinary Income level. Goodwill amortization of ¥0.16B has a negligible impact on Operating Income, and goodwill balance ¥1.4B is immaterial at under 0.1% of total assets. Overall, core operating earnings plus equity-method contributions form a solid recurring earnings base, while one-off losses are consolidated in extraordinary items.
Full Year guidance: Revenue ¥1,454.0B (YoY +5.7%), Operating Income ¥261.0B (YoY +0.9%), Ordinary Income ¥341.0B (YoY +0.6%), Net Income attributable to owners of the parent ¥255.0B (YoY +3.9%). Actuals: Revenue ¥1,375.2B (-5.4% vs. guidance), Operating Income ¥258.6B (-0.9% vs. guidance), Ordinary Income ¥339.0B (-0.6% vs. guidance), Net Income attributable to owners of the parent ¥240.9B (-5.5% vs. guidance). Profits were broadly in line with guidance, but Revenue and Net Income slightly missed. While SG&A restraint and improved Gross Margin supported operating performance, high inventory levels and extraordinary losses may have pressured final profit. The year-end dividend guidance is ¥35 (excluding commemorative dividend), and the actual year-end dividend was ¥29 (post-stock-split basis); comparisons should consider the stock split. Going forward, commissioning of unused assets and inventory optimization are key to achieving plan.
Dividends comprised an interim dividend of ¥87 (including a ¥10 75th-anniversary commemorative dividend) and a year-end dividend of ¥29. A 3-for-1 stock split for common shares took effect on October 1, 2025, and the year-end dividend of ¥29 is on a post-split basis. On a pre-split comparable basis, the year-end dividend equates to ¥87 and the annual dividend equates to ¥174. The Payout Ratio is 29.9% (annual dividend ¥40 ÷ basic EPS ¥175.76, presented as a pre-split comparable reference) and is at a conservative level, indicating dividend sustainability. Total shareholder returns comprised dividend payments ¥96.7B and share buybacks ¥37.2B, totaling ¥133.9B, which slightly exceeded Free Cash Flow ¥127.9B, resulting in an FCF coverage of about 0.95x and a Total Return Ratio (dividends + buybacks) / Net Income of approx. 54.6%. Given ample equity of ¥1,305.0B and cash ¥585.0B, dividend sustainability is high, and management appears to balance growth investment and shareholder returns. Excluding the commemorative dividend, normal dividend levels will be determined based on future earnings power and investment needs.
Inventory levels and working capital efficiency: Inventories ¥186.3B (YoY +4.2%) with inventory turnover days ~105 days and CCC ~122 days could lead to inventory aging, impairment risk, and cash outflow in working capital. Increases in Accounts receivable ¥30.6B and inventories ¥4.9B negatively contributed to OCF, so inventory optimization and improved receivables collection accuracy are key to improving capital efficiency.
Unused assets and investment recovery: Tangible fixed assets increased substantially to ¥163.1B (YoY +50.7%), with Construction in Progress (CIP) ¥50.9B accounting for 31.2% of that. If commissioning of CIP is delayed, impairment risk and a decline in Total Asset Turnover could worsen ROIC and ROE. Investment securities ¥354.4B (21.1% of total assets) also carry valuation risk from market movements, which could affect comprehensive income.
Dependence on equity-method investments and earnings volatility: Equity-method investment income ¥77.7B accounts for the majority of Non-operating Income ¥82.2B, representing 6.0% of sales—a high level. Equity-method income decreased ¥6.8B YoY, and deterioration in investee performance or market conditions could cause material volatility in Ordinary Income.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 18.8% | 4.6% (1.7%–8.2%) | +14.2pt |
| Net Profit Margin | 17.8% | 3.3% (0.9%–5.8%) | +14.5pt |
Within retail, both Operating Margin and Net Profit Margin significantly exceed the median, placing profitability among the top tier in the industry.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 3.9% | 4.3% (2.2%–13.0%) | -0.4pt |
Revenue growth is around the median, representing an average growth pace within the industry.
※ Source: Company aggregation
Sustained margin improvement from SG&A efficiency: Operating Margin 18.8% (YoY +221bp) and EBITDA Margin 20.6% were supported by a reduction in the SG&A ratio to 34.2% (prior year 35.5%). SG&A growth of +0.1% was substantially lower than revenue growth of +3.9%, demonstrating clear positive operating leverage and the effectiveness of operational improvements. Continued SG&A control could structurally improve margins.
Room to improve capital efficiency: Total Asset Turnover fell to 0.82x (prior year 0.88x), compressing ROE to 18.8% (prior year 23.2%). The primary drivers were a +50.7% increase in tangible fixed assets and CIP of ¥50.9B (CIP ratio 31.2%). Commissioning of unused assets would likely improve turnover and ROIC. Inventory turnover days ~105 and CCC ~122 indicate scope for working capital improvements; inventory optimization and improved receivables collection will be drivers of capital efficiency improvement going forward.
Financial strength and capacity for shareholder returns: Equity Ratio 77.6%, effectively debt-free (Debt/EBITDA 0.04x), and Current Ratio 318.4% reflect a very robust financial position and high recession resilience. Total returns ¥133.9B slightly exceeded FCF ¥127.9B, but with cash ¥585.0B and ample equity ¥1,305.0B, dividend sustainability is high and the company has capacity to balance growth investments with shareholder returns. The balance between growth investment and dividend policy will be a key focus.
This report was automatically generated by AI analyzing XBRL financial statement data to produce a financial results analysis. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by the Company from publicly available financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed.