Goldwin Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥55.59B
• Operating Income: ¥6.96B
• Net Income: ¥7.89B
• EPS: ¥49.56

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

Goldwin delivered solid top-line and strong operating profit momentum in FY2026 Q2, with revenue up 4.2% year over year to ¥55,589 million and operating income up 33.5% to ¥6,959 million, implying meaningful operating margin expansion. Gross profit of ¥26,638 million equates to a robust 47.9% gross margin, indicating favorable mix and/or disciplined discounting and sourcing. Operating margin improved to approximately 12.5%, pointing to SG&A discipline and operating leverage on modest sales growth. Ordinary income of ¥9,093 million exceeded operating income, suggesting positive non-operating contributions (e.g., financial income or FX gains), though details are not disclosed. Despite stronger operations, net income declined 13.6% YoY to ¥6,798 million, likely reflecting the absence of prior-year one-off gains and/or the presence of extraordinary losses or minority interests not fully disclosed. EPS was ¥49.56 on the reported basis, though share count data are unreported, limiting per-share cross-checks. Liquidity appears very strong, with a current ratio of 249.9% and quick ratio of 202.1%, supported by ¥93,438 million in current assets and ¥37,391 million in current liabilities. Leverage is modest with a debt-to-equity ratio of 0.34x and an interest coverage ratio of 463.9x, reflecting minimal interest expense and strong earnings capacity. Reported equity ratio is listed as 0% due to non-disclosure; based on totals provided, a derived equity ratio approximates 77.5% (equity ¥115,908 million / assets ¥149,531 million), indicative of a conservative balance sheet. Operating cash flow was ¥773 million, substantially below net income (OCF/NI ~0.11), raising questions about working capital build and earnings-to-cash conversion quality in the period. Investing cash flow and cash balances are shown as zero due to non-disclosure, so true free cash flow and liquidity buffers cannot be fully assessed. Financing cash outflow of ¥6,612 million implies repayments or shareholder returns, but dividends are shown as zero due to non-disclosure; we cannot infer dividend actions from the current dataset. DuPont analysis yields ROE of 5.86% from a 12.23% net margin, 0.372x asset turnover, and 1.29x financial leverage, consistent with a high-margin, asset-light profile but modest turnover typical of premium apparel brands. EBITDA of ¥8,035 million (14.5% margin) corroborates healthy underlying profitability, with depreciation and amortization at ¥1,076 million. Inventory of ¥17,884 million appears manageable relative to scale, but with OCF softness, inventory quality and sell-through bear monitoring into peak seasons. Overall, fundamentals show resilient brand economics and margin strength, offset by cash flow conversion weakness and non-operating/extraordinary items driving a disconnect between operating and net profit trends. Data limitations (zeros indicate unreported items) constrain full cash and dividend analysis; conclusions are based solely on the disclosed non-zero metrics.

Profitability Analysis

ROE is 5.86%, decomposed via DuPont into a 12.23% net profit margin, 0.372x asset turnover, and 1.29x leverage. Operating margin is approximately 12.5% (¥6,959m OI on ¥55,589m revenue), up sharply YoY given +33.5% OI on +4.2% revenue, evidencing operating leverage and SG&A discipline. Gross margin of 47.9% indicates strong pricing power and mix for a premium outdoor/apparel portfolio. EBITDA margin of 14.5% (EBITDA ¥8,035m) implies a moderate D&A load (D&A ¥1,076m), consistent with an asset-light retail/wholesale model. Ordinary income ¥9,093m exceeds operating income, suggesting positive non-operating contributions; however, the decline in net income YoY despite higher OI implies either higher taxes in the base period or current-period extraordinary losses/minority interests not disclosed. Interest expense is negligible at ¥15m with coverage at 463.9x, so financing cost drag is immaterial. Margin quality appears high, but sustainability depends on maintaining full-price sell-through and controlling promotions, particularly into winter seasonal demand. The mix of wholesale vs. DTC and FX sourcing dynamics likely influenced the gross margin favorably; lack of detail limits attribution. Overall profitability is strong for the category, with the key watchpoint being the gap between operating and net profit trends.

Growth Assessment

Revenue grew 4.2% YoY to ¥55,589m, a steady expansion consistent with resilient demand for premium outdoor brands. The outsized +33.5% growth in operating income indicates high incremental margins and effective cost control. Net income declined 13.6% YoY to ¥6,798m, suggesting that growth at the operating level did not fully translate to the bottom line due to non-operating or extraordinary items. Asset turnover at 0.372x is modest, typical for apparel businesses with sizable working capital needs; further growth could be supported by improving inventory turns. The quality of profit growth is mixed: operationally strong, but weaker cash conversion (OCF/NI 0.11) raises questions about working capital absorption. Without segment or geographic disclosure, sustainability hinges on macro factors (weather, tourism recovery, outdoor participation) and brand momentum. Near-term outlook is cautiously constructive given margin traction, but normalization of non-operating items and better cash conversion will be needed for bottom-line acceleration.

Financial Health

Liquidity is strong with current assets of ¥93,438m and current liabilities of ¥37,391m, yielding a current ratio of 249.9% and quick ratio of 202.1%. Working capital stands at ¥56,047m, providing ample buffer through seasonal cycles. Leverage is conservative; debt-to-equity is 0.34x and interest burden is minimal (¥15m), resulting in 463.9x interest coverage. Total liabilities are ¥39,674m versus reported equity of ¥115,908m, suggesting a solid capital structure; derived equity ratio is approximately 77.5% (despite the equity ratio field showing 0% due to non-disclosure). Total assets are ¥149,531m; the small inconsistency between assets and the sum of equity and liabilities likely reflects reporting classifications or rounding, and does not alter the conservative solvency view. Overall, the balance sheet appears robust and capable of supporting operations and selective investment.

Cash Flow Quality

Operating cash flow of ¥773m is low relative to net income of ¥6,798m (OCF/NI ~0.11), pointing to weak cash conversion likely driven by working capital build (e.g., inventory or receivables). EBITDA of ¥8,035m versus OCF indicates substantial non-cash earnings and/or timing effects in the half year. Investing cash flow is unreported (shown as zero), so free cash flow cannot be reliably calculated; the FCF figure presented as zero should be treated as unavailable rather than actual. Financing cash flow was an outflow of ¥6,612m, potentially reflecting debt repayment, lease payments, or shareholder returns; lacking detail, attribution is uncertain. With inventories at ¥17,884m, monitoring inventory turns and markdown risk is important for validating earnings quality. Overall, earnings quality is acceptable at the operating level but unproven in cash terms this period due to working capital absorption and data gaps.

Dividend Sustainability

Annual DPS and payout ratio are shown as zero due to non-disclosure at the interim stage; thus, actual dividends and payout policy for the year cannot be assessed from this dataset. Given net income of ¥6,798m and strong balance sheet metrics, capacity for shareholder returns appears supported structurally, but the weak OCF this period complicates near-term coverage analysis. FCF is unreported; therefore, FCF coverage of dividends cannot be evaluated. Historically, apparel firms balance dividends with inventory and store investment needs; without confirmed DPS or capex data, sustainability cannot be concluded. Policy outlook will depend on full-year profitability, working capital normalization, and management’s capital allocation priorities.

Risk Assessment

Business Risks:

• Seasonality and weather sensitivity impacting outerwear and winter categories
• Brand/license concentration risk in marquee outdoor labels
• Inventory obsolescence and markdown risk amid fashion and demand volatility
• Channel mix shifts (wholesale vs. DTC) affecting margins and working capital
• FX exposure in sourcing (USD-denominated inputs) and pricing
• Supply chain disruptions across Asia (e.g., Vietnam/China production)
• Competitive intensity from global and domestic performance/outdoor brands
• Tourism and inbound demand variability impacting retail traffic

Financial Risks:

• Weak earnings-to-cash conversion this period (OCF/NI ~0.11)
• Potential reliance on non-operating items to bridge operating-to-net profit
• Working capital absorption (inventory and receivables) during seasonal build
• Exposure to extraordinary items affecting bottom line visibility
• Currency translation and transaction impacts on gross margin
• Potential lease liabilities and store capex needs (not disclosed here)

Key Concerns:

• Net income decline (-13.6% YoY) despite strong operating profit growth
• Low OCF versus net income, raising questions on cash realization
• Limited visibility on investing cash flows and dividend payments due to non-disclosure

Investment Implications

Key Takeaways:

• Top-line grew 4.2% YoY to ¥55.6bn with notable operating margin expansion to ~12.5%
• Gross margin remains high at 47.9%, underscoring brand strength and pricing power
• Net income fell 13.6% YoY to ¥6.8bn, likely due to non-operating/extraordinary factors
• OCF was ¥0.77bn, only 11% of net income, indicating working capital drag
• Balance sheet is conservative (derived equity ratio ~77.5%, D/E 0.34x, strong liquidity)
• Interest burden is negligible (interest expense ¥15m; coverage 463.9x)
• Data gaps (cash, investing CF, dividends, share data) limit full valuation and payout analysis

Metrics to Watch:

• OCF/Net income ratio and working capital movements (inventory and receivables)
• Gross margin and SG&A ratio to confirm sustainability of operating leverage
• Ordinary-to-operating income gap and any extraordinary items
• Inventory turnover and markdown rates through peak seasons
• FX rates and sourcing costs vs. pricing power
• Store/DTC growth, e-commerce mix, and like-for-like sales

Relative Positioning: Within Japanese-listed apparel/outdoor peers, Goldwin exhibits superior gross margins and a conservative balance sheet, aligning with premium brand positioning; however, it faces greater seasonality and potential license concentration risks compared with more diversified peers, and current-period cash conversion lags best-in-class operators.

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