| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1940.9 B | ¥1449.0 B | +33.9% |
| Operating Income | ¥778.6 B | ¥518.1 B | +50.3% |
| Equity-Method Investment Income (Loss) | - | - | - |
| Ordinary Income | ¥793.4 B | ¥534.5 B | +48.4% |
| Net Income | ¥348.2 B | ¥256.4 B | +35.8% |
| ROE | 22.3% | 23.8% | - |
For the fiscal year ended March 2026, Revenue was ¥1,940.9 B (YoY +491.9 B, +33.9%), Operating Income was ¥778.6 B (YoY +260.5 B, +50.3%), Ordinary Income was ¥793.4 B (YoY +258.9 B, +48.4%), and Net Income attributable to owners of the parent was ¥348.2 B (YoY +91.8 B, +35.8%) — all four key metrics achieved double-digit YoY increases. Gross profit margin improved to 77.3% (from 75.8%, +1.5pt) and operating margin expanded to 40.1% (from 35.8%, +4.3pt), reflecting a significant improvement in profitability driven by high growth in licensing revenue and an improved product mix. By region, Asia showed outstanding growth (Revenue +62.6%, Operating Income +140.4%), while Japan also performed solidly (Revenue +31.2%, Operating Income +47.1%).
[Revenue] Revenue increased significantly to ¥1,940.9 B (YoY +33.9%). By region, Japan remained the core at ¥1,482.5 B (+31.2%, sales mix 62.7%), while Asia recorded high growth at ¥455.4 B (+62.6%, mix 19.2%). North America was flat at ¥277.1 B (+0.5%), while Europe ¥117.2 B (+83.6%) and Latin America ¥33.5 B (+78.8%)—though smaller—also contributed. By business, product sales and licensing combined grew to ¥1,752.99 B (prior year ¥1,286.31 B), approximately +36.3% growth, with royalty revenue at ¥964.24 B (prior year ¥707.38 B, +36.3%) driving high-margin IP income. Theme park business also expanded to ¥177.1 B (prior year ¥151.4 B, +17.0%). External customer revenue excluding inter-segment transactions had a regional composition of Japan 56.6%, Asia 21.4%, North America 14.2%, Europe 6.0%, Latin America 1.7%, indicating an increasing share from Asia.
[Profitability] Operating Income rose to ¥778.6 B (YoY +50.3%), outpacing revenue growth. Cost of goods sold ratio improved to 22.7% (from 24.2%, -1.5pt) and SG&A ratio improved to 37.2% (from 40.1%, -2.9pt), materially enhancing the cost structure. Operating margin reached 40.1% (from 35.8%, +4.3pt). By region, Asia achieved Operating Income of ¥162.5 B (+140.4%) and Japan ¥538.4 B (+47.1%), while Europe saw Operating Income of ¥8.5 B (prior ¥16.0 B, -47.1%) and operating margin deteriorated to 7.2% (from 25.0%, -17.8pt). Ordinary Income was ¥793.4 B (+48.4%), with non-operating income of ¥20.7 B (interest received ¥12.6 B, foreign exchange gains ¥2.0 B, etc.) and non-operating expenses of ¥5.9 B (interest paid ¥1.9 B, fees ¥2.4 B, etc.) contributing. Extraordinary items included gain on sales of investment securities of ¥24.4 B offset by impairment losses of ¥0.1 B, resulting in near net-zero impact; profit before tax was ¥792.4 B (prior ¥554.4 B, +42.9%). After income taxes of ¥243.2 B (effective tax rate 30.7%, up from 24.3%, +6.4pt), Net Income was ¥348.2 B (+35.8%). Net income attributable to owners of the parent excluding non-controlling interests was ¥345.1 B, achieving revenue and profit growth.
Japan: Revenue ¥1,482.5 B (YoY +31.2%), Operating Income ¥538.4 B (+47.1%), margin 36.3%. As the core segment representing about 69% of consolidated operating income, domestic licensing revenue and theme park operations remained solid. Asia: Revenue ¥455.4 B (+62.6%), Operating Income ¥162.5 B (+140.4%), margin 35.7%. High growth with high profitability, strongly driving consolidated profit; expansion of IP awareness in China and Southeast Asia contributed. North America: Revenue ¥277.1 B (+0.5%), Operating Income ¥97.7 B (+10.0%), margin 35.2%. Revenue flat but operating income rose due to improved pricing on existing licensing revenue. Europe: Revenue ¥117.2 B (+83.6%), Operating Income ¥8.5 B (-47.1%), margin 7.2% (significantly down from 25.0%). Revenue expanded rapidly but profitability deteriorated due to upfront investments and rising costs. Latin America: Revenue ¥33.5 B (+78.8%), Operating Income ¥8.8 B (+60.5%), margin 26.2%. Small scale but on a growth trajectory; increased awareness in Brazil contributed. Inter-segment internal sales totaled ¥424.9 B (prior ¥319.5 B); consolidated Operating Income after adjustments was ¥778.6 B.
[Profitability] Operating margin 40.1% (from 35.8%, +4.3pt), gross profit margin 77.3% (from 75.8%, +1.5pt), maintaining very high profitability. ROE 22.3% (comparison with prior-year ROA 29.8% is difficult, but dividing current Net Income ¥348.2 B by year-end shareholders’ equity ¥1,559.7 B yields approximately 22.3%), indicating strong capital efficiency. Non-operating income ¥20.7 B is primarily interest received ¥12.6 B, implying stable financial income. [Cash Quality] Operating Cash Flow (OCF) ¥525.5 B (YoY +28.8%) provides coverage of 1.51x relative to Net Income ¥348.2 B. OCF/EBITDA (OCF ÷ (Operating Income + Depreciation)) is ¥525.5 B ÷ (¥778.6 B + ¥28.7 B) = 0.65x, somewhat low, with increases in working capital (accounts receivable -¥29.3 B, inventory -¥40.0 B) and corporate tax payments -¥206.0 B constraining cash conversion. [Investment Efficiency] Capital expenditures ¥24.4 B are below depreciation ¥28.7 B (CapEx/Depreciation 0.85x), indicating a cautious pace of asset renewal. Intangible asset purchases ¥32.4 B (prior ¥13.5 B, +140%) reflect increased investment in digital/IP. [Balance Sheet Strength] Equity ratio 66.5% (from 53.1%, +13.4pt), current ratio 328% (prior 308%), and cash & deposits ¥1,254.3 B indicate ample liquidity. D/E ratio 0.50x (interest-bearing debt — short-term borrowings + long-term borrowings + bonds — about ¥31.3 B ÷ net assets ¥1,559.7 B) and Debt/EBITDA 0.04x are extremely low.
OCF was ¥525.5 B (prior ¥408.2 B, +28.8%), and the OCF subtotal (before working capital changes) was ¥721.8 B, demonstrating strong cash-generating ability. However, increases in accounts receivable -¥29.3 B, inventory -¥40.0 B, and decrease in accounts payable -¥10.1 B resulted in a net working capital outflow of -¥79.4 B, and corporate tax payments of -¥206.0 B weighed on cash. Investing CF was -¥208.6 B (prior +¥82.8 B), a large outflow mainly due to CapEx -¥24.4 B, intangible asset investment -¥32.4 B, and net placements into time deposits (payments -¥237.8 B, proceeds +¥134.3 B, net -¥103.5 B). Financing CF was -¥384.4 B, driven by dividend payments -¥154.1 B, share buybacks -¥150.0 B, and repayments of borrowings (long-term -¥56.2 B, short-term -¥16.3 B), reducing interest-bearing debt. Free Cash Flow (OCF + Investing CF) was ¥316.9 B, sufficient to cover dividends of ¥154.1 B, and the total shareholder returns (dividends + buybacks) of ¥304.1 B were also covered within Free Cash Flow. Year-end cash was ¥1,254.3 B (prior ¥1,189.8 B), leaving ample liquidity, though working capital increases (notably inventory +¥40.0 B) and allocation to time deposits somewhat dampened visible cash generation.
Ordinary Income ¥793.4 B was largely composed of Operating Income ¥778.6 B, with non-operating income ¥20.7 B (1.1% of sales) centered on interest received ¥12.6 B and foreign exchange gains ¥2.0 B, indicating limited one-off factors. Extraordinary items included gain on sale of investment securities ¥24.4 B offset by impairment losses ¥0.1 B, resulting in negligible net impact on profit before tax ¥792.4 B. OCF ¥525.5 B is 1.51x Net Income ¥348.2 B, showing healthy coverage; the accrual ratio ((Net Income − OCF) ÷ Total Assets) is approximately -7.6%, a negative figure indicating cash generation exceeding accounting profit. Comprehensive income ¥589.8 B exceeded Net Income ¥348.2 B by ¥241.6 B, with foreign currency translation adjustments ¥21.4 B and actuarial gains related to retirement benefits ¥26.4 B contributing positively, and valuation differences on securities -¥7.2 B detracting. The divergence between Ordinary Income and Net Income is primarily due to a higher effective tax rate of 30.7% (taxes ¥243.2 B / profit before tax ¥792.4 B); one-off items had limited impact. Overall, earnings quality can be regarded as generally recurring and high quality.
Full-year guidance projects Revenue ¥2,298.0 B (YoY +18.4%), Operating Income ¥895.0 B (+15.0%), Ordinary Income ¥902.0 B (+13.7%), and Net Income attributable to owners of the parent ¥638.0 B, indicating continued revenue and profit growth. The implied operating margin is approximately 38.9% (down -1.2pt from this year’s 40.1%), reflecting somewhat conservative assumptions but still at a very high level. This likely incorporates regional mix (lower profitability in Europe) and upfront growth investments (marketing and digital/intangible assets). EPS is forecast at ¥52.62 (this year ¥45.33, +16.1%), and dividend forecast ¥8.00 (this year ¥6.90, +15.9%), indicating increased shareholder returns. While the projected Revenue growth decelerates from +33.9% this year to +18.4% next year, assumptions appear to rest on continued growth in Asia and stable domestic performance. Key risks to achieving guidance include normalization of inventory turnover (year-end inventory ¥112.4 B, +55% YoY) and improvement in European profitability.
Interim and year-end dividend payments totaled ¥154.1 B (interim dividend ¥31, year-end ¥38 for an annual dividend of ¥69 per share, up from ¥20, +245% YoY). Payout ratio is 30.0% (calculated as dividend ¥69 ÷ EPS ¥45.33 × average outstanding shares during the period), a sustainable level. Share buybacks amounted to ¥150.0 B, bringing total shareholder returns (dividends + buybacks) to ¥304.1 B. Total return ratio is approximately 87% (total return ¥304.1 B ÷ Net Income ¥348.2 B), a high level but sufficiently covered by Free Cash Flow ¥316.9 B. Treasury shares increased to -¥247.2 B (prior -¥176.3 B) following repurchases; number of shares outstanding is 1.28 B shares, treasury shares 0.065 B shares, and year-end net assets expanded to ¥1,559.7 B. Next fiscal year dividend guidance is ¥8.00 annual; on a practical basis considering a stock split (5 shares for each share), a continued policy of dividend increases is maintained. Dividend coverage by FCF is about 2.1x, and FCF coverage of total returns is about 1.0x, indicating margin and strong balance sheet and operating cash flows support sustainability of shareholder returns.
Prolonged inventory turnover risk: Inventory at ¥112.4 B (YoY +55.0%) increased materially, and days inventory outstanding (DIO) is about 98 days (Inventory ÷ (COGS/365)), up from about 75 days, indicating lengthening. If demand forecasting and inventory build-up mismatch becomes evident, there is risk of valuation losses or margin erosion from discounting.
Regional mix concentration and deteriorating European profitability: Japan accounts for 62.7% of Revenue and about 69% of Operating Income, a high concentration that increases sensitivity to domestic economic and consumption trends. Europe showed rapid Revenue growth (+83.6%) but Operating margin fell to 7.2% (from 25.0%, -17.8pt), highlighting risks around delayed recovery of upfront investments and intensified price competition.
Decline in cash conversion due to working capital increases: Against an OCF subtotal of ¥721.8 B, accounts receivable -¥29.3 B, inventory -¥40.0 B, and accounts payable -¥10.1 B produced a working capital outflow of -¥79.4 B. OCF/EBITDA of 0.65x indicates weak cash conversion; if capital efficiency deteriorates further during the growth phase, it could impact investment capacity and sustainability of shareholder returns.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 40.1% | 3.4% (1.4%–5.0%) | +36.8pt |
| Net Margin | 17.9% | 2.3% (1.0%–4.6%) | +15.7pt |
Both operating margin and net margin exceed industry medians by a wide margin, underscoring a high-margin model centered on licensing revenue.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 33.9% | 5.9% (0.4%–10.7%) | +28.0pt |
Revenue growth substantially exceeds the industry median, driven by IP expansion and high growth in Asia.
※ Source: Company compilation
Achieved exceptional profitability and capital efficiency with Operating Margin 40.1% and ROE 22.3% among listed domestic companies; the high-margin licensing and theme park businesses demonstrate sustainability. High growth in Asia (Revenue +62.6%, Operating Income +140.4%) amplified consolidated operating leverage and regional diversification contributed to diversifying growth drivers.
Key focus areas going forward include extended inventory turnover (DIO ~98 days vs prior ~75 days) and deteriorating European profitability (margin 7.2%, down -17.8pt from 25.0%). Increased working capital resulted in OCF/EBITDA 0.65x and somewhat weaker cash conversion; improving capital efficiency during growth and restoring European profitability will be critical next fiscal year. The balance sheet remains net-cash (cash ¥1,254.3 B, interest-bearing debt ¥31.3 B), providing strong financial resilience, and total shareholder returns (dividends + buybacks ¥304.1 B) are adequately covered by Free Cash Flow ¥316.9 B.
This report is an analysis generated automatically by AI based on XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the firm based on public financial statements. Investment decisions are your own responsibility; consult professionals as needed before making investment decisions.