MARUI GROUP CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥26.39B
• Net Income: ¥12.19B
• EPS: ¥82.47

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

Marui Group (8252) reported solid profitability for FY2026 Q2 (consolidated, JGAAP), highlighted by a 22.7% YoY increase in operating income to ¥26,395 million and a 22.0% YoY rise in net income to ¥14,825 million. While headline revenue is shown as unreported, the combination of gross profit (¥109,089 million) and cost of sales (¥14,871 million) implies revenue of approximately ¥123,960 million for the period. This produces a high gross margin of roughly 88.1%, consistent with a financial/credit-centric model where “COGS” is structurally low. Operating margin is strong at about 21.3%, and EBITDA of ¥33,309 million implies an EBITDA margin near 26.9%. Interest expense was ¥1,422 million, yielding an interest coverage ratio of about 18.6x, indicating ample debt service capacity. Net margin is approximately 12.0% (¥14,825 million / ¥123,960 million), supporting healthy bottom-line conversion. Using period-end balances, financial leverage (assets/equity) stands at 4.54x, and the equity ratio recalculates to roughly 22.0% (¥250,682 million / ¥1,138,769 million), despite the equity ratio field being unreported. The company generated negative operating cash flow of ¥76,941 million, likely reflecting growth in receivables/working capital typical of a credit business, and this was largely offset by positive financing cash flow of ¥75,641 million. Liquidity metrics based on the balance sheet look comfortable (current ratio about 2.67x), though their interpretation must consider the nature of a receivables-funded model. On a DuPont basis, half-year ROE approximates 5.9% using implied revenue and period-end assets; annualizing earnings suggests a full-year ROE on the order of the low double digits, contingent on second-half trends. Tax expense of ¥6,206 million against ordinary income of ¥23,058 million implies an effective tax rate near 27%, contrary to the unreported 0.0% metric shown. Dividend fields are unreported, preventing assessment of payout ratios or FCF coverage; however, EPS is disclosed at ¥82.47 for the period, implying roughly ¥165 on a simple annualized basis, subject to seasonality. Overall, profitability is robust, leverage is material but appears manageable given coverage, and cash flow dynamics reflect receivables growth funded via external financing. Key watchpoints are the persistence of working capital outflows, credit cost trends, and funding cost management as rates evolve. Data gaps (notably revenue, investing cash flows, DPS, and shares) limit precision, so conclusions rely on inferred revenue and standard industry interpretations.

Profitability Analysis

ROE decomposition (DuPont): Using implied revenue of ¥123,960 million, net margin ≈ 11.96% (14,825/123,960), asset turnover (half-year, using period-end assets) ≈ 0.109x (123,960/1,138,769), and financial leverage ≈ 4.54x (1,138,769/250,682). This yields a half-year ROE of ~5.9%; simple annualization of earnings suggests full-year ROE in the ~11–12% range, subject to 2H seasonality and changes in balance sheet levels. Margin quality: Gross margin ≈ 88.1%, operating margin ≈ 21.3%, and EBITDA margin ≈ 26.9%—all consistent with a finance/credit platform where net revenues are recognized with low “COGS.” Net margin near 12% confirms effective cost control and manageable credit/funding costs this period. Operating leverage: Operating income grew +22.7% YoY; absent disclosed revenue growth, the expansion likely reflects scale benefits in the finance segment, disciplined SG&A, and benign credit costs. Interest coverage at ~18.6x (26,395/1,422) is strong, providing cushion against rate or spread volatility.

Growth Assessment

Revenue sustainability: Implied revenue of ¥123,960 million and high gross margin suggest continued reliance on fee/interest income streams. The +22.7% YoY operating income growth points to improved operating efficiency and/or portfolio growth. Profit quality: Net income rose +22.0% YoY to ¥14,825 million, with an implied effective tax rate near 27%, indicating no unusual tax distortions. The negative OCF indicates growth-driven working capital build (likely receivables), which is typical but requires ongoing funding access. Outlook: If receivables growth continues and credit costs remain contained, earnings momentum can be maintained, though funding costs and macro-driven consumption/credit demand will be key determinants. Given the data gaps (no disclosed revenue or investing cash flows), we refrain from precise growth forecasts and focus on directional drivers: receivables expansion, yield-spread stability, credit cost normalization, and operating efficiency.

Financial Health

Liquidity: Current assets ¥737,587 million vs current liabilities ¥276,565 million yield a current ratio of ~2.67x; however, as current assets are likely dominated by receivables, traditional liquidity ratios are less indicative of immediate cash liquidity in a credit business. Solvency and capital structure: Total assets ¥1,138,769 million, equity ¥250,682 million => equity ratio ~22.0% and financial leverage 4.54x. Total liabilities/equity ≈ 3.22x, reflecting a funding model reliant on liabilities to finance receivables. Interest coverage of ~18.6x indicates solid buffer to service debt. We note ordinary income of ¥23,058 million vs income tax ¥6,206 million implies a normalized tax burden. Overall, solvency appears adequate for the business model, but sustained access to funding at acceptable spreads is critical.

Cash Flow Quality

Earnings quality: Positive earnings alongside negative operating cash flow (¥−76,941 million) point to significant working capital deployment, likely receivables growth—a common dynamic for card/financing businesses and not necessarily a sign of earnings aggressiveness. Free cash flow: Investing cash flow is unreported (0), preventing a reliable FCF calculation; the displayed FCF of 0 should be treated as unknown. Working capital: The scale of OCF outflow relative to net income (OCF/NI ≈ −5.19x) underscores heavy portfolio growth or timing effects. Financing cash flow of +¥75,641 million largely funds the OCF deficit, consistent with asset growth funding. Monitoring receivables turnover, credit losses, and funding mix is key to assessing ongoing cash flow quality.

Dividend Sustainability

Dividend per share and payout ratio are unreported, so direct dividend sustainability analysis is not possible. EPS is ¥82.47 for the half-year; a simple annualization implies ~¥165, but seasonality may affect this. With OCF negative due to portfolio growth and investing CF unreported, FCF coverage cannot be determined. Sustainability will hinge on policy guidance, earnings durability, and access to funding supporting both growth and shareholder returns. Until DPS and capex/investing cash flows are disclosed, we view payout assessment as indeterminate based on the provided data.

Risk Assessment

Business Risks:

• Credit cost volatility impacting net income amid changes in borrower behavior and macro conditions
• Interest rate and funding spread risk affecting net interest margin
• Regulatory changes in consumer finance, credit cards, and BNPL impacting fees and risk models
• Competition from banks, fintechs, and e-commerce ecosystems compressing yields and fees
• Consumption slowdown reducing transaction volumes and receivables growth

Financial Risks:

• High reliance on external funding to support receivables growth (negative OCF offset by financing CF)
• Leverage inherent to the business model (financial leverage ~4.54x; liabilities/equity ~3.22x)
• Asset-liability duration and repricing mismatch as rates change
• Concentration in unsecured receivables potentially raising loss volatility in downturns

Key Concerns:

• Sustained negative operating cash flow associated with portfolio expansion
• Potential increase in funding costs relative to asset yields compressing margins
• Data gaps (revenue, investing CF, DPS) limiting full assessment of FCF and capital return capacity

Investment Implications

Key Takeaways:

• Strong profitability with operating income +22.7% YoY and net income +22.0% YoY
• Implied revenue of ~¥123.96 billion supports robust operating (≈21.3%) and EBITDA (≈26.9%) margins
• Healthy interest coverage (~18.6x) offsets elevated leverage typical of the model
• Negative OCF (¥−76.9 billion) reflects growth in receivables funded by financing CF (+¥75.6 billion)
• Equity ratio recalculates to ~22%, indicating moderate capital buffer for a credit platform

Metrics to Watch:

• Receivables growth, delinquency/NPL ratios, and credit cost trends
• Funding mix, average funding cost, and net interest margin/yield spread
• Operating expense ratio and cost discipline
• OCF trajectory vs financing inflows and any securitization activity
• Capital adequacy (equity ratio), ROE progression, and guidance on DPS/buybacks

Relative Positioning: Within Japanese consumer finance/credit-centric models, Marui’s margin profile and coverage appear strong this period, with leverage in line with a receivables-funded balance sheet. The key differentiators near-term will be credit cost containment and funding cost management amid evolving rate conditions.

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