Wagokoro co.,ltd. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥2.02B
• Operating Income: ¥449M
• Net Income: ¥319M
• EPS: ¥72.68

Income Statement

Balance Sheet

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

Wagokoro Co., Ltd. (92710) reported strong FY2025 Q3 consolidated results under JGAAP, with notable top-line and margin expansion. Revenue reached ¥2,023 million, up 27.5% YoY, reflecting solid demand and/or footprint expansion. Gross profit was ¥1,072.7 million, implying a robust gross margin of 53.0, which supports healthy unit economics. Operating income rose to ¥449 million (+41.4% YoY), pushing the operating margin to approximately 22.2 and evidencing positive operating leverage. Ordinary income of ¥453 million and net income of ¥466 million (+47.2% YoY) suggest the contribution of non-operating/extraordinary items. The reported net margin of 23.04 underpins a strong DuPont profile. DuPont shows ROE of 45.37, driven by a high net margin (23.04), respectable asset turnover (1.227x), and moderate leverage (1.61x). Liquidity appears comfortable with a current ratio of 137.5 and working capital of ¥229.45 million. Based on the balance sheet (equity ¥1,027 million over assets ¥1,649 million), the equity ratio is approximately 62.3, indicating a solid capital base despite the reported 0.0 figure being an undisclosed value. Interest coverage is very strong at 92.2x, reflecting low interest burden versus operating earnings. While cash flow line items are undisclosed (shown as zero), earnings quality must be assessed cautiously pending OCF visibility. Dividend distributions are currently nil (DPS ¥0, payout 0), preserving balance sheet flexibility for growth or risk management. Overall, the company exhibits improved profitability and efficiency, with margin expansion outpacing sales growth. The absence of cash flow disclosures, depreciation detail, and share count data (all shown as zero, i.e., undisclosed) limits precision on FCF and per-share metrics. Even with these limitations, the profile suggests strong near-term profitability and prudent leverage. Monitoring sustainability of gross margin and operating leverage will be key to assessing durability into FY2025 Q4 and beyond.

Profitability Analysis

ROE_decomposition: ROE 45.37% = Net Profit Margin 23.04% x Asset Turnover 1.227x x Financial Leverage 1.61x. ROA (NI/Assets) approximates 28.3% (¥466m / ¥1,649m). The outsized net margin is the main ROE driver, supplemented by efficient asset use and moderate leverage. margin_quality: Gross margin at 53.0% is strong for the company’s profile and implies favorable product mix/pricing and/or sourcing efficiencies. Operating margin of ~22.2% and ordinary margin of ~22.4% indicate disciplined SG&A control and low non-operating drag. Net margin of 23.0% exceeds ordinary margin, indicating positive non-operating or extraordinary impacts; sustainability of this uplift should be monitored. The effective tax rate appears understated in the provided metrics; with reported income tax of ¥15.4m and net income exceeding ordinary income, special items likely influenced after-tax results. operating_leverage: Operating income growth (+41.4% YoY) outpaced revenue growth (+27.5% YoY), evidencing positive operating leverage and fixed-cost absorption. This suggests improved scale benefits and cost discipline. Continued leverage is contingent on maintaining sales momentum and avoiding mix-driven gross margin compression.

Growth Assessment

revenue_sustainability: Revenue growth of +27.5% YoY is strong and likely reflects demand recovery and/or expanded sales channels. Assess sustainability via like-for-like sales, store productivity, and e-commerce or inbound exposure if applicable. profit_quality: Gross margin expansion and higher operating margin indicate improved product economics and cost control. However, the gap between ordinary and net income suggests non-recurring gains or financial income that may not repeat. Absence of depreciation disclosure limits visibility into recurring cost base and asset renewal needs. outlook: With solid margins and healthy leverage metrics, near-term earnings momentum appears favorable, assuming stable demand and pricing. Key watchpoints include input cost trends, FX effects on sourcing (if any), and consumer demand elasticity. The durability of non-operating contributions to net income remains uncertain.

Financial Health

liquidity: Current ratio 137.5% and working capital ¥229.45m indicate adequate short-term liquidity. Quick ratio equals current ratio due to undisclosed inventory, implying that liquid assets likely cover near-term obligations; however, actual cash levels are not disclosed. solvency: Debt-to-equity of 0.69x (total liabilities to equity proxy) points to a moderate leverage position. Interest coverage at 92.2x reflects minimal interest burden relative to operating income. capital_structure: Total assets ¥1,649m, total equity ¥1,027m, total liabilities ¥707m. Implied equity ratio ~62.3%, denoting a solid equity cushion. The reported equity ratio of 0.0% is an undisclosed placeholder rather than an actual metric.

Cash Flow Quality

earnings_quality: OCF is undisclosed (reported as 0). As a result, the OCF/Net Income ratio shown as 0.00 reflects missing data, not cash generation weakness. Earnings quality appears strong from margins and coverage, but cannot be validated against cash conversion. FCF_analysis: Free cash flow is undisclosed (reported as 0). Without capex or depreciation detail, we cannot assess maintenance vs growth investment needs or FCF coverage. working_capital: Current assets ¥841.1m vs current liabilities ¥611.6m. Inventory is undisclosed, limiting turnover analysis. Positive working capital supports operations, but cash conversion cycles cannot be evaluated fully.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0 and payout ratio 0.0%, indicating full earnings retention. Given strong profitability, the capacity to pay dividends likely exists, but policy appears to prioritize reinvestment or balance sheet strength. FCF_coverage: FCF is undisclosed, so coverage metrics are not meaningful. Future dividend capacity should be assessed once OCF and capex data are available. policy_outlook: With high ROE and moderate leverage, the company has flexibility. Any future payout initiation will likely depend on the visibility of sustainable OCF and growth investment requirements.

Risk Assessment

Business Risks:

• Sustainability of elevated gross margins amid potential input cost or FX volatility
• Demand cyclicality in discretionary consumer spending
• Potential reliance on inbound tourism or specific channels affecting revenue stability
• Execution risk in store network and/or e-commerce expansion
• Product mix shifts that could compress margins

Financial Risks:

• Limited visibility on cash generation due to undisclosed OCF and capex
• Potential working capital swings if inventories (undisclosed) build
• Exposure to interest rate changes is currently low but could rise with higher leverage
• One-off or non-operating gains influencing net income sustainability

Key Concerns:

• Cash flow data unreported, constraining earnings quality assessment
• Net income exceeding ordinary income suggests non-recurring items
• Depreciation and capex unreported, limiting insight into maintenance needs and true EBITDA

Investment Implications

Key Takeaways:

• Strong topline growth (+27.5% YoY) with even stronger operating income growth (+41.4% YoY) indicates positive operating leverage
• High margins (53.0% gross; ~22.2% operating; 23.0% net) support a robust ROE of 45.37%
• Solid balance sheet with implied ~62% equity ratio and high interest coverage (92.2x)
• Cash flow and depreciation not disclosed, limiting validation of earnings quality and sustainability
• Dividend currently suspended (DPS ¥0), preserving financial flexibility

Metrics to Watch:

• Like-for-like sales growth and traffic/conversion trends
• Gross margin trajectory and SG&A ratio
• Operating cash flow and capex once disclosed; OCF/NI and FCF
• Inventory levels and turnover metrics when available
• Ordinary vs net income gap to identify non-recurring items
• Interest-bearing debt detail and any changes in leverage

Relative Positioning: The company currently exhibits above-average profitability and capital efficiency versus typical retail/consumer peers, underpinned by strong margins and moderate leverage; however, comparative strength is tempered by limited cash flow disclosure, making sustainability assessments more uncertain.

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