Boutiques,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥2.19B
• Operating Income: ¥40M
• Net Income: ¥66M
• EPS: ¥-5.32

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

Boutiques Co., Ltd. (9272) delivered double-digit topline growth in FY2026 Q2, with revenue of ¥2,187m (+11.3% YoY), but profitability compressed sharply as operating income fell to ¥40m (-67.8% YoY). The business continues to exhibit an asset-light, high-gross-margin model, evidenced by a gross profit margin of 77.2%, implying strong value-add and pricing power in its service mix. Despite this, elevated operating expenses (likely SG&A tied to growth initiatives, event execution, or customer acquisition) compressed the operating margin to roughly 1.8%. Ordinary income was ¥42m, but below-the-line items and taxes drove a quarterly net loss of ¥52m (EPS -¥5.32), resulting in a negative net margin of -2.38%. The DuPont bridge shows ROE of -2.34%, driven primarily by the net loss; asset turnover of 0.425 and financial leverage of 2.31x are broadly stable and moderate. Cash generation was robust: operating cash flow came in at ¥582m, far exceeding accounting earnings (OCF/NI of -11.19), indicating favorable working-capital movements and/or non-cash charges cushioning cash. Liquidity appears strong with a current ratio of 190.8% and working capital of ¥1,906m, suggesting ample near-term flexibility. On solvency, total liabilities of ¥2,869m against equity of ¥2,226m imply a debt-to-equity of 1.29x; our calculated equity ratio is approximately 43% (equity/total assets), indicating a balanced capital structure. Financing cash flow was an outflow of ¥538m, likely reflecting debt repayments and/or other financing uses; investing cash flow was not disclosed this quarter. Interest coverage based on operating income is 7.2x, which remains comfortable even after the margin compression. The negative bottom line alongside positive OCF points to timing effects in revenue recognition and working capital rather than structural cash burn, but sustainability needs monitoring as working-capital reversals could normalize cash generation. Dividend data were not disclosed; with a net loss, any potential distribution would need to rely on retained earnings, but no payout is indicated. Key watchpoints are operating expense intensity, conversion from bookings to revenue, and the durability of cash conversion absent supportive working-capital flows. Overall, the quarter reflects solid demand but significant cost pressure, leaving near-term earnings leverage subdued while liquidity and cash generation provide a cushion. Data limitations exist in several line items (cash balance, investing flows, share count), so conclusions focus on disclosed non-zero figures.

Profitability Analysis

ROE of -2.34% decomposes into: net profit margin -2.38%, asset turnover 0.425x, and financial leverage 2.31x. The negative margin is the primary driver of the ROE decline; asset turnover is moderate for a services-driven model and leverage is not excessive. Gross margin at 77.2% underscores strong unit economics, but operating margin compressed to roughly 1.8% as SG&A intensity rose (implied by the gap between gross profit and operating income). EBITDA of ¥70.9m (3.2% margin) indicates minimal operating buffer after personnel, marketing, and event-related costs. Interest expense was ¥5.5m, and interest coverage of 7.2x (operating income basis) remains adequate despite profit pressure. The spread between gross and operating margins suggests limited operating leverage this quarter; higher fixed cost absorption or stepped-up growth investments likely weighed on profitability. Ordinary income of ¥42m near operating income implies non-operating items were limited in aggregate. Net loss of ¥52m indicates tax and/or below-the-line factors offset ordinary profit; margin quality is therefore pressured at the bottom line.

Growth Assessment

Revenue grew 11.3% YoY to ¥2,187m, indicating healthy end-market demand and/or successful event cadence and platform monetization. The model retains high gross margins, consistent with an asset-light services/media platform in healthcare/senior-care verticals, suggesting underlying value-add remains intact. However, operating income fell 67.8% YoY to ¥40m, implying growth was accompanied by substantial opex escalation (e.g., marketing, headcount, event costs), or an unfavorable mix shift. With EBITDA margin at 3.2%, near-term operating leverage is soft; scaling profitably will require restraining SG&A growth relative to revenue or improving utilization and pricing. Revenue sustainability appears reasonable given the growth print, but conversion to profit is the key question; bookings pipeline, retention/renewal rates, and event attendance will be leading indicators. The positive OCF points to healthy cash inflows this period, potentially from customer advances or receivables collection; sustainability depends on working-capital normalization. Near-term outlook hinges on cost discipline and mix, not on demand alone; any normalization of expense intensity should yield outsized incremental margin given the high gross margin base.

Financial Health

Total assets were ¥5,140m and equity ¥2,226m; we calculate an equity ratio of roughly 43% (equity/assets), though the reported ratio was undisclosed. Total liabilities stood at ¥2,869m, with current liabilities of ¥2,100m. Liquidity is strong: current ratio 190.8% and quick ratio 190.8% (inventories not disclosed), and working capital of ¥1,906m supports operational flexibility. Debt-to-equity is 1.29x on a total liabilities basis, indicating moderate leverage for a service platform. Interest expense of ¥5.5m is manageable given 7.2x interest coverage on operating income. Financing cash outflow of ¥538m suggests deleveraging and/or other financing uses, which, if sustained, can modestly improve balance-sheet resilience. Cash and equivalents were not disclosed, so net cash/debt cannot be assessed. Overall solvency appears acceptable with balanced leverage and solid liquidity buffers.

Cash Flow Quality

Operating cash flow of ¥582m versus a net loss of ¥52m indicates strong cash conversion this quarter, driven by working-capital inflows and non-cash charges (D&A ¥31m). The OCF/NI ratio of -11.19 (negative due to net loss denominator) highlights the disconnect between accrual earnings and cash, which is favorable near term but may reverse if collections/advances normalize. Investing cash flow was not disclosed, so free cash flow cannot be reliably computed; the reported FCF of zero likely reflects missing investing data. Financing cash outflow of ¥538m points to repayments or other financing uses; absent cash balance disclosure, liquidity headroom from cash on hand is unknown. Working-capital management appears a key driver of cash quality; monitoring receivables days, customer advances/deferred revenue, and payables is important to assess persistence of OCF strength.

Dividend Sustainability

Dividends per share were not disclosed for the period, and payout metrics are therefore not meaningful. With a net loss recorded in the quarter, any dividend would need to rely on retained earnings; however, policy disclosure is absent here. Without investing cash flow and cash balance data, free cash flow coverage of dividends cannot be assessed. Given positive OCF but negative earnings, the sustainability of distributions would depend on the normalization of working capital and full-year profitability rather than this single quarter. We therefore treat dividend capacity as indeterminate based on disclosed items.

Risk Assessment

Business Risks:

• Operating expense intensity and event execution costs compressing margins despite high gross margin
• Demand cyclicality in exhibitions/media and potential variability in bookings and attendance
• Customer budget sensitivity in the healthcare/senior-care ecosystem and SME exposure
• Regulatory changes in long-term care/healthcare reimbursement affecting client economics
• Revenue mix risk between recurring platform services and more volatile event-driven revenue
• Seasonality of event schedules leading to quarterly volatility
• Talent retention and sales force effectiveness for consultative/services-led growth

Financial Risks:

• Margin compression reducing interest coverage if prolonged
• Working-capital-driven OCF potentially reversing, straining cash generation
• Moderate leverage (1.29x liabilities/equity) amid lower profitability
• Limited visibility on cash balance and investing needs due to undisclosed items
• Potential tax expense volatility relative to pre-tax income

Key Concerns:

• Sharp decline in operating income (-67.8% YoY) despite 11.3% revenue growth
• Negative net margin (-2.38%) and ROE (-2.34%)
• Heavy reliance on working capital for positive OCF this quarter
• Visibility gaps in cash, investing cash flow, and dividend policy disclosure

Investment Implications

Key Takeaways:

• Topline growth remains solid at +11.3% YoY, confirming demand resilience.
• High gross margin (77.2%) validates the asset-light, value-add model.
• Operating margin compressed to ~1.8%, indicating cost pressure or mix shift.
• Net loss (-¥52m) drives negative ROE (-2.34%), masking healthy cash generation.
• OCF of ¥582m suggests strong collections/advances; sustainability needs scrutiny.
• Liquidity is strong (current ratio ~191%), and leverage is moderate (1.29x).
• Limited disclosure on investing cash flows and cash balances constrains full FCF assessment.

Metrics to Watch:

• SG&A-to-revenue ratio and operating margin trajectory
• Bookings, backlog, and renewal rates for platform services
• Accounts receivable days, customer advances/deferred revenue, and working-capital swings
• OCF excluding working-capital movements and capex intensity (when disclosed)
• Interest coverage and debt maturity profile
• Equity ratio (calculated) and any changes in leverage
• Event attendance/retention metrics and pricing power indicators

Relative Positioning: Within TSE Growth-oriented service/platform peers, the company exhibits superior gross margins and moderate leverage but currently lags on operating profitability due to elevated opex, with strong liquidity offering a buffer while management works to restore operating leverage.

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