YAMADA HOLDINGS CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥800.10B
• Operating Income: ¥21.67B
• Net Income: ¥12.87B
• EPS: ¥18.73

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Yamada Holdings reported FY2026 Q2 consolidated results with revenue of ¥800.1bn, up 0.5% YoY, indicating broadly flat top-line momentum. Despite the slight sales growth, operating income declined 6.7% YoY to ¥21.7bn, pointing to margin pressure and negative operating leverage in the period. Gross profit was ¥228.8bn, translating to a gross margin of 28.6%, which is within the typical range for large-format consumer electronics retail but insufficient to offset SG&A inflation at the operating line. Operating margin stood at 2.71%, while ordinary income of ¥24.0bn exceeded operating income by ¥2.3bn, suggesting positive non-operating contributions (e.g., financial income or equity-method gains) partially offset by ¥1.03bn in interest expense. Net income was ¥12.78bn, essentially flat YoY (+0.1%), implying that below-the-line items and taxes cushioned the operating decline. The DuPont bridge shows a reported ROE of 1.99%, driven by a 1.60% net margin, 0.60x asset turnover, and 2.08x financial leverage, highlighting a low-margin, moderate-turnover business with measured leverage. Liquidity is adequate with a current ratio of 139.6% and a quick ratio of 67.9%, though the inventory-heavy balance sheet (inventories ¥336.7bn, ~51% of current assets) underscores execution risk around sell-through and markdowns. Balance-sheet solvency appears solid: total equity of ¥640.8bn implies an equity ratio around 48% (computed), despite a reported equity ratio of 0.0% that reflects non-disclosure in the data feed. Interest coverage is comfortable at about 21x (operating income/interest expense), indicating manageable financial risk under current earnings power. Working capital is positive at ¥185.8bn, providing a buffer but tying up substantial capital in stock. The estimated effective tax rate is around 40.8% (computed from tax expense and net income), above Japan’s headline rate, which may reflect non-deductible items or valuation impacts. Cash flow statements and D&A were not disclosed in this dataset (zeros indicate non-reporting), limiting assessment of cash conversion and capex needs; accordingly, EBITDA and FCF metrics cannot be evaluated from the provided data. Dividends also appear undisclosed (DPS and payout reported as zero), so dividend policy and coverage cannot be inferred from this period’s data. Overall, the company delivered resilient bottom-line stability despite operating margin compression, supported by non-operating gains and disciplined financial structure. However, the slight decline in operating income against flat sales suggests cost pressure and/or mix deterioration, and the inventory build relative to sales warrants monitoring. Given these are mid-year results (Q2), seasonality may affect margins and working-capital metrics; full-year trends will be clearer with second-half performance.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 1.60% (¥12.78bn / ¥800.10bn)
• asset_turnover: 0.60x (Revenue / Assets; based on provided metric)
• financial_leverage: 2.08x (Assets/Equity ≈ ¥1,334.1bn / ¥640.8bn)
• calculated_ROE: 1.99% (matches reported)
• commentary: ROE is driven by low net margin typical of consumer electronics retail, moderate asset turnover, and moderate leverage. Improvements in operating margin and inventory efficiency would be the primary levers for ROE accretion. margin_quality: Gross margin is 28.6%, adequate but not expanding enough to offset SG&A growth; operating margin at 2.71% reflects pressure likely from wage, utilities, and promotional intensity. Ordinary margin of ~3.00% benefits from non-operating gains. The estimated effective tax rate (~40.8%) also constrains net margin. operating_leverage: With revenue +0.5% YoY and operating income -6.7% YoY, the period exhibits negative operating leverage. This indicates fixed-cost absorption challenges and/or adverse mix. Stabilizing SG&A intensity relative to sales will be key to restoring operating leverage in subsequent periods.

Growth Assessment

revenue_sustainability: Top-line growth was modest at +0.5% YoY, implying stable but subdued demand. Given the inventory-heavy position, sustaining sales will depend on product cycle attractiveness (e.g., white goods, seasonal appliances, and home-related categories) and competitive pricing. profit_quality: Ordinary income exceeded operating income by ¥2.3bn, implying reliance on non-operating items to support earnings. Net income stability (+0.1% YoY) masks underlying operating margin compression, which reduces the quality of growth. outlook: Absent disclosure of cash flows and D&A, visibility on capex-led initiatives and cash-funded growth is limited. Margin recovery hinges on SG&A control, sales mix (higher-margin categories/services), and inventory discipline. Second-half seasonality and promotional events will be critical for full-year run-rate.

Financial Health

liquidity: Current ratio 139.6% and quick ratio 67.9% indicate adequate short-term liquidity, but reliance on inventory (¥336.7bn) is high. Working capital of ¥185.8bn provides cushion but ties capital to stock. solvency: Total liabilities of ¥679.7bn vs equity of ¥640.8bn yield a debt-to-equity of ~1.06x (broad liabilities basis). Interest coverage is strong at ~21x, suggesting manageable debt service. Computed equity ratio is ~48.0% (equity/assets), despite the undisclosed reported figure. capital_structure: Financial leverage at 2.08x is moderate. Ordinary income benefits from non-operating items despite ¥1.03bn in interest expense, implying the presence of interest income or other financial gains.

Cash Flow Quality

earnings_quality: Assessment constrained by lack of disclosed cash flow data (OCF, capex, and FCF not reported). With net income of ¥12.78bn and positive interest coverage, earnings appear serviceable, but cash conversion cannot be verified. FCF_analysis: Free cash flow cannot be computed due to undisclosed operating and investing cash flows and D&A. As such, EBITDA and OCF/NI metrics shown as zero are placeholders and should not be interpreted as actual values. working_capital: Inventories of ¥336.7bn constitute ~51% of current assets and ~25% of total assets, indicating significant working capital embedded in stock. This elevates execution risk around turnover and margin if sell-through slows or discounting intensifies.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are reported as zero in the dataset, indicating non-disclosure rather than an actual suspension. With net income positive and leverage moderate, the capacity for distributions cannot be assessed without OCF and historical policy context. FCF_coverage: Not assessable; OCF and capex are undisclosed, rendering FCF coverage metrics unavailable. policy_outlook: Dividend policy cannot be inferred from the provided data. Future visibility depends on disclosed cash generation, capex needs, and management’s capital allocation stance.

Risk Assessment

Business Risks:

• Margin pressure from promotional intensity and price competition in consumer electronics retail
• Inventory obsolescence and markdown risk given high inventory levels
• Cost inflation (labor, utilities, logistics) stressing SG&A and gross margin
• Product cycle dependence and demand cyclicality
• Seasonality concentration in the second half and event-driven sales
• Potential shift to online channels compressing store economics

Financial Risks:

• Negative operating leverage if sales growth remains muted
• Tax rate volatility (estimated ~40.8%) reducing net margin
• Exposure to interest rate changes, albeit currently covered (~21x)
• Working capital intensity increasing cash needs during downturns

Key Concerns:

• Operating income decline despite slight sales growth
• High inventory share of assets, elevating execution risk
• Earnings reliance on non-operating gains to bridge operating shortfall
• Limited cash flow disclosure constraining assessment of earnings quality and dividend capacity

Investment Implications

Key Takeaways:

• Stable revenue but operating margin compression indicates negative operating leverage
• ROE of ~2.0% reflects low net margins and moderate asset turnover
• Liquidity adequate; solvency solid with computed equity ratio near 48%
• Ordinary income supported by non-operating gains; interest burden manageable
• Cash flow and D&A data not disclosed, limiting FCF and EBITDA analysis
• Inventory-heavy balance sheet requires tight sell-through and markdown control

Metrics to Watch:

• Operating margin trend and SG&A-to-sales ratio
• Inventory turnover days and markdown rates
• Ordinary income composition (non-operating income vs. core operations)
• Effective tax rate normalization toward statutory levels
• Interest coverage amid potential rate shifts
• Disclosure of OCF, capex, and FCF in subsequent filings

Relative Positioning: Within Japan’s consumer electronics/home appliance retail segment, the company exhibits typical low operating margins but maintains a comparatively solid balance sheet with moderate leverage; near-term differentiation will hinge on margin discipline, inventory efficiency, and mix shift toward higher-margin categories and services.

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
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