| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥2256.7B | ¥2049.8B | +10.1% |
| Operating Income / Operating Profit | ¥80.9B | ¥73.1B | +10.7% |
| Ordinary Income | ¥88.0B | ¥80.0B | +10.1% |
| Net Income / Net Profit | ¥24.0B | ¥-16.6B | +244.4% |
| ROE | 3.5% | -2.6% | - |
For the fiscal year ended February 2026, Revenue reached ¥2,256.7B (YoY +¥206.8B, +10.1%), Operating Income was ¥80.9B (YoY +¥7.8B, +10.7%), Ordinary Income was ¥88.0B (YoY +¥8.0B, +10.1%), and Net Income attributable to owners of the parent was ¥46.7B (YoY +¥42.9B, +227.0%), delivering growth in both top- and bottom-line. Revenue achieved double-digit growth for the third consecutive year. Although the core Yoshinoya segment posted a slight decline in Operating Income, profitability improvements at Hanamaru and overseas operations contributed to overall operating profit growth. Net Income recovered sharply from a prior-year loss of ¥-16.6B, primarily due to a reduction in net special losses of approximately ¥7.7B year-on-year (net ▲¥8.6B vs prior year ▲¥16.3B). The Operating Income margin remained at 3.6%, Gross Margin was high at 62.0% but SG&A ratio was also elevated at 58.4%, indicating limited operating leverage under cost inflation.
Revenue grew +10.1% to ¥2,256.7B, with all segments recording revenue increases. The Yoshinoya segment led with Revenue of ¥1,512.1B (+9.7%), Hanamaru ¥329.9B (+6.9%), Overseas ¥293.2B (+5.2%), and Other ¥148.2B (+34.9%), with peripheral businesses contributing. Solid same-store performance plus expansion of store openings and formats supported growth. Cost of sales rose to ¥856.9B (+11.1%), increasing faster than sales and causing Gross Margin to decline 2.0pt from 64.0% to 62.0%. Gross Profit was ¥1,399.8B (+8.7%), SG&A was ¥1,318.9B (+6.5%) and did not increase as much as sales, securing Operating Income of ¥80.9B (+10.7%). Operating margin was 3.6%, roughly unchanged, as sales growth absorbed cost increases but did not expand margins. Non-operating income/expense net was +¥7.2B (prior +¥6.9B), supported by interest income ¥1.7B, equity-method investment income ¥1.3B, and foreign exchange gains ¥2.3B, offsetting interest expense ¥3.7B. Ordinary Income was ¥88.0B (+10.1%), maintaining most of operating-level growth. Special gains/losses net was ▲¥8.6B (special gains ¥5.9B, special losses ¥14.5B), mainly impairment losses ¥10.3B, with net burden reduced by about ¥7.7B year-on-year. Profit before tax was ¥79.4B (+24.7%), income taxes ¥32.0B (effective tax rate 40.3%), and Net Income attributable to owners of the parent was ¥46.7B (+227.0%). In conclusion, revenue and operating profit growth combined with improved special items drove net profit recovery; operating-level gains were supported by margin improvements in Overseas and Hanamaru, while the slight Operating Income decline in core Yoshinoya remains a watch item.
Yoshinoya: Revenue ¥1,512.1B (+9.7%), Operating Income ¥76.2B (-2.1%), margin 5.0%. Revenue maintained double-digit growth, but Operating Income decreased slightly by ¥-1.6B YoY and margin fell 0.7pt from 5.7% to 5.0%, with absorption of higher raw material costs and labor expenses a challenge.
Hanamaru: Revenue ¥329.9B (+6.9%), Operating Income ¥24.3B (+21.0%), margin 7.4%. Highest margin among three segments, improving 0.9pt from 6.5% prior year. Cost efficiencies and price/average check improvements drove gains exceeding revenue growth.
Overseas: Revenue ¥293.2B (+5.2%), Operating Income ¥19.6B (+61.2%), margin 6.7%. Margin improved 2.3pt from 4.4% prior year as overseas store profitability rose significantly, aided by improvements across the US, China, and ASEAN regions.
Other: Revenue ¥148.2B (+34.9%), Operating Income ¥6.9B (+9.8%), margin 4.7%. Expansion of peripheral businesses contributed materially to revenue and profit growth.
Corporate-adjusted Operating Income was ¥80.9B, driven by margin improvements at Hanamaru and Overseas, while the slight decline in Yoshinoya—which accounts for 66.2% of revenue—poses portfolio concentration risk.
Profitability: Operating margin 3.6% is in line with prior year and 1.0pt below the industry median of 4.6%, placing the company in the lower range within the industry. Gross Margin 62.0% (prior 64.0%) remains high, but SG&A ratio 58.4% is also high, indicating limited cost absorption. Net margin 2.1% is 1.2pt below the industry median of 3.3%. ROE 6.8% (prior approx. 6.1%) slightly exceeds the industry median 5.9% but is below the three-year average, leaving room for improvement. ROA (ordinary income basis) 7.2% (prior 6.9%) is roughly flat against the three-year average 7.0%.
Cash Quality: Operating Cash Flow (OCF) ¥147.0B; OCF/Net Income is 3.15x, indicating high cash quality. OCF/Revenue 6.5%, Cash Conversion Rate (OCF/EBITDA) 0.93x is below industry median 1.57x, but cash generation after depreciation is solid. Accrual ratio ▲8.0% suggests low concern over accounting discretion.
Investment Efficiency: Total Asset Turnover 1.81x substantially exceeds industry median 1.17x, indicating high efficiency. CapEx/Depreciation 1.32x is near industry median 1.16x, reflecting a balanced growth and maintenance investment mix. ROIC (NOPAT / Invested Capital) is estimated at about 8.0%, in line with industry median 8.0%.
Financial Health: Equity Ratio 54.5% (prior 53.9%) exceeds industry median 50.2%, reflecting a solid capital structure. Current ratio 116.4% is below industry median 184%, and short-term liabilities ratio 50.9% indicates short-term funding concentration. Debt/EBITDA 0.88x (industry median net cash ▲0.59x) shows the presence of interest-bearing debt, but Interest Coverage 21.7x indicates adequate debt service capacity. Cash and deposits ¥216.4B, Cash/Short-term Debt 3.07x, providing a substantial liquidity cushion.
Operating Cash Flow was ¥147.0B (YoY +10.5%), demonstrating strong cash generation at 3.15x Net Income ¥46.7B. Operating cash subtotal (before working capital changes) was ¥167.9B, with non-cash additions including Depreciation ¥76.5B and Impairment Losses ¥10.3B. Working capital changes resulted in outflows totaling about ▲¥32.5B—Inventory increase ▲¥15.7B, Accounts Receivable increase ▲¥7.4B, Accounts Payable decrease ▲¥9.4B—but strong core OCF absorbed these. After tax payments ▲¥25.1B, OCF was ¥147.0B. Investing Cash Flow was ▲¥101.0B, mainly CapEx ▲¥100.8B, partially offset by proceeds from subsidiary share sales ¥5.8B and loan repayments received ¥3.8B. Free Cash Flow (OCF + Investing CF) was ¥46.0B, covering annual dividend payments ¥13.6B by approximately 3.2x and leaving room after executing growth investments. Financing Cash Flow was ▲¥34.1B, composed mainly of long-term borrowings repayment ▲¥65.1B, short-term borrowings raised +¥30.0B, dividend payments ▲¥13.6B, and lease liabilities repayments ▲¥16.5B. Cash and cash equivalents at period-end were ¥209.3B (prior ¥195.2B), a net increase of about ¥12.2B during the year. CapEx/Depreciation 1.32x indicates continued replacement and growth investment within cash generation capacity. Working capital outflows were driven by inventory accumulation and AR increases—an active stance matching demand—but monitor for deterioration in turnover or valuation loss risk.
Earnings quality is stable and primarily operating-derived, with Operating Income ¥80.9B and Ordinary Income ¥88.0B. Non-operating income/expense net was +¥7.2B, composed of low-volatility items such as interest income ¥1.7B, equity-method investment income ¥1.3B, and FX gains ¥2.3B, representing about 0.7% of Revenue—no excessive reliance. One-off items included Special Gains ¥5.9B (compensation income ¥5.5B, gain on sale of fixed assets ¥0.3B, etc.) and Special Losses ¥14.5B (impairment losses ¥10.3B, loss on retirement of fixed assets ¥2.7B, etc.), netting ▲¥8.6B. One-off items accounted for about 10.8% of profit before tax ¥79.4B, and the ~¥7.7B reduction in net one-off burden YoY was the main driver of Net Income recovery. The gap between Ordinary Income ¥88.0B and Net Income ¥46.7B is explained by a high effective tax rate of 40.3% and net negative special items. Accrual quality shows no signs of earnings management: OCF ¥147.0B vs Net Income ¥46.7B (3.15x), accrual ratio ▲8.0%, OCF/EBITDA 0.93x. Comprehensive income was ¥48.4B, about ¥1.7B higher than Net Income ¥46.7B, with FX translation adjustments +¥1.5B and valuation differences on securities +¥0.1B contributing; divergence between Net and Comprehensive Income is minimal.
Progress against full-year forecasts: Revenue 93.3% (actual ¥2,256.7B / forecast ¥2,420.0B), Operating Income 95.2% (actual ¥80.9B / forecast ¥85.0B), Ordinary Income 100.0% (actual ¥88.0B / forecast ¥88.0B), Net Income attributable to owners of the parent 95.2% (actual ¥46.7B / forecast ¥49.0B). Revenue and Operating Income slightly underperformed forecasts, Ordinary Income met forecast, and Net Income was roughly in line. Reasons for top-line shortfall include inventory buildup during the period, variability in customer traffic, and continued cost inflation. Operating-level results were about 4.8% below forecast, but non-operating contributions allowed Ordinary Income to meet guidance. EPS actual ¥72.08 vs forecast ¥75.71 reached 95.2% of plan. Annual dividend was ¥22 (interim ¥11 + year-end ¥11), unchanged from forecast with no revision, indicating shareholder returns executed as planned. Next fiscal year outlook was not disclosed in the financial release; market focus will be on measures addressing this year’s shortfall factors (inventory buildup, margin pressure in Yoshinoya segment, cost inflation) and continuation of profitability improvements at Hanamaru and Overseas.
Annual dividend ¥22 (interim ¥11, year-end ¥11), with Payout Ratio 34.0%. Payout Ratio is unchanged from prior year 34.0%, reflecting a stable dividend policy. Total dividends amount to approximately ¥13.6B, representing about 29.6% of Free Cash Flow ¥46.0B, preserving internal reserves and funds for growth investment. Share buybacks were effectively zero (CF ▲¥0.0B), so Total Return Ratio is also around 34.0% and conservative. Cash and deposits ¥216.4B and Net Assets ¥687.1B indicate ample dividend capacity, but sustainability of dividend policy depends on improving profitability given ROE 6.8% and Operating Margin 3.6%. Payout Ratio 34.0% is slightly above industry median 27.0%, but with high cash generation it is within a sustainable range. Historical dividends: ¥22 per share for FY2026, ¥20 per share for FY2025, indicating a modest uptrend.
Cost inflation pressure on margins: Continued rises in labor, rent, and food input prices are limiting Operating Margin to 3.6%. The decline in Yoshinoya’s operating margin to 5.0% (▲0.7pt from 5.7%) is notable; structural improvement through price pass-through, menu mix optimization, and operational efficiencies is urgent. Operating margins are below industry median 4.6%, increasing margin compression risk versus peers.
Business portfolio concentration risk: The Yoshinoya segment accounts for 66.2% of Revenue and approximately 94.3% of Operating Income (as a share of segment profits), indicating high single-business dependence. A profit decline at Yoshinoya would materially impact consolidated profits, making acceleration of Hanamaru and Overseas growth and portfolio diversification important.
Short-term liability concentration and liquidity risk: Short-term borrowings ¥70.5B (YoY +74.1%), short-term liabilities ratio 50.9%, and Current Ratio 116.4% (below industry median 184%) indicate limited resilience to short-term funding fluctuations. Inventory buildup (+30.5%) and liability reduction have driven working capital outflows; refinancing, maturity management, and maintaining cash cushions are critical.
Relative position within the Foodservice/Retail industry (reference, company analysis): Total Asset Turnover 1.81x (industry median 1.17x, top range) indicates high asset efficiency, but Operating Margin 3.6% (industry median 4.6%, lower range) and Net Margin 2.1% (industry median 3.3%, lower range) show profitability below industry average. ROE 6.8% slightly exceeds industry median 5.9%, but ROA 3.3% (industry median 3.3%) is comparable and reflects leverage utilization. Equity Ratio 54.5% (industry median 50.2%, upper range) and Net Debt/EBITDA 0.88x (industry median net cash ▲0.59x) indicate financial soundness above standard, though Current Ratio 116.4% (industry median 184%, lower) shows short-term liquidity lagging peers. Cash Conversion Rate 0.93x (industry median 1.57x, lower), CapEx/Depreciation 1.32x (industry median 1.16x, somewhat aggressive) indicate continued growth investment with cash generation below industry average. Inventory turnover days about 7.4 days (industry median 65.68 days, significantly shorter) places inventory efficiency among the best in the industry, but the current inventory buildup (+30.5%) warrants monitoring. Revenue growth +10.1% (industry median +4.3%, upper range) indicates strong growth, and Payout Ratio 34.0% (industry median 27.0%, somewhat high) suggests active shareholder returns. Overall, growth, asset efficiency, and financial health are in the upper industry range, while profitability metrics (Operating and Net margins) and cash conversion rate lag industry averages.
Segment portfolio margin improvement trend: Hanamaru Operating Margin 7.4% (up 0.9pt from 6.5%), Overseas Operating Margin 6.7% (up 2.3pt from 4.4%), indicating sustained margin improvements outside the core segment. If this trend continues, gradual improvement in consolidated Operating Margin is expected. Conversely, Yoshinoya’s margin decline (5.0%, ▲0.7pt) is structural and reversing it via pricing strategy, menu enhancements, and cost efficiencies will be a focal point next fiscal year.
High cash generation and capacity for growth investment: OCF ¥147.0B, Free Cash Flow ¥46.0B, and OCF/Net Income 3.15x demonstrate high earnings quality and cover dividend payments ¥13.6B by about 3.2x. Even after CapEx ¥100.8B, cash cushions remain, providing a financial base to balance growth investment and shareholder returns. Cash and deposits ¥216.4B and Debt/EBITDA 0.88x leave room for additional investments or M&A.
Monitoring short-term liquidity and inventory management: Short-term borrowings +74.1%, Inventory +30.5%, Current Ratio 116.4% point to significant short-term funding variability and working capital management challenges. Inventory buildup reflects proactive demand alignment but carries risks of turnover deterioration and valuation losses; next period’s inventory turnover days and working capital movements will determine cash flow stability. Refinancing plans and maintaining cash cushions are important.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.