| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥1844.7B | ¥1542.2B | +19.6% |
| Operating Income | ¥75.9B | ¥44.1B | +72.3% |
| Ordinary Income | ¥83.5B | ¥51.5B | +62.1% |
| Net Income | ¥37.7B | ¥21.9B | +72.6% |
| ROE | 6.5% | 4.8% | - |
For FY2026, Revenue reached ¥1,844.7B (YoY +¥302.5B +19.6%), Operating Income ¥75.9B (YoY +¥31.8B +72.3%), Ordinary Income ¥83.5B (YoY +¥32.0B +62.1%), and Net Income ¥37.7B (YoY +¥15.9B +72.6%), delivering substantial top- and bottom-line growth. Revenue rose about 20% driven by recovery in dining-out demand, improved store utilization and pricing policy effects; Operating margin improved to 4.1% from 2.9% a year ago (+1.2ppt). Profit growth was supported by top-line expansion and operating leverage as SG&A ratio decreased to 59.0% from 61.1% (-2.1ppt). Ordinary Income grew less than Operating Income due to higher interest expense (¥4.1B vs ¥2.0B prior year), though interest coverage remained healthy at 18.4x. Net Income diverged from Ordinary Income due to special losses of ¥12.2B (impairment losses ¥11.9B included) and a high effective tax rate of 47.6% (Income taxes ¥34.3B / Profit before tax ¥72.0B), with a tax burden coefficient of 0.524 constraining the Net margin to 2.0%.
[Revenue] Revenue was ¥1,844.7B (YoY +19.6%), a large increase driven by recovery in dining-out demand, improved store utilization rates, and pricing / menu mix revisions. Cost of sales was ¥679.7B (YoY +¥24.3B +3.7%), with cost rate at 36.8% (up 0.8ppt from 36.0% last year) reflecting cost inflation; however, Gross Profit rose substantially to ¥1,165.0B (YoY +¥278.2B +31.4%), keeping Gross Margin at a high level of 63.2% (down 0.7ppt from 63.9%).
[Profitability] Operating Income was ¥75.9B (YoY +72.3%), with an Operating margin of 4.1% (up 1.2ppt from 2.9%). SG&A was ¥1,089.1B (YoY +¥193.9B +21.7%), with an SG&A ratio of 59.0% (improved 2.1ppt from 61.1%), as fixed-cost absorption from higher revenue drove margin improvement. Non-operating income was ¥15.0B (YoY +¥2.5B) and non-operating expenses ¥7.5B (YoY +¥2.4B); interest income of ¥0.7B was offset by interest expense of ¥4.1B, reflecting higher borrowings. Ordinary Income was ¥83.5B (YoY +62.1%), Ordinary margin 4.5% (up 1.2ppt from 3.3%). Extraordinary gains were ¥0.8B versus extraordinary losses ¥12.2B (mainly impairment losses ¥11.9B), producing Profit before tax of ¥72.0B. Income taxes were ¥34.3B (effective tax rate 47.6%), resulting in Net Income of ¥37.7B (YoY +72.6%), with Net margin of 2.0%. In conclusion, the company achieved revenue and profit growth and improved profitability via operating leverage, but one-time impairment losses and high tax burden constrained the bottom line.
The Group operates a single segment: the foodservice business; no segmental disclosures are provided. Detailed sales composition is not disclosed, but demand recovery in domestic dining-out markets and store expansion across the group are driving revenue.
[Profitability] Operating margin was 4.1% (up 1.2ppt from 2.9%), Gross margin 63.2% (down 0.7ppt from 63.9%), and SG&A ratio 59.0% (improved 2.1ppt from 61.1%), with fixed-cost absorption from revenue growth contributing to improved profitability. Net margin was 2.0% (up 0.6ppt from 1.4%), but a high effective tax rate of 47.6% compresses margins. ROE was 6.5% (up 1.6ppt from 4.9%), supported by improved Net margin and higher financial leverage. [Cash Quality] Operating Cash Flow / Net Income was high at 4.07x, with depreciation and impairment (non-cash charges) contributing to solid earnings quality. Working capital slightly pressured cash due to Accounts receivable increase (▲¥10.3B), Accounts payable decrease (▲¥7.2B), and Inventory increase (▲¥6.8B), but OCF of ¥153.5B (YoY +84.4%) reached 4.07x Net Income. Accrual ratio was ▲8.2%, indicating limited divergence between profit and cash. [Investment Efficiency] Total asset turnover was 1.31x; assets expanded to ¥1,407.9B (from ¥1,041.5B, +35.2%) due to up-front investment, but turnover was maintained by higher sales. EPS was ¥196.74 (from ¥114.67, +71.6%), reflecting strong bottom-line growth. [Financial Soundness] Equity Ratio was 41.0% (down 2.8ppt from 43.8%) as debt increased. D/E ratio was 1.44x, with long-term borrowings at ¥414.6B (from ¥246.6B, +68.1%). Interest coverage was 18.4x (Operating Income ¥75.9B / Interest expense ¥4.1B), indicating sufficient interest-paying capacity. Current ratio was 150.2% and Quick ratio 145.0%, indicating healthy liquidity.
Operating Cash Flow was ¥153.5B (YoY +84.4%). From Operating CF subtotal of ¥178.3B, increases in working capital (Accounts receivable ▲¥10.3B, Inventory ▲¥6.8B, Accounts payable ▲¥7.2B) and corporate tax payments of ¥24.8B were deducted to arrive at the OCF balance. Operating CF / Net Income was 4.07x, showing excellent cash conversion driven by non-cash charges such as depreciation and impairments. Investing CF was ▲¥265.0B, including store and capital expenditures, acquisition of subsidiary shares (▲¥5.3B), and an increase in intangible assets (¥5.16B → ¥81.2B); capitalization of goodwill ¥74.3B indicates progress in M&A and business acquisitions. Free Cash Flow was ▲¥111.5B, reflecting an investment-led phase. Financing CF was ¥256.1B, funded by long-term borrowings ¥265.0B and equity issuance proceeds ¥86.8B, offset by short-term debt repayments ▲¥225.0B, dividend payments ¥4.6B, and lease liability repayments ¥9.9B. Cash and deposits rose to ¥306.8B (from ¥168.7B, +81.9%), strengthening liquidity. The decline in Accounts payable temporarily pressured OCF; attention to changes in settlement terms is warranted, but overall signs of working capital manipulation are limited.
Ordinary Income of ¥83.5B versus Net Income of ¥37.7B shows a divergence of ▲54.8%, primarily due to extraordinary losses ¥12.2B (impairment losses ¥11.9B) and high tax burden ¥34.3B (effective tax rate 47.6%). Non-operating income ¥15.0B equals 0.8% of Revenue; non-operating expenses ¥7.5B equal 0.4% of Revenue, both limited in scale. Composition is stable: interest income ¥0.7B, interest expense ¥4.1B, other non-operating income ¥4.6B, other non-operating expense ¥1.3B. Extraordinary losses ¥12.2B represent 32.4% of Net Income; impairment losses ¥11.9B are judged temporary and not expected to impair recurring earning power. OCF ¥153.5B / Net Income ¥37.7B = 4.07x and accrual ratio ▲8.2% indicate high earnings quality and strong cash generation. Comprehensive income ¥37.9B versus Net Income ¥37.7B shows minimal divergence (foreign currency translation adjustment ¥0.2B), so other comprehensive income impact is negligible. Core earnings are business-driven; given limited persistence of non-operating and extraordinary items, adjusted, underlying ROE and Net margins would be assessed as higher.
FY2027 full-year plan forecasts Revenue ¥2,150.0B (YoY +16.5%), Operating Income ¥82.0B (YoY +8.0%), Ordinary Income ¥84.0B (YoY +0.7%), and Net Income ¥38.0B (roughly flat). Revenue is planned to continue double-digit growth, but Operating margin is assumed to decline to around 3.8% from 4.1% this period, reflecting a conservative plan that incorporates cost increases and ramp-up costs for investments. Ordinary Income growth is expected to lag Operating Income due to anticipated higher interest expense from increased borrowings. Net Income is projected to be roughly flat, assuming continued high tax burden. Progress rates this period are Revenue 85.8% (¥1,844.7B/¥2,150.0B), Operating Income 92.6% (¥75.9B/¥82.0B), Ordinary Income 99.4% (¥83.5B/¥84.0B), and Net Income 99.3% (¥37.7B/¥38.0B), indicating the full-year plan is nearly secured and guidance is conservative. Forecast EPS ¥198.16 is broadly in line with actual ¥196.74. Dividend forecast ¥13.00 per share (halved from ¥24 this period) suggests capacity for future increases, though priority appears to be growth investment.
Annual dividend is ¥24 per share (interim ¥12, year-end ¥12), with Payout Ratio 13.1% (Dividend ¥24 / EPS ¥196.74), a conservatively set level. Total dividend amount was ¥4.6B, equal to 3.0% of Operating CF ¥153.5B, indicating ample capacity for dividend payments. Free Cash Flow was ▲¥111.5B during an investment phase; dividends were funded from OCF, while investment finance came from borrowings and equity issuance. Share buybacks were approximately ▲¥0.0B, effectively not executed, and Total Return Ratio equals the Payout Ratio at about 13.1%. The dividend forecast for FY2027 is ¥13.00 (half of current ¥24), but includes a commemorative year-end dividend of ¥1, so base ordinary dividend is not necessarily a cut. Payout Ratio 13.1% reflects a balance between growth investments and financial soundness, leaving room for phased dividend increases as investments yield returns, although near-term priority appears to be demonstrating investment payback.
Raw material and labor cost inflation: Cost of sales ratio rose to 36.8% from 36.0% (+0.8ppt), and SG&A ratio remains high at 59.0%. Maintaining Gross margin of 63.2% requires continued price pass-through and menu-mix improvement; if dining-out demand becomes more price-sensitive, customer traffic could decline. Since SG&A is largely fixed (labor, rent), slower revenue growth may reverse operating leverage.
Rising borrowings and interest-rate risk: Long-term borrowings expanded substantially to ¥414.6B (from ¥246.6B, +68.1%), increasing leverage (D/E 1.44x, Debt/Capital 41.8%). Interest expense doubled to ¥4.1B (from ¥2.0B), and in a rising-rate environment interest burden could further increase, compressing Ordinary Income. Interest coverage is healthy at 18.4x, but a combination of weaker operating income growth and higher rates would reduce financial safety.
Risk of additional impairments: The company recorded impairment losses of ¥11.9B this period (31.6% of Net Income) and newly recognized goodwill of ¥74.3B. Goodwill equals 12.9% of equity and is within reasonable range, but if recoverable values of acquired assets fall short of expectations, further impairment risk exists. Intangible assets increased rapidly from ¥5.16B to ¥81.2B, raising future amortization burden and impairment-testing exposure. Asset retirement obligations of ¥52.9B (6.4% of liabilities) also represent a potential future cash outflow risk for site restoration.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 4.1% | 4.6% (1.7%–8.2%) | -0.5ppt |
| Net Margin | 2.0% | 3.3% (0.9%–5.8%) | -1.3ppt |
Profitability is slightly below industry median, with high SG&A ratio depressing Operating margin and high tax burden compressing Net margin.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 19.6% | 4.3% (2.2%–13.0%) | +15.3ppt |
Revenue growth materially outpaced the industry median, driven by demand recovery and aggressive store openings / business expansion, placing the company among the higher-growth peers in retail/foodservice.
※Source: Company compilation
Strong revenue growth and realization of operating leverage: Revenue +19.6%, Operating Income +72.3%, with Operating margin improving to 4.1% (+1.2ppt). SG&A ratio declined 2.1ppt, and fixed-cost absorption from revenue growth drove margin improvement. Operating CF / Net Income of 4.07x indicates very high earnings quality and strengthens the business base. Continued recovery in dining-out demand and penetration of pricing policy could further enhance operating leverage.
Investment-led phase and rising financial leverage: Investing CF was ▲¥265.0B, with new goodwill ¥74.3B and sharp increase in intangible assets reflecting progressed M&A and business acquisitions. Long-term borrowings increased to ¥414.6B (YoY +68.1%), raising leverage to D/E 1.44x; however, interest coverage is 18.4x and cash on hand rose to ¥306.8B, supporting liquidity. Investment payback progress and interest-rate developments will be key to further ROE improvement and shareholder return expansion.
High tax burden and one-time losses constraining the bottom line: Effective tax rate 47.6% and tax burden coefficient 0.524 compress Net margin to 2.0%. Impairment losses ¥11.9B were one-off, but monitoring recoverable values of goodwill and fixed assets is important. If tax normalization and reduction of one-off losses occur, Net margin and ROE could further improve. Payout Ratio 13.1% is conservative and allows room for increases, but near-term priority appears to be investment recovery.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are compiled by the company from public financial statements and are for reference only. Investment decisions are your own responsibility; consult a professional advisor as necessary.