| Metric | Current | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥393.6B | ¥350.3B | +12.3% |
| Operating Income / Operating Profit | ¥29.8B | ¥20.6B | +44.6% |
| Ordinary Income | ¥30.5B | ¥21.3B | +42.6% |
| Net Income / Net Profit | ¥16.2B | ¥13.6B | +19.3% |
| ROE | 8.2% | 7.6% | - |
For FY2026, the company achieved revenue of ¥393.6B (YoY +¥43.3B +12.3%), Operating Income of ¥29.8B (YoY +¥9.2B +44.6%), Ordinary Income of ¥30.5B (YoY +¥9.1B +42.6%), and Net Income attributable to owners of the parent of ¥16.2B (YoY +¥2.6B +19.3%), delivering both top-line and bottom-line growth. Operating margin improved to 7.6% (prior year 5.9%), up 1.7pt, reflecting a material enhancement in core profitability. Although the company recorded Special Losses of ¥8.0B (of which Impairment Losses were ¥7.5B), significant improvement at the operating level secured double-digit growth in final profit. Operating Cash Flow (OCF) was ¥37.2B (YoY +67.6%), approximately 2.3x Net Income, demonstrating robust cash generation. Equity Ratio rose to 72.5% (prior year 70.4%), further strengthening the essentially debt-free financial position.
[Revenue] Top-line reached ¥393.6B (YoY +12.3%), achieving double-digit growth. Recovery in dining-out demand and progress in store investment likely contributed through improved same-store utilization and higher average spend per customer. Gross margin improved to 68.5% (prior year 68.1%), +0.4pt, indicating effective control of raw material costs and improved menu mix. Segment disclosure is limited to the "Foodservice Business," so regional and business-format breakdowns are not disclosed, but double-digit consolidated growth indicates a company-wide recovery trend.
[Profitability] Gross profit expanded to ¥269.4B (+13.0%), outpacing revenue growth and aided by margin improvement. SG&A was ¥239.7B (+9.9%), controlled below the revenue growth rate, and the SG&A ratio improved to 60.9% (prior year 62.2%), -1.3pt. As a result, Operating Income rose substantially to ¥29.8B (+44.6%), and operating margin improved 1.7pt to 7.6% (prior year 5.9%). Non-operating items produced net income of ¥0.7B (dividends received ¥0.3B, foreign exchange losses ¥0.1B, etc.), broadly in line with prior year. Ordinary Income was ¥30.5B (+42.6%), reflecting operating improvement. Extraordinary items resulted in a net loss of ¥6.7B (extraordinary gains ¥1.2B, extraordinary losses ¥8.0B), primarily due to impairment losses of ¥7.5B. Profit before income taxes was ¥23.7B (+38.5%), income taxes were ¥7.5B (effective tax rate 31.7%), yielding Net Income attributable to owners of the parent of ¥16.2B (+19.3%). Comprehensive income was ¥21.3B, with valuation gains on securities of ¥5.2B contributing to comprehensive income exceeding net income. In conclusion, revenue and profit grew, with operating leverage improvement and absorption of special losses delivering double-digit growth in final profit.
[Profitability] Operating margin 7.6% (prior year 5.9%), Net Income margin 4.1% (prior year 3.9%), indicating operating improvement flowed through to the bottom line. ROE 8.2% (prior year 7.8%) improved despite accumulation of equity, confirming enhanced profitability. Gross margin of 68.5% remains high for the foodservice sector, indicating appropriate cost control. [Cash Quality] OCF / Net Income is 2.3x; OCF / EBITDA (Operating Income + Depreciation) is 0.95x (EBITDA calculated at ¥39.2B), both indicating sound levels and strong cash backing for reported profits. The accrual ratio ((Net Income − OCF) / Total Assets) is −7.7%, a negative value supporting a cash-driven earnings structure. [Investment Efficiency] Capital expenditures were ¥32.7B, roughly 3.5x depreciation of ¥9.4B, consistent with a growth investment phase. ROIC (EBIT ÷ (Interest-bearing debt + Net Assets)) is estimated around 15.0%, favorable for an early stage of investment recovery. [Financial Soundness] Equity Ratio 72.5%, Debt/Equity 0.0x (interest-bearing debt ¥0.6B, effectively debt-free), Current Ratio 142%, Quick Ratio 137%, indicating an extremely solid financial position. Interest Coverage (Operating Income ÷ Interest Expense) is 2326x, extremely high, showing no issue with interest-bearing capacity.
Operating Cash Flow (OCF) was ¥37.2B (YoY +67.6%). Starting from an OCF subtotal of ¥40.1B including depreciation of ¥9.4B, adjustments for working capital movements (inventory increase ¥2.1B, trade receivables increase ¥1.9B, trade payables increase ¥0.4B, etc.) and corporate tax payments of ¥3.5B lead to the reported OCF. OCF is 2.3x Net Income of ¥16.2B; non-cash charges including depreciation and impairment losses of ¥7.5B boosted the OCF subtotal. Investing Cash Flow was −¥33.6B, driven mainly by capital expenditures of ¥32.7B, approximately 3.5x depreciation, reflecting active store investment and renovations. Other investing outflows of ¥0.7B are included, consistent with a growth investment phase. Financing Cash Flow was −¥16.1B, primarily due to repayment of long-term borrowings of ¥13.1B and dividend payments of ¥3.0B, resulting in reduced interest-bearing debt. Free Cash Flow was ¥3.6B (OCF ¥37.2B + Investing CF −¥33.6B), which nearly covers dividend payments of ¥3.0B, indicating cash robustness for dividends. Cash and deposits decreased by ¥6.1B to ¥57.3B (prior year ¥63.4B), but liquidity remains ample, supporting both active investment and dividend payments.
Ordinary Income of ¥30.5B versus Net Income attributable to owners of the parent of ¥16.2B shows a divergence of about 1.9x, primarily due to Special Losses of ¥8.0B (Impairment Losses ¥7.5B, loss on retirement of fixed assets ¥0.3B, etc.). Impairment losses are one-off charges associated with reassessment of profitability of store assets and equipment, and there is potential for profit pickup in future periods as a rebound. Non-operating income was ¥0.7B, mainly dividends received ¥0.3B, indicating low reliance on non-core income. Comprehensive income of ¥21.3B exceeded Net Income by ¥5.1B, mainly due to valuation gains on securities of ¥5.2B, which increased net assets. The accrual ratio of −7.7% (negative) confirms OCF substantially exceeds Net Income, supporting strong cash generation. Non-cash expenses including depreciation of ¥9.4B and impairment losses of ¥7.5B inflated the OCF subtotal, and cash-based earnings are very solid. From an accounting-quality perspective, excluding the one-off special losses, ordinary-level profits are reliably converting to cash, so overall financial health is high.
Full Year guidance projects Revenue of ¥405.0B (YoY +2.8%), Operating Income ¥24.0B (YoY −19.4%), Ordinary Income ¥24.5B (YoY −19.5%), and EPS ¥39.83. At period-end, progress rates vs. full-year guidance are: Revenue 97.2% (¥393.6B ÷ ¥405.0B), Operating Income 124.2% (¥29.8B ÷ ¥24.0B), Ordinary Income 124.5% (¥30.5B ÷ ¥24.5B), indicating the operating and ordinary stages have materially exceeded full-year guidance. Progress for Net Income is not disclosed, but actual EPS of ¥53.72 compared to guidance EPS ¥39.83 is approximately 135%, indicating final profit is also pacing ahead of forecast. The company had forecast a YoY −19.4% decline in Operating Income at the start of the year, while actuals show +44.6% growth, suggesting operating improvements and expense control exceeded initial assumptions. While revenue guidance is conservative at +2.8% versus actual +12.3%, demand recovery likely outpaced expectations. If no guidance revision has been announced, this may reflect a cautious stance for H2, but given H1 results there is ample room for upside to full-year guidance.
Year-end dividend is ¥12, and total dividends of ¥3.0B (based on Net Income attributable to owners of the parent ¥16.2B and shares outstanding 30,301 thousand shares − treasury stock 18 thousand shares) imply a Payout Ratio of approximately 18.5%. Based on actual EPS of ¥53.72, a DPS of ¥12 yields a Payout Ratio of 22.3%, a modest level that indicates priority on internal reserves for growth investment. With Free Cash Flow of ¥3.6B and dividend payments of ¥3.0B, FCF coverage of dividends is about 1.2x (dividend ÷ FCF), broadly satisfactory and supporting the cash sustainability of dividends. No share buybacks were executed this period (¥0.0B in the cash flow statement), so shareholder returns are currently limited to dividends. The full-year dividend forecast remains ¥12, implying a year-end lump-sum dividend policy. Given the low payout ratio around 20%, there is considerable room for dividend increases tied to future profit growth. Considering strong OCF and near-zero interest-bearing debt, dividend sustainability is high and coexistence with growth investment is feasible.
Risk of persistently high SG&A ratio: SG&A ratio remains high at 60.9%, with significant fixed-cost burden from wages and rent. If wage increases and labor shortages persist, higher SG&A could pressure operating margins. Although the current period saw a 1.3pt improvement in SG&A ratio due to double-digit revenue growth, should revenue growth decelerate, operating leverage may reverse and margins could deteriorate.
Risk of recurring impairment losses: The company recorded impairment losses of ¥7.5B this period as store and equipment asset profitability was reassessed. As new store openings and renovation investments continue, if investment recovery does not proceed as planned for some stores, additional impairment recognition could materially depress Net Income. Capital expenditures are proceeding at roughly 3.5x depreciation, underscoring the importance of monitoring investment efficiency.
Future burden of asset retirement obligations: Asset retirement obligations of ¥6.6B (about 8.8% of total liabilities) represent future expenditures related to store closures and restoration and may cause temporary cash outflows and profit impacts when store portfolio restructuring or disposal of unprofitable stores accelerates. Alignment of store life-cycle and renewal plans will be important.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.6% | 4.6% (1.7%–8.2%) | +3.0pt |
| Net Income Margin | 4.1% | 3.3% (0.9%–5.8%) | +0.8pt |
Both operating and net margins exceed industry medians, securing relatively high profitability within the retail / foodservice sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 12.3% | 4.3% (2.2%–13.0%) | +8.0pt |
Revenue growth rate exceeds the industry median by 8.0pt, driven by demand recovery and investment effects, delivering strong growth within the sector.
※ Source: Company compilation
Marked improvement in operating profitability is evident, with Operating Margin at 7.6% (+1.7pt), demonstrating operating leverage from absorption of SG&A. Recovery in dining demand and improved store utilization underpin structural improvement in the core business, with sustainability expected. The key watchpoint going forward is whether the SG&A improvement trend can be maintained if revenue growth slows.
The company is executing active growth investment (CapEx ¥32.7B, about 3.5x depreciation), and future sales and efficiency gains from store expansion and renovations are expected. However, the recording of impairment losses of ¥7.5B highlights that the track record of investment recovery and disclosure of store-level profitability are important for investment decisions. Strong OCF provides investment capacity, but improvement in ROIC will be an evaluation point in subsequent periods.
Financial position is extremely healthy: Equity Ratio 72.5%, effectively debt-free, and OCF ¥37.2B with strong cash generation. Payout ratio is around 20%, conservative, offering flexibility for both dividend increases and investment funding. Considering the one-off nature of special losses, normalization of final profit from next fiscal year could lead to improvements in ROE and stronger shareholder returns.
This report was automatically generated by AI analyzing XBRL financial statement data and is a financial analysis document. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are compiled by the company based on public financial statement data and are for reference only. Investment decisions are your responsibility; please consult a professional advisor as appropriate before making investment decisions.