Joyfull Co., Ltd. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥19.32B
• Operating Income: ¥1.81B
• Net Income: ¥1.82B
• EPS: ¥36.57

Income Statement

Balance Sheet

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

Joyfull posted FY2026 Q1 consolidated revenue of ¥19.319bn, up 4.8% YoY, but operating income decreased 14.9% to ¥1.812bn, indicating negative operating leverage despite top-line growth. Gross profit was ¥12.106bn, implying a high gross margin of 62.7%, but SG&A and other operating costs (implied at ~¥10.294bn) absorbed most of the gross profit. Ordinary income was ¥1.817bn, nearly identical to operating income, reflecting limited non-operating gains/losses and modest interest burden. Net income fell 37.8% YoY to ¥1.130bn, with an implied net margin of 5.85%, highlighting margin compression at the bottom line. DuPont analysis yields ROE of 8.29%, decomposed into a 5.85% net margin, 0.589x asset turnover, and 2.41x financial leverage. Asset turnover is moderate for a restaurant operator, while leverage at 2.41x (assets/equity) is within a typical range for the sector. Liquidity is tight: the current ratio is 56.7% and working capital is negative at ¥-4.716bn, which is common in food service models but still a near-term funding consideration. Solvency appears manageable with liabilities/equity at 1.41x and strong interest coverage of 72.5x, supported by a low absolute interest expense (¥25m). The effective tax burden, approximated from disclosed tax expense, is roughly 20–21%, contradicting the zero shown in the summary metrics (zeros reflect non-disclosure, not actual values). Cash flow data (OCF, FCF) and D&A were not disclosed in this filing, limiting assessment of earnings-to-cash conversion and capex intensity this quarter. Dividends were not disclosed (DPS and payout ratio show zero due to non-reporting), so distribution policy and sustainability cannot be judged from this dataset. Net profit decline outpaced operating profit decline, suggesting either higher tax burden, minority interests, or other below-the-line effects; with tax expense of ¥294m, the implied ETR is roughly 20.6%. Overall, Joyfull demonstrated resilient revenue growth but weaker operating leverage, as SG&A pressures outweighed top-line gains. Balance sheet strength is adequate from a solvency standpoint, but short-term liquidity remains a watchpoint given negative working capital. The lack of cash flow disclosure is a key limitation for evaluating earnings quality and dividend capacity this quarter. Management’s ability to stabilize costs (labor, food, utilities) will be critical to restoring operating margin and sustaining ROE around the high-single-digit level. Outlook hinges on same-store traffic, price mix, and cost normalization; absent cost relief or stronger sales growth, margin recovery could be gradual.

Profitability Analysis

ROE_decomposition: ROE 8.29% = Net Margin 5.85% x Asset Turnover 0.589x x Financial Leverage 2.41x. margin_quality: Gross margin is high at 62.7%, but operating margin is 9.4% (¥1.812bn/¥19.319bn), implying SG&A intensity of ~53.3% of sales (¥10.294bn). Net margin declined to 5.85%, reflecting cost pressures and a normalized tax burden. Ordinary income margin (9.4%) is close to operating margin, indicating minimal contribution from non-operating items. operating_leverage: Revenue grew +4.8% YoY while operating income fell -14.9% YoY, evidencing negative operating leverage this quarter, likely from higher labor, food, or utilities diluting incremental gross profit.

Growth Assessment

revenue_sustainability: Top-line growth of +4.8% indicates stable demand and/or price mix support. Without segment/SSS disclosure, the durability of growth (traffic vs. pricing) cannot be disaggregated. profit_quality: Profit growth lagged revenue, with operating income down and net income down more sharply (-37.8% YoY). The high gross margin suggests menu or format advantages, but SG&A inflation eroded conversion to operating profit. outlook: Absent visibility on cost normalization and same-store momentum, near-term growth in earnings will depend on tighter cost control and operating efficiency. If cost pressures persist, margin expansion may be limited even with modest sales growth.

Financial Health

liquidity: Current assets ¥6.175bn vs. current liabilities ¥10.891bn → current ratio 56.7%; quick ratio ~50.1% given inventories of ¥0.716bn. Working capital is negative at ¥-4.716bn, a common sector trait but a liquidity watchpoint. solvency: Total liabilities ¥19.215bn vs. equity ¥13.629bn → liabilities/equity 1.41x. Assets ¥32.815bn imply assets/equity ~2.41x. Interest coverage is strong at 72.5x due to low interest expense (¥25m). capital_structure: Equity ratio by calculation is ~41.5% (¥13.629bn/¥32.815bn), despite the reported 0.0% placeholder. Leverage is moderate for the industry, but short-term funding reliance is elevated given negative working capital.

Cash Flow Quality

earnings_quality: OCF, FCF, and D&A were not disclosed this quarter (zeros reflect non-reporting). Therefore, accrual intensity, cash conversion of earnings, and maintenance vs. growth capex cannot be assessed from this dataset. FCF_analysis: Free cash flow cannot be computed without OCF and capex details. Interest burden is low, which supports resilience once cash generation is confirmed. working_capital: Negative working capital (¥-4.716bn) implies supplier/customer financing supports operations; monitoring payables days, inventory turns, and receivables is important once disclosed.

Dividend Sustainability

payout_ratio_assessment: EPS is ¥36.57, but DPS and payout ratio were not disclosed (zeros are placeholders). Without cash flow data, payout capacity cannot be evaluated. FCF_coverage: Not measurable due to absent OCF/FCF disclosure. policy_outlook: Dividend policy visibility is limited this quarter. Sustainable distributions would require stable OCF and manageable working capital needs; current solvency appears adequate, but liquidity metrics suggest prudence.

Risk Assessment

Business Risks:

• Input cost inflation (food, labor, utilities) pressuring margins
• Same-store traffic volatility and price elasticity risk
• Competitive intensity in family restaurant and casual dining segments
• Regional demand fluctuations and seasonality
• Execution risk in cost control and productivity initiatives

Financial Risks:

• Tight liquidity with current ratio 56.7% and negative working capital
• Potential refinancing or short-term funding dependence
• Exposure to variable interest rates (though current interest burden is low)
• Lease obligations (not disclosed here) potentially elevating fixed-charge coverage risk
• Limited visibility on capex and cash generation due to non-disclosure of cash flows

Key Concerns:

• Negative operating leverage despite revenue growth
• Insufficient disclosure on cash flows and D&A this quarter
• Margin sensitivity to wage and utility costs

Investment Implications

Key Takeaways:

• Revenue growth was solid at +4.8% YoY, but operating income declined -14.9% due to cost pressures.
• ROE of 8.29% is supported by moderate leverage and a 5.85% net margin, but margin compression is a headwind.
• Liquidity is tight (current ratio 56.7%, negative working capital), though solvency and interest coverage are comfortable.
• Cash flow and dividend visibility are low due to non-disclosure of OCF/FCF and DPS.

Metrics to Watch:

• Same-store sales growth (traffic and average ticket)
• Food, labor, and utilities cost ratios and SG&A as % of sales
• Operating margin and ordinary income margin progression
• OCF/Net income conversion and capex once disclosed
• Working capital trends (payables, inventory turns, receivables days)
• Leverage and equity ratio (calculated ~41.5%)
• ROE components: asset turnover and net margin

Relative Positioning: Within Japanese family restaurant peers, Joyfull shows respectable gross margins and strong interest coverage, but weaker near-term operating leverage and tighter liquidity compared to some larger chains; disclosure gaps on cash flows constrain full comparability this quarter.

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