| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue | ¥512.7B | ¥522.9B | -1.9% |
| Operating Income | ¥31.6B | ¥40.4B | -21.8% |
| Ordinary Income | ¥32.6B | ¥41.3B | -21.0% |
| Net Income attributable to owners of parent | ¥19.1B | ¥25.5B | -25.1% |
| ROE | 6.2% | 8.6% | - |
The FY2026 Q2 results showed Revenue of ¥512.7B (YoY -¥10.2B, -1.9%), Operating Income of ¥31.6B (YoY -¥8.8B, -21.8%), Ordinary Income of ¥32.6B (YoY -¥8.7B, -21.0%), and Net Income attributable to owners of parent of ¥19.1B (YoY -¥6.4B, -25.1%), representing declines in both top and bottom lines. Although Revenue declined only slightly, the SG&A ratio rose from 41.9% in the prior year to 43.4% (+1.5pt), compressing the operating margin from 7.7% to 6.2% (-1.5pt). In addition, special losses including impairment losses of ¥1.6B led to a double-digit decline in net profit. Gross margin only fell slightly to 49.5% from 49.7% (-0.2pt), and non-operating items were broadly neutral, so the primary driver of the profit decline was expansion of SG&A.
【Revenue】 Revenue of ¥512.7B represented a slight decline of -1.9% YoY. As a single segment company (product sales centered on bags and related items), detailed disclosure by region or product is not provided, but the slowdown in same-store sales combined with opening/renovation ramp-up effects is presumed. Gross margin was 49.5%, down 0.2pt from 49.7% a year earlier, and gross profit decreased -2.2% to ¥254.0B (prior year ¥259.8B). Inventory rose to ¥128.9B from ¥124.8B (+3.2%), and inventory turnover days remained elevated at 182 days, which may have weighed on maintaining gross margin due to lower inventory efficiency.
【Profitability】 Operating Income of ¥31.6B marked a substantial decline of -21.8% YoY. SG&A increased to ¥222.3B (prior year ¥219.4B), up +1.3%, and the SG&A ratio rose to 43.4% from 41.9% (+1.5pt). Fixed cost increases during a period of declining sales caused operating leverage to work in reverse, shrinking the operating margin to 6.2% (-1.5pt). Non-operating items were broadly unchanged, with interest income ¥0.9B and interest expense ¥0.3B, net +¥0.6B, resulting in Ordinary Income of ¥32.6B, down -21.0% similar to operating income. Special losses totaled ¥2.0B (impairment losses ¥1.6B, loss on disposal of fixed assets ¥0.4B), slightly above ¥1.6B a year earlier, and pre-tax income fell to ¥30.6B from ¥39.7B (-23.0%). Income taxes amounted to ¥11.5B, with an effective tax rate of 37.7% (up from 35.9% prior year), leading to Net Income attributable to owners of parent of ¥19.1B, a decline of -25.1%. In conclusion, the company experienced declines in both revenue and profit, with the increase in SG&A ratio significantly compressing profitability.
【Profitability】Operating margin of 6.2% fell 1.5pt from 7.7% a year earlier. Gross margin remained high at 49.5% (prior year 49.7%), but the rise in SG&A ratio to 43.4% (prior year 41.9%) pressured profitability. Net profit margin was 3.7%, down 1.2pt from 4.9% prior year. ROE was 6.2%, down from 8.9% prior year, mainly due to the contraction in net profit margin. 【Cash Quality】Operating Cash Flow (OCF) was ¥26.7B, 1.4x Net Income of ¥19.1B, indicating solid cash backing of profits, but the OCF/EBITDA ratio was 0.71x against EBITDA of ¥37.4B, below the benchmark 0.9x, with inventory increase (inventory cash absorption -¥4.0B) weighing on working capital. Inventory turnover days extended to 182 days; combined with receivables days 30 and payables days 46, the CCC lengthened to 166 days. 【Investment Efficiency】Total asset turnover was stable at 1.23x, and tangible fixed asset turnover remained highly efficient at 7.23x. Capital expenditure was ¥20.5B, about 3.5x depreciation of ¥5.8B, indicating active investment; tangible fixed assets increased to ¥70.9B (+26.1% YoY) and land rose to ¥25.3B (+61.3% YoY). Construction in progress of ¥8.9B was recorded, suggesting continued opening/renovation investment. 【Financial Soundness】Equity Ratio was 74.0%, improved from 73.3% prior year; liquidity is very high with current ratio 326.8% and quick ratio 145.4%. Interest-bearing debt was ¥13.0B (short-term borrowings ¥0.0B, long-term borrowings ¥5.0B, lease liabilities ¥4.4B, repayments due within one year ¥8.0B), down from ¥13.5B prior year. Debt/EBITDA was 0.35x and interest coverage was 103.2x, indicating very strong financial resilience.
OCF was ¥26.7B, down -14.4% from ¥31.3B a year earlier. The subtotal of operating cash before working capital was ¥36.0B, which adds depreciation of ¥5.8B etc. to pre-tax income of ¥30.6B; working capital absorbed cash notably via inventory increase of -¥4.0B and tax payments of -¥10.0B, which pressured OCF. Investing Cash Flow was -¥19.5B, primarily due to acquisition of tangible fixed assets -¥20.5B, while sales of investment securities +¥20.0B and purchases -¥18.0B largely offset. Free Cash Flow was ¥7.2B, positive but down -73.2% from ¥26.9B prior year. Financing Cash Flow was -¥7.0B, driven by dividend payments -¥8.7B, long-term borrowings repayment -¥2.0B and borrowings +¥5.0B, and lease liability repayments -¥1.7B. Cash and cash equivalents remained largely flat at ¥57.6B vs ¥57.3B prior year, sufficient to cover capex and dividends. The decline in OCF was mainly due to inventory increases and profit decline; normalizing inventory turnover is key to restoring cash generation next term.
Against Ordinary Income of ¥32.6B, non-operating items were a net +¥1.0B, primarily interest income of ¥0.9B, a stable income source. Special losses of ¥2.0B (impairment losses ¥1.6B and loss on disposal of fixed assets ¥0.4B) are one-off factors. Comprehensive income was ¥22.2B, ¥3.1B above Net Income of ¥19.1B, mainly due to actuarial gains/losses adjustments related to retirement benefits of +¥3.8B. Unrealized gains/losses on securities were -¥0.7B, minor, and comprehensive income contributed significantly to equity. Looking at the operating cash subtotal before working capital of ¥36.0B, this level equals Net Income ¥19.1B plus non-cash expenses such as depreciation/amortization and goodwill amortization of ¥6.4B and impairment/allowance provisions of ¥10.5B; accruals (the gap between accrual profit and cash) are somewhat large but mainly reflect inventory increases and special losses. The quality of recurring earnings is generally good, and excluding one-off factors the company maintains a stable cash-generation structure.
Full Year guidance forecasts Revenue ¥535.1B (YoY +4.4%), Operating Income ¥33.5B (YoY +5.8%), Ordinary Income ¥34.3B (YoY +5.1%), and Net Income attributable to owners of parent ¥21.1B (YoY +10.7%), projecting growth in both revenue and profit. At Q2, progress rates are Revenue 95.8%, Operating Income 94.3%, Ordinary Income 95.0%, and Net Income 90.4%, which are high levels but substantially exceed the simple time-apportioned ratio of 50.0%, indicating the plan assumes profit accumulation in H2. Year-end dividend forecast remains ¥0, keeping total annual dividend at ¥35 including the interim dividend of ¥35, and the planned Payout Ratio is 48.1%. Achieving full-year guidance assumes SG&A efficiency improvements in H2, gross margin improvement through inventory normalization, and monetization of opening/renovation investments.
Annual dividend is ¥35 (year-end ¥35, interim ¥0), unchanged from the prior year, with a Payout Ratio of 53.3%. The increase from the prior year Payout Ratio of 34.3% reflects the decline in Net Income and indicates a stance to maintain dividends. No share buybacks were conducted; total return amount was ¥8.7B and the Total Return Ratio was 53.3%, reflecting dividends only. Dividend payments of ¥8.7B exceeded Free Cash Flow of ¥7.2B by ¥1.2B, partly funded from cash on hand. A Payout Ratio in the 50% range is sustainable, and the full-year plan maintains a Payout Ratio of 48.1% and a policy of stable dividends. The sustainability of future dividends depends on OCF recovery through improved inventory efficiency and monetization of capital investments.
Inventory turnover risk: Inventory of ¥128.9B increased +3.2% YoY and inventory turnover days extended to 182 days. Prolonged inventory retention could lead to markdown pressure or obsolescence losses, making it difficult to maintain the 49.5% gross margin. A prolonged CCC of 166 days strains working capital and can delay OCF improvement.
SG&A control risk: SG&A ratio of 43.4% rose 1.5pt from 41.9% prior year. Continued inflation in fixed costs such as personnel, store-related expenses, and logistics could further compress the 6.2% operating margin. SG&A efficiency in H2 is a prerequisite for achieving guidance.
Investment recovery risk: Tangible fixed assets increased +26.1% and capex is 3.5x depreciation, indicating aggressive investment; however, delayed ramp-up of openings/renovations or continued weak same-store sales could extend investment payback periods, lower ROIC, and increase impairment risk. The timing of monetization for construction in progress of ¥8.9B is a key watch item.
Profitability / Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 6.2% | 4.6% (1.7%–8.2%) | +1.6pt |
| Net Profit Margin | 3.7% | 3.3% (0.9%–5.8%) | +0.4pt |
Within the retail sector, both operating margin and net profit margin exceed the medians, placing the company relatively favorably on profitability.
Growth / Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | -1.9% | 4.3% (2.2%–13.0%) | -6.2pt |
Revenue growth lags the industry median by 6.2pt, indicating the company is behind peers in top-line expansion.
※Source: Company compilation
Improving inventory efficiency is key to next-term performance recovery. Extended inventory turnover days of 182 and CCC of 166 are compressing gross margin and burdening working capital; optimizing inventory to improve OCF and SG&A efficiency is a prerequisite for achieving full-year guidance. Proceeds from sales of investment securities have been allocated to capex, and the timing of revenue realization from opening/renovation investments will be a driver of sales and profit recovery in subsequent periods.
The financial base is very healthy, with an Equity Ratio of 74.0%, Debt/EBITDA 0.35x, and Interest Coverage 103.2x, limiting financial risk. The company has capacity to pursue active capex (Capex/Depreciation 3.5x) while maintaining stable dividends (Payout Ratio 53.3%). If SG&A containment and inventory normalization proceed in H2, there is significant room to restore ROE of 6.2%. While progress rates at Q2 are high, full-year plan assumes profit accumulation in H2, so monitoring same-store recovery and the ramp-up effect of new openings is necessary.
This report is an earnings analysis document automatically generated by AI analyzing XBRL earnings flash report data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed financial data. Investment decisions are your responsibility; please consult a professional as necessary before making any investment.