| Metric | This Period | Prior Year | YoY |
|---|
| Revenue / Net Sales | ¥2181.0B | ¥2108.6B | +3.4% |
| Operating Income / Operating Profit | ¥164.8B | ¥118.9B | +38.6% |
| Ordinary Income | ¥162.7B | ¥132.6B | +22.8% |
| Net Income | ¥29.0B | ¥25.1B | +15.6% |
| ROE | 1.9% | 1.8% | - |
For the fiscal year ended March 2026, Belluna achieved revenue of ¥2,181.0B (YoY +¥72.4B +3.4%), Operating Income of ¥164.8B (YoY +¥45.9B +38.6%), Ordinary Income of ¥162.7B (YoY +¥30.2B +22.8%), and Net Income attributable to owners of parent of ¥29.0B (YoY +¥3.9B +15.6%), recording year-over-year increases in both top and bottom lines. The operating margin improved to 7.6% (from 5.6% prior year, +2.0pt), driven by a substantial expansion in the Property Business (Revenue +38.3%, Operating Income +62.7%) and sustained high profitability in the Database Utilization Business (operating margin 25.1%). Gross margin remained high at 62.9% while SG&A ratio was contained at 55.4%, demonstrating operating leverage. Net income was supported by non-recurring gains of ¥17.9B (including ¥11.6B gain on sales of available-for-sale securities), but net margin lagged at 5.3% relative to the improvement in operating margin, impacted by impairment losses of ¥7.0B and interest expense of ¥14.2B.
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Revenue: Revenue of ¥2,181.0B (+3.4%) reflected notable mix shifts across segments, led by the Property Business (¥497.0B, +38.3%). The Gourmet Business (¥337.4B, +5.2%) and Database Utilization Business (¥179.5B, +4.9%) also performed steadily. In contrast, the Apparel & General Goods Business (¥689.1B, -7.9%) and Cosmetics & Health Foods Business (¥114.4B, -17.4%) recorded declines; the Kimono-related Business (¥225.6B, -1.5%) and Nurse-related Business (¥123.0B, -2.5%) also saw marginal decreases. The Property Business revenue growth was due to execution of real estate leasing, development, and hotel projects; regionally, the structure continues to concentrate over 90% of tangible fixed assets domestically. Revenue in growth areas amounted to ¥1,087.3B (prior year ¥1,000.8B, +8.6%), while revenue in sustainable areas (apparel, general goods, kimono, etc.) was ¥937.4B (prior year ¥1,020.7B, -8.2%), indicating a shift toward higher-margin businesses.
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Profitability: Cost of goods sold was ¥808.8B (37.1% of sales), yielding gross profit of ¥1,372.2B (gross margin 62.9%, +1.6pt from 61.3%). After SG&A of ¥1,207.4B (SG&A ratio 55.4%, -0.3pt), Operating Income was ¥164.8B (operating margin 7.6%). Non-operating income of ¥26.5B (including foreign exchange gains ¥11.7B, investment partnership income ¥4.1B) and non-operating expenses of ¥28.6B (including interest expense ¥14.2B, fees paid ¥9.5B) largely offset, resulting in Ordinary Income of ¥162.7B (ordinary margin 7.5%). After special gains of ¥17.9B (gain on sale of available-for-sale securities ¥11.6B, gain on sale of subsidiary shares ¥5.4B) and special losses of ¥13.9B (impairment losses ¥7.0B, valuation losses on available-for-sale securities ¥1.4B, etc.), profit before income taxes was ¥166.7B. Income taxes were ¥52.0B (effective tax rate 31.2%), minority interests -¥0.7B, leading to Net Income attributable to owners of parent of ¥29.0B. A net special items contribution of +¥4.0B was a temporary factor, but the ordinary-base profit increase (Ordinary +¥30.2B +22.8%) reflects improvement in core operations. In conclusion, the company achieved revenue and profit growth, but Net Income growth (+15.6%) lagged Ordinary Income growth (+22.8%) due to tax burden and special losses.
- Property Business: Revenue ¥497.0B (+38.3%), Operating Income ¥85.5B (+62.7%, margin 17.2%), expanding significantly to become the core business accounting for approximately 52% of consolidated operating income. The business composition includes real estate leasing, development, hotels, solar power, golf courses, etc. Increases in tangible fixed assets (construction in progress +¥602.2B, land +¥799.6B) indicate aggressive investment in assets for future operations.
- Database Utilization Business: Revenue ¥179.5B (+4.9%), Operating Income ¥45.1B (-12.5%, margin 25.1%). The segment offers BPO, mail-order agency, member finance, and 3PL logistics. Although it remains the most profitable segment by margin, year-on-year profit decline suggests shifts in revenue structure.
- Gourmet Business: Revenue ¥337.4B (+5.2%), Operating Income ¥13.2B (+5.1%, margin 3.9%) — stable growth.
- Nurse-related Business: Revenue ¥123.0B (-2.5%), Operating Income ¥6.5B (+60.7%, margin 5.3%) — substantial improvement in profitability.
- Kimono-related Business: Revenue ¥225.6B (-1.5%), Operating Income ¥13.8B (+10.0%, margin 6.1%) — efficiencies in store and rental operations contributed.
- Cosmetics & Health Foods Business: Revenue ¥114.4B (-17.4%), Operating Income ¥7.3B (+2.2%, margin 6.4%) — double-digit revenue decline but margin improvement.
- Apparel & General Goods Business: Revenue ¥689.1B (-7.9%), Operating Income ¥-4.1B (improvement from prior year -¥17.0B, red ink reduced by 75.9%) — store consolidation effects from catalog and online sales emerged, but the segment remains loss-making; early return to profitability remains a challenge.
- Profitability: Operating margin 7.6% (up +2.0pt from 5.6%), Ordinary margin 7.5% (up +1.2pt from 6.3%), Net margin 1.3% (up +0.1pt from 1.2%). ROE 1.9% (prior year 1.8%), Ordinary ROA 5.0% (prior year 4.3%) — both improved year-over-year, but ROE remains well below the company average of 4.0%, significantly affected by Net Income volatility from special items. ROE based on Net Income attributable to owners of parent (¥29.0B ÷ ¥1,513.4B) is approximately 1.9%, while ROE based on Comprehensive Income of ¥127.8B is about 8.5%, reflecting mark-to-market gains on equity holdings. The combination of gross margin 62.9% and operating margin 7.6% is largely driven by contributions from high-margin segments (Property 17.2%, Database Utilization 25.1%).
- Cash Quality: Operating Cash Flow (OCF) was ¥184.7B, 6.4x Net Income ¥29.0B and 1.1x Operating Income ¥164.8B, and OCF/Sales ratio was 8.5%, indicating strong cash generation. Depreciation was ¥73.0B; working capital improvement (inventory decrease +¥20.5B, accounts payable decrease -¥23.2B, accounts receivable increase -¥6.0B, broadly balanced) contributed. The accrual ratio (Net Income - OCF) ÷ Total Assets = △4.6% (negative), indicating cash generation exceeded profit and high cash quality. Free Cash Flow (FCF) was -¥138.2B (OCF ¥184.7B - Investing CF ¥322.9B), reflecting an investment-first phase with capital expenditures of ¥333.1B amounting to 4.6x depreciation.
- Investment Efficiency: Total asset turnover 0.64x (down from 0.67x), and ROIC (Operating Income × (1 - tax rate 30%) ÷ (Equity + Interest-bearing debt)) ≒ 4.7%, indicating gradual capital recovery. Tangible fixed assets are ¥1,728.4B (50.8% of total assets), making the company asset intensive and limiting turnover. Inventory turnover days (inventory ¥235.6B ÷ (COGS ¥808.8B ÷ 365)) ≒ 106 days — long for retail/mail-order — indicating room to improve inventory management.
- Financial Soundness: Equity ratio 44.5% (down -0.7pt from 45.2%), current ratio 246.5% (up +33.2pt from 213.3%), quick ratio 202.3% (up +30.7pt from 171.6%) — short-term liquidity is robust. Interest-bearing debt (short-term borrowings ¥186.6B + long-term borrowings ¥1,271.8B + lease obligations etc.) totals approximately ¥1,462B; Net assets ¥1,514.5B, giving Debt/Equity approx. 0.97x. Debt/EBITDA (interest-bearing debt ÷ (Operating Income + Depreciation)) ≒ 6.1x — indicating high leverage. Interest coverage (Operating Income ¥164.8B ÷ interest expense ¥14.2B) is 11.6x, showing resilience to interest payments, but long-term borrowings increased by ¥243.3B (+23.7% from prior year ¥1,028.5B) to fund investments. Debt/Capital ratio (interest-bearing debt ÷ (interest-bearing debt + equity)) is 49.1%, high.
- Operating CF: ¥184.7B (prior year ¥96.9B, +90.6%), improved significantly. This was driven by profit before tax ¥166.7B plus non-cash expenses such as depreciation ¥73.0B and goodwill amortization ¥4.1B; working capital was roughly neutral (inventory decrease +¥20.5B, accounts receivable increase -¥6.0B, accounts payable decrease -¥23.2B); income taxes paid -¥49.6B were deducted.
- Investing CF: -¥322.9B (prior year -¥177.9B), dominated by capital expenditure -¥333.1B (mainly tangible fixed asset acquisitions), reflecting substantial investment in land, buildings, and construction in progress for the Property Business. Proceeds from sale of available-for-sale securities +¥27.6B and sale of subsidiary shares +¥6.4B partially offset outflows, but net was a large cash outflow.
- Financing CF: +¥139.1B (prior year +¥67.2B), with long-term borrowings procured +¥501.5B, repayments -¥339.3B, net long-term debt procurement +¥162.2B. Other items included short-term borrowings movement +¥10.4B, dividends paid -¥28.4B, lease liabilities repayment -¥5.2B, resulting in net inflow.
- Free Cash Flow: -¥138.2B as Investing CF of -¥322.9B exceeded OCF of ¥184.7B, reflecting an active investment phase. Cash and Cash Equivalents increased slightly from ¥361.3B at the beginning of the period to ¥365.6B at period-end (+¥3.5B), including foreign exchange impact +¥2.6B, indicating that financing was used to fund investments.
- Recurrence of earnings: Core Operating Income ¥164.8B forms the base, and the operating margin of 7.6% improved by +2.0pt year-over-year due to expansion of high-margin segments (Property 17.2%, Database Utilization 25.1%). Non-operating income ¥26.5B (1.2% of sales) comprised foreign exchange gains ¥11.7B, investment partnership income ¥4.1B, dividend income ¥4.5B, etc., while non-operating expenses ¥28.6B (interest expense ¥14.2B, fees paid ¥9.5B, etc.) roughly offset, leaving non-operating impact neutral. Net special items (special gains ¥17.9B vs. special losses ¥13.9B) produced a temporary net +¥4.0B; Ordinary Income ¥162.7B indicates sustainable earning power.
- Cash vs. Earnings: OCF at 6.4x Net Income supports high cash quality, but OCF/EBITDA (¥184.7B ÷ (¥164.8B + ¥73.0B)) is about 0.78x, somewhat low — influenced by timing of working capital and tax payments and long-term prepaid expenses. Comprehensive Income ¥127.8B far exceeded Net Income ¥29.0B, supported by other comprehensive income items such as valuation gains on securities +¥12.6B and foreign currency translation adjustments +¥3.0B, indicating mark-to-market gains on holdings complementing earnings. The accrual ratio (Net Income - OCF) ÷ Total Assets = △4.6% (negative) again suggests cash generation exceeded accounting profits, supporting high earnings quality.
- Full-year guidance (Revenue ¥2,210.0B, Operating Income ¥175.0B, Ordinary Income ¥165.0B, Net Income attributable to owners of parent ¥120.0B) vs. actual results: Revenue ¥2,181.0B (progress 98.7%), Operating Income ¥164.8B (94.2%), Ordinary Income ¥162.7B (98.6%), Net Income ¥29.0B (24.2%). Revenue and Ordinary Income were generally on track, but Operating Income missed by about -¥10.2B (approx. -5.8%) and Net Income missed by -¥91.0B (approx. -75.8%). The large shortfall in Net Income relative to the full-year forecast (forecast EPS ¥124.69 vs. actual ¥119.94, ≒ -3.8%) may reflect deviations in assumed special items (e.g., impairment losses ¥7.0B) and changes in tax burden. Year-on-year, Revenue +3.4%, Operating Income +38.6%, Ordinary Income +22.8%, Net Income +15.6% — all increased YoY, but relative to guidance, operating and final results were under target, with Database Utilization profit decline (-12.5%) and continued Apparel losses weighing on results. On the dividend front, actual dividend ¥38.00 (interim ¥15.00 + year-end ¥23.00) exceeded the forecast ¥19.50, with payout ratio at 31.8%, within an appropriate range.
- Annual dividend was ¥38.00 (interim ¥15.00 + year-end ¥23.00; prior year ¥14.50, +¥23.50 +162%), with payout ratio 31.8% (based on Net Income attributable to owners of parent ¥29.0B and total dividends ¥27.9B), at a reasonable level. The actual dividend significantly exceeded the full-year forecast ¥19.50, reflecting a decision to raise dividends based on mid-term performance and cash position. However, Free Cash Flow was -¥138.2B, so dividend payments of ¥27.9B were not fully covered by internal funds and were supplemented by debt financing +¥162.2B and existing cash. There were no share buybacks; total shareholder return ratio = payout ratio 31.8%. Shares outstanding: 97,244 thousand shares (treasury shares 1,002 thousand shares excluded, net 96,242 thousand shares), average shares during period 96,237 thousand shares, BPS ¥1,572.51. Dividend yield (¥38.00 ÷ share price) depends on share price, but historical trends show a dividend increase trend. Dividend sustainability is acceptable assuming stable OCF ¥184.7B, but prolonged high investment cadence (capex ¥333.1B) makes dividend sustainability dependent on financing environment and progress in monetizing Property projects.
- Leverage Risk: Debt/EBITDA 6.1x; interest-bearing debt approx. ¥1,462B (mainly long-term borrowings ¥1,271.8B) implies high leverage. In a rising interest rate environment, interest payments (¥14.2B this period) could increase and press on Ordinary Income. Although interest coverage is 11.6x, if operating margins decline or project delays occur reducing profits, financial costs would become relatively heavier. Aggressive investment in the Property Business (capex ¥333.1B, 4.6x depreciation) increases borrowing dependence, posing risks of becoming insolvent if asset values fall and of deterioration in refinancing terms.
- Inventory Risk: Inventory ¥235.6B (6.9% of total assets), inventory turnover days 106 days — long for retail/mail-order — raising the risk of loss-making inventory in Apparel & General Goods (loss ¥-4.1B) and inventory build-up in Cosmetics & Health Foods (Revenue -17.4%). Inventory valuation losses or markdowns could push up SG&A. There is also risk of price declines in property held for sale (¥88.4B). Delays in improving inventory turnover would worsen working capital and pressure cash flows.
- Segment Concentration Risk: The Property Business accounts for about 52% of operating income and is thus sensitive to real estate market conditions, interest rates, and tenant trends. The Database Utilization Business, accounting for about 27% of operating income, posted a -12.5% YoY profit decline, indicating potential volatility from utilization rates and pricing. Ongoing losses in Apparel & General Goods could continue to drag on consolidated margins if profitability recovery is delayed. The sharp revenue decline in Cosmetics & Health Foods (-17.4%) suggests structural customer loss and competitive pressure. Segment concentration increases earnings volatility risk.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|
| Operating Margin | 7.6% | 4.6% (1.7%–8.2%) | +3.0pt |
| Net Margin | 1.3% | 3.3% (0.9%–5.8%) | -2.0pt |
Operating margin exceeds the industry median by +3.0pt, ranking the company favorably due to contributions from high-margin segments (Property 17.2%, Database Utilization 25.1%). However, net margin trails the median by -2.0pt, diluted by special items, tax burden, and interest expense.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|
| Revenue Growth (YoY) | 3.4% | 4.3% (2.2%–13.0%) | -0.9pt |
Revenue growth is slightly below the industry median, with declines in apparel and cosmetics/health foods constraining overall growth. Property’s high growth (+38.3%) partly offsets this, but overall pace is moderate within the industry.
※ Source: Company aggregation
- Monitor Property-led profit expansion vs. Database Utilization profitability decline: The Property Business accounted for approximately 52% of Operating Income, with YoY Operating Income growth +62.7% contributing +2.0pt to consolidated operating margin. Large increases in tangible fixed assets (construction in progress +¥602.2B, land +¥799.6B) suggest future project ramp-up and mid-term revenue expansion potential. Conversely, Database Utilization maintains the highest margin at 25.1% but reported a YoY Operating Income decline of -12.5%, implying issues around BPO/3PL utilization or pricing. Future drivers will be the schedule and utilization rates of Property projects and the pace of recovery in Database Utilization.
- Coexistence of negative Free Cash Flow and high leverage: While OCF ¥184.7B is healthy, capex ¥333.1B (4.6x depreciation) resulted in FCF -¥138.2B funded by net long-term borrowings +¥162.2B, producing high leverage (Debt/EBITDA 6.1x). Interest coverage remains 11.6x, but if rates rise or project delays slow CF generation, balancing dividends (¥27.9B) and debt repayment could become difficult. Improvement in FCF is contingent on investment peak-out and Property project cash contribution — progress should be closely watched.
- Inventory management and Apparel profitability: Inventory turnover days 106 days remain long; although Apparel & General Goods losses narrowed (from -¥17.0B to -¥4.1B), the segment is still loss-making. Cosmetics & Health Foods suffered significant revenue decline (-17.4%), indicating structural issues. Risks include inventory valuation losses and markdowns increasing SG&A. Improving inventory turnover (target 80–90 days) and achieving early profitability in Apparel are key to mid-term margin improvement. ROE is low at 1.9%, but Comprehensive Income ¥127.8B (ROE approx. 8.5%) reflects expanded unrealized gains on held securities, indicating substantial room for asset-efficiency improvements.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmark figures are reference information compiled by the Company based on publicly available financial statements. Investment decisions are your responsibility; please consult a professional advisor as necessary before making investment decisions.
