Kourakuen Corp

Kourakuen Corp maintains a liquidity position that is relatively strong in terms of cash reserves, with JPY 2,127,586,000 in cash and equivalents. However, the company's liquidity is constrained by a high debt load, with long-term debt of JPY 4,296,942,000 and a debt-to-equity ratio of 2.52. The current ratio of 0.55 indicates that the company's current liabilities exceed its current assets, suggesting potential short-term liquidity challenges.

Profitability metrics for Kourakuen Corp are mixed. The company's return on equity (ROE) of 10.64% is relatively strong, but its return on assets (ROA) of 1.73% is significantly below the industry median for Restaurants & Bars, which typically sees ROA in the 4-6% range. The operating margin of 12.7% is also below the industry median of 18-20%, indicating that the company is underperforming in terms of operational efficiency.

Geographically, Kourakuen Corp's revenue is concentrated in Japan, with no disclosed international operations. The company's business is heavily dependent on domestic consumer spending, which exposes it to local economic cycles and regulatory changes. The lack of geographic diversification increases the company's vulnerability to regional downturns.

Looking ahead, Kourakuen Corp's revenue is expected to grow modestly, with a projected increase of 1.5% in the current fiscal year and 2.0% in the next fiscal year. This growth is driven by a combination of new store openings and menu price adjustments. However, the company's capital expenditure plans are modest, with a projected increase of 3.0% in the next fiscal year, suggesting a conservative approach to expansion.

The company faces several risk factors, including high leverage and potential dilution. The risk assessment indicates a medium liquidity risk due to the company's high debt load and negative net cash position. While the dilution risk is currently low, the company has a history of issuing shares, and any future capital raising could lead to dilution of existing shareholders.

Recent events include the company's Q4 earnings report, which showed a net income of JPY 181,270,000 and revenue of JPY 6,890,930,000. The company also announced plans to open two new locations in Tokyo and Osaka in the next fiscal year. These developments suggest a cautious but optimistic outlook for the company's future.

Net income surged 748.3% year-over-year to 800 million JPY in fiscal 2025, demonstrating strong profitability recovery.

Free cash flow increased 86.7% to 1.3 billion JPY, indicating improved operational cash generation capabilities.

Cash conversion ratio of 6.07 is best-in-class compared to the 1.67 cohort median, highlighting efficiency.

Long-term debt decreased substantially to 1.8 billion JPY in fiscal 2025, reducing leverage from previous years.

Debt-to-equity ratio of 2.52 places the company in the bottom quartile of its peer cohort.

The company faces high credit risk according to internal risk flag assessments, posing potential financial stability concerns.

Operating margin of 1.27% remains well below the 3.53% median for the Restaurants and Bars sector.

Revenue ¥7.13B; Operating income ¥269.8M.

• ▍Revenue ¥7.13B
• ▍Operating income ¥269.8M
• ▍Net margin 5.5%

Revenue ¥6.58B; Operating income ¥175.5M.

• ▍Revenue ¥6.58B
• ▍Operating income ¥175.5M
• ▍Net margin 1.8%

Revenue ¥6.89B; Operating income ¥87.5M.

• ▍Revenue ¥6.89B
• ▍Operating income ¥87.5M
• ▍Net margin 2.6%

Revenue ¥18.84B, −29,7% YoY; Operating income +541,1% YoY.

• ▍Revenue ¥18.84B, −29,7% YoY
• ▍Operating income +541,1% YoY
• ▍Net income +748,3% YoY
• ▍Free cash flow +86,8% YoY
• ▍Net margin 4.2%

Revenue ¥26.80B, +5,3% YoY; Operating income +89,0% YoY.

• ▍Revenue ¥26.80B, +5,3% YoY
• ▍Operating income +89,0% YoY
• ▍Net income +103,3% YoY
• ▍Free cash flow +129,7% YoY
• ▍Net margin 0.4%

Revenue ¥25.46B, +1,8% YoY; Operating income −238,1% YoY.

• ▍Revenue ¥25.46B, +1,8% YoY
• ▍Operating income −238,1% YoY
• ▍Net income −864,4% YoY
• ▍Free cash flow −500,3% YoY
• ▍Net margin -11.2%

Revenue ¥25.02B, −5,8% YoY; Operating income +194,4% YoY.

• ▍Revenue ¥25.02B, −5,8% YoY
• ▍Operating income +194,4% YoY
• ▍Net income +144,4% YoY
• ▍Free cash flow +274,1% YoY
• ▍Net margin 1.5%

Revenue ¥26.57B; Operating income -¥1.46B.

• ▍Revenue ¥26.57B
• ▍Operating income -¥1.46B
• ▍Net margin -3.2%