Happiness and D Co Ltd

Happiness and D Co Ltd exhibits a capital structure with a debt-to-equity ratio of 3.33, indicating a significant reliance on debt financing. The company's liquidity position is characterized by a current ratio of 1.77, suggesting it has sufficient short-term assets to cover its short-term liabilities, although the risk assessment indicates a medium liquidity risk. The company's cash and equivalents amount to 1,202,122,000 JPY, which is less than its long-term debt of 4,378,126,000 JPY, resulting in a negative net cash position.

In terms of profitability, the company reported a net loss of 137,923,000 JPY and an operating loss of 119,287,000 JPY, reflecting a challenging financial performance. The return on equity (ROE) is -10.48%, and the return on assets (ROA) is -1.77%, both significantly below the industry median for Apparel & Accessories Retailers, indicating underperformance relative to its peers.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification. This lack of diversification increases the risk associated with market fluctuations in the primary operating region. The company's revenue for the latest period was 2,409,469,000 JPY, with a gross profit of 949,193,000 JPY, but the operating and net losses suggest a need for cost management and revenue growth strategies.

Looking ahead, the company's growth trajectory is uncertain, with no specific guidance provided for the next fiscal year. The recent financial performance, including a net loss and negative ROE, indicates a need for strategic adjustments to improve profitability and operational efficiency. The risk assessment highlights a medium liquidity risk and a low dilution risk, with no immediate pressure for equity issuance.

Recent events, including the latest financial results and analyst estimates, show a continued decline in earnings, with the last actual EPS at -317.59 JPY and revenue at 8,841,450,000 JPY. These figures underscore the company's ongoing financial challenges and the need for a turnaround strategy.

Long-term debt decreased to JPY 3.97 billion in FY2025, indicating a reduction in leverage obligations.

The company faces low dilution risk, suggesting current equity structure remains stable for shareholders.

Gross profit remained positive at JPY 3.59 billion in FY2025, preserving some margin despite revenue declines.

Net losses widened to JPY 808.6 million in FY2025, reflecting deteriorating profitability and operational inefficiencies.

The debt-to-equity ratio stands at 3.33, significantly higher than the cohort median of 0.34.

Operating margin of -4.95% places the company in the bottom quartile of its apparel cohort.

The company carries a high credit risk flag, indicating potential difficulties in meeting financial obligations.

Revenue ¥2.57B, −7,1% YoY; Operating income +595,6% YoY.

• ▍Revenue ¥2.57B, −7,1% YoY
• ▍Operating income +595,6% YoY
• ▍Net income +327,1% YoY
• ▍Net margin 4.5%

Revenue ¥1.82B, −7,3% YoY; Operating income −0,2% YoY.

• ▍Revenue ¥1.82B, −7,3% YoY
• ▍Operating income −0,2% YoY
• ▍Net income +0,4% YoY
• ▍Net margin -8.4%

Revenue ¥2.13B, −10,9% YoY; Operating income −2,5% YoY.

• ▍Revenue ¥2.13B, −10,9% YoY
• ▍Operating income −2,5% YoY
• ▍Net income −24,3% YoY
• ▍Net margin -17.5%

Revenue ¥1.98B, −17,8% YoY; Operating income −66,9% YoY.

• ▍Revenue ¥1.98B, −17,8% YoY
• ▍Operating income −66,9% YoY
• ▍Net income −66,0% YoY
• ▍Net margin -11.6%

Revenue ¥2.77B; Operating income ¥19.9M.

• ▍Revenue ¥2.77B
• ▍Operating income ¥19.9M
• ▍Net margin -1.9%

Revenue ¥1.96B; Operating income -¥142.6M.

• ▍Revenue ¥1.96B
• ▍Operating income -¥142.6M
• ▍Net margin -7.9%

Revenue ¥2.40B; Operating income -¥355.6M.

• ▍Revenue ¥2.40B
• ▍Operating income -¥355.6M
• ▍Net margin -12.6%

Revenue ¥2.41B; Operating income -¥119.3M.

• ▍Revenue ¥2.41B
• ▍Operating income -¥119.3M
• ▍Net margin -5.7%

Revenue ¥8.84B, −18,0% YoY; Operating income −54,7% YoY.

• ▍Revenue ¥8.84B, −18,0% YoY
• ▍Operating income −54,7% YoY
• ▍Net income −76,1% YoY
• ▍Free cash flow −73,7% YoY
• ▍Net margin -9.1%

Revenue ¥10.78B, −15,4% YoY; Operating income −4,1% YoY.

• ▍Revenue ¥10.78B, −15,4% YoY
• ▍Operating income −4,1% YoY
• ▍Net income +31,3% YoY
• ▍Free cash flow +28,2% YoY
• ▍Net margin -4.3%

Revenue ¥12.74B, −6,4% YoY; Operating income −355,0% YoY.

• ▍Revenue ¥12.74B, −6,4% YoY
• ▍Operating income −355,0% YoY
• ▍Net income −843,4% YoY
• ▍Free cash flow −385,2% YoY
• ▍Net margin -5.2%