Breaking Down create restaurants holdings inc. Financial Health: Key Insights for Investors

Dig into Create Restaurants Holdings Inc. (3387.T) with a close look at FY2025 performance that saw revenue rise to JPY 156.4 billion (up 7.3% year‑on‑year) and same‑store sales surging to 106%, Q1 revenue growth of 9.2%, and management guiding FY2026 revenue to JPY 165 billion (a 5.5% increase); profitability showed operating profit of JPY 8.5 billion (up JPY 1.4 billion), adjusted EBITDA of JPY 26.1 billion, an operating margin of 7.65%, ROE of 14.94% TTM and EPS of JPY 26.62, while the balance sheet reports equity attributable to owners of JPY 40.2 billion against total assets of JPY 137.2 billion with an equity ratio near 29% (adjusted ~43%) and a debt‑to‑equity ratio at 153.90% as of July 5, 2025; liquidity and cash generation include a current ratio of 0.68, operating cash flow TTM of JPY 25.99 billion, levered free cash flow TTM of JPY 20.78 billion, cash per share JPY 102.05 and a trailing dividend payout ratio of 30.11% (trailing annual dividend JPY 8.00, year‑end JPY 4.00), while market value and valuation metrics sit at a market cap of JPY 298.18 billion, trailing P/E 53.23, forward P/E 37.29, P/S 1.91, P/B 7.42 and EV/EBITDA 13.57 - set against risks like inflation, intense competition, integration and supply‑chain pressures and upside from a plan to double international revenue to 30% within five years, a JPY 50 billion M&A war chest, 37 new restaurants planned for FY2026 and digital shareholder benefits rolling out from May 2025.

create restaurants holdings inc. (3387.T) Revenue Analysis

create restaurants holdings inc. reported robust top-line expansion in FY 2025 driven by both organic same-store momentum and strategic consolidation. Key headline figures:

• Fiscal Year 2025 Revenue: JPY 156.4 billion (up 7.3% y/y)
• Q1 2025 Revenue Growth: +9.2% year-over-year
• Revenue Forecast FY 2026: JPY 165.0 billion (projected +5.5% y/y)
• Same-Store Sales Growth FY 2025: +106% (indicating strong organic recovery/expansion)
• International Revenue Contribution FY 2025: ~15% of total revenue
• M&A Impact: Consolidation of newly acquired brands materially contributed to revenue expansion

The following table summarizes recent and projected revenue performance and composition:

Primary drivers behind FY 2025 revenue trends:

• Same-store sales surge: a 106% increase reflecting strong customer traffic recovery and pricing/upselling success.
• M&A consolidation: newly-acquired brands added meaningful incremental revenue and cross-selling opportunities.
• Geographic diversification: international operations composed roughly 15% of revenue, reducing domestic concentration risk.
• Seasonality and promotions: targeted campaigns and menu innovation contributed to Q1's 9.2% YoY growth.

Investor-focused implications:

• Growth sustainability hinges on converting the exceptionally high same-store gain into repeatable margin-accretive sales rather than one-time effects.
• M&A execution will be critical - integration costs and overlap could affect near-term profitability despite top-line gains.
• International expansion (currently ~15% of revenue) offers upside diversification but requires operational execution and FX monitoring.

For additional context on ownership and investor activity related to create restaurants holdings inc., see: Exploring create restaurants holdings inc. Investor Profile: Who's Buying and Why?

create restaurants holdings inc. (3387.T) Profitability Metrics

The fiscal results for the year ending February 2025 show strengthening profitability across multiple measures for create restaurants holdings inc. (3387.T). Key high-level figures illustrate operational improvement and solid returns to shareholders.

• Operating Profit (FY2025): JPY 8.5 billion - increase of JPY 1.4 billion year-over-year
• Adjusted EBITDA (FY2025): JPY 26.1 billion
• Operating Margin (FY2025): 7.65%
• Profit Margin (FY2025): 3.57%
• Return on Equity (TTM): 14.94%
• Earnings Per Share (EPS, TTM): JPY 26.62

These metrics collectively indicate improved core earnings power (Adjusted EBITDA and Operating Profit), healthy operational efficiency (Operating Margin) and effective capital use (ROE). EPS and Profit Margin reflect the bottom-line translation of those operating gains.

For context on corporate strategy, ownership and historical performance that underpin these profitability outcomes, see: create restaurants holdings inc.: History, Ownership, Mission, How It Works & Makes Money

create restaurants holdings inc. (3387.T) - Debt vs. Equity Structure

Key balance-sheet snapshots for FY ending February 2025 and related metrics (dates as specified):

• Equity represents roughly JPY 40.2b of the JPY 137.2b asset base, producing an equity ratio near 29% (40.2 / 137.2 ≈ 0.293).
• The adjusted equity ratio (~43%) indicates a materially stronger capital buffer when certain adjustments (non‑operating items, revaluations or intangible reductions) are applied.
• Debt-to-equity at 153.90% implies total debt roughly 1.54 × equity; with equity JPY 40.2b, this suggests implied gross debt on the order of JPY 61.9b (approximate).

How the company uses leverage and implications for investors:

• Debt financing is explicitly used for M&A activity and capital expenditures - strategies that can accelerate growth but increase leverage risk.
• Higher leverage magnifies returns on successful acquisitions but raises vulnerability to revenue volatility and interest rate changes.
• The adjusted equity ratio (~43%) provides comfort that, after adjustments, the balance sheet is meaningfully stronger than the headline equity ratio alone.

Simple financial ratios (illustrative based on provided figures):

For additional context on the company's history, ownership and business model: create restaurants holdings inc.: History, Ownership, Mission, How It Works & Makes Money

create restaurants holdings inc. (3387.T) - Liquidity and Solvency

• Current Ratio (Jul 5, 2025): 0.68 - below 1.0, indicating short-term liquidity pressure.
• Operating Cash Flow TTM: JPY 25.99 billion - robust cash generation from operations.
• Levered Free Cash Flow TTM: JPY 20.78 billion - substantial post-financing free cash available.
• Cash per Share (Jul 5, 2025): JPY 102.05 - liquid buffer attributable per share.
• Dividend Payout Ratio: 30.11% (trailing annual dividend JPY 8.00) - conservative payout relative to earnings/cash flow.
• Year-End Dividend for FY2025: increased to JPY 4.00 per share - shows management's willingness to return capital.

create restaurants holdings inc. (3387.T) Valuation Analysis

Key valuation metrics for create restaurants holdings inc. (3387.T) give a snapshot of how the market is pricing the company relative to earnings, sales, book value and cash-flow proxies as of July 1, 2025.

• Market Capitalization: JPY 298.18 billion
• Trailing P/E Ratio: 53.23 - indicates current price is 53.23 times last 12 months' earnings.
• Forward P/E Ratio: 37.29 - reflects expected earnings over the next 12 months priced by the market.
• Price-to-Sales Ratio: 1.91 - price per share relative to revenue per share.
• Price-to-Book Ratio: 7.42 - market value relative to accounting equity.
• Enterprise Value-to-EBITDA: 13.57 - valuation including debt and cash relative to operating cash proxy.

For additional context on the company's background and operational drivers that underpin these valuation multiples, see: create restaurants holdings inc.: History, Ownership, Mission, How It Works & Makes Money

create restaurants holdings inc. (3387.T) - Risk Factors

• Inflation Impact: Rising costs affecting raw materials and labor

• Competitive Landscape: Intense competition in the restaurant industry

• Operational Risks: Integration challenges from recent acquisitions

• Day 30-90 SSS performance vs. legacy stores
• Cost-to-serve convergence (target reduction 5%-10% over 12-24 months)
• CapEx for remodeling or rebranding (typical per-unit investment: ¥2-8 million)

• Market Volatility: Economic fluctuations impacting consumer spending

• Regulatory Changes: Potential impacts from new food safety regulations

• Supply Chain Disruptions: Risks related to global supply chain issues

create restaurants holdings inc. (3387.T) Growth Opportunities

create restaurants holdings inc. is positioning for multi‑vector growth - expanding overseas, accelerating store openings, pursuing M&A, lifting same‑store sales, digitizing customer/shareholder touchpoints and tightening cost management. The targets below are explicit and measurable, giving investors clear milestones to track execution risk and upside.

• International Expansion: goal to double overseas revenue share from ~15% to 30% within five years (target date: FY2030), implying the overseas mix must grow at an effective pace to reach 30% of consolidated revenue.
• M&A Strategy: allocation of JPY 50.0 billion over five years (approx. FY2026-FY2030), targeting roughly two acquisitions per year to accelerate market entry and scale.
• New Restaurant Openings: 37 new restaurants planned for FY2026 to drive footprint and incremental sales.
• Same‑Store Sales Growth: target SSS index of 102.8% vs prior year (i.e., +2.8% year‑on‑year), reflecting modest traffic and/or average check improvement expectations.
• Digital Transformation: roll‑out of digital shareholder benefit coupons starting May 2025 to improve engagement, reduce paper costs and better track redemption analytics.
• Cost Management & Cash Allocation: emphasis on cost‑conscious management and disciplined deployment of cash (capex, M&A, liquidity buffer).

Where these levers intersect determines upside and execution risk: accelerating overseas growth to 30% will likely require a mix of organic openings (part of the 37 FY2026 sites) plus acquisitive moves funded from the JPY 50 billion program. Achieving a 102.8% SSS index while scaling new stores and integrating M&A targets will hinge on tight cost controls and effective digital engagement (e.g., the May 2025 digital coupon roll‑out) to convert marketing into repeat sales.

• Key investor checkpoints to monitor:
  • Quarterly disclosure of overseas revenue mix (progress toward 30%).
  • Announced M&A deals (timing, size, and price from the JPY 50 bn pool).
  • Pacing and location mix of the 37 FY2026 openings and associated unit economics.
  • Monthly/quarterly SSS figures to validate the 102.8% target trajectory.
  • Implementation status and redemption metrics for digital shareholder coupons (post‑May 2025).
  • Capex and cash flow statements evidencing disciplined cash allocation.

For context on the company's broader background, ownership and how it creates value, see: create restaurants holdings inc.: History, Ownership, Mission, How It Works & Makes Money