Delsole Corporation (2876) AI Stock Analysis

• Market Cap: ¥4.47B
• Dividend Yield: 3.37%
• Average Volume (3M): 3.93K
• Price to Earnings (P/E): 3.9
• Beta (1Y): 0.27
• Revenue Growth: -15.71%
• EPS Growth: -293.44%
• Country: JP
• Employees: 302
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 28.57
• Shares Outstanding: 9,105,290
• 10 Day Avg. Volume: 1,420
• 30 Day Avg. Volume: 3,933
• PEG Ratio: 0.05
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.25
• P/FCF Ratio: 7.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 51 Neutral
• Price Target: ¥493.00 ▲(9.80% Upside)
• Action: Reiterated Date: 10/24/25
• Date: Action: Reiterated 10/24/25

Delsole Corporation's overall stock score is primarily impacted by its weak financial performance, characterized by declining revenues and negative profitability. Technical analysis indicates a lack of upward momentum, while the valuation reflects poor earnings but offers a decent dividend yield. The absence of earnings call data and corporate events limits additional insights.

Positive Factors

Low leverage / strong equity base

Extremely low leverage and a ~60% equity ratio provide lasting financial flexibility. This capital structure reduces solvency risk, supports investment or restructuring options during revenue stress, and preserves borrowing capacity for strategic moves over months.

Healthy gross margin

A near-37% gross margin indicates structural product-level profitability in packaged foods. Sustained gross margins provide buffer to absorb input cost swings, underpin potential margin recovery if SG&A is optimized, and support long-term competitiveness in category pricing.

Positive operating cash flow and cash conversion

Positive operating cash flow and a 2.14 OCF/net income conversion show earnings generate real cash. This durable cash-generation ability funds working capital and distributions, and provides a runway for turnaround actions despite shortfalls in reported net income.

Negative Factors

Declining revenues

Material year-over-year revenue decline signals weakening demand or lost share in core packaged foods markets. Persistent top-line contraction undermines scale economics, pressures per-unit fixed costs, and makes sustainable margin recovery and reinvestment more difficult over the medium term.

Negative profitability metrics

Negative net and EBITDA margins point to structural earnings shortfalls beyond one-off items. Ongoing losses erode retained earnings, constrain reinvestment and strategic initiatives, and require sustained operational fixes to restore profitability and protect equity value over time.

Weak free cash flow generation

Negative free cash flow growth indicates the company struggles to convert operations into surplus cash after capex. Over months this limits capacity to fund growth, dividends, or debt reduction, raising dependence on external financing if turnaround measures need investment.

Delsole Corporation Business Overview & Revenue Model

Company Description

Delsole Corporation engages in the food service business in Japan and internationally. It operates through Food Manufacturing, Trading, Food Service, and International divisions. The company offers pizza crust and dough products; bread products, including naan, focaccia, tortilla, pita, and biscuits; shredded cheese; and cheese fry and naan dog snack products to supermarket chains and various food service companies. It also trades in pizza and basil sauces, and curries; olives and jalapenos; meat and chicken products comprising pepperoni, Italian sausages, taco meat, chicken sticks, chicken drops, and spicy chicken drops. In addition, the company operates restaurants and department store food counters, as well as provides take out and home delivery services. Delsole Corporation distributes its products under the Del Sole label. The company was formerly known as JC Comsa Corporation. Delsole Corporation was incorporated in 1964 and is headquartered in Tokyo, Japan.

Delsole Corporation Financial Statement Overview

Summary

Delsole Corporation faces significant challenges with declining revenues and profitability, as evidenced by negative net income and margins. Despite a strong equity position and low leverage, the company struggles with cash flow generation, impacting its financial flexibility. The company needs to address operational inefficiencies to improve profitability and cash flow.

Income Statement

The company has experienced a decline in total revenue over the past year, with a significant drop from 17.78 billion to 15.40 billion. Gross profit margin stands at 36.98%, which is relatively strong, but the net profit margin is negative at -2.75%, indicating a loss. EBIT margin is 3.64%, showing operational challenges. The EBITDA margin is negative, suggesting issues with core earnings before depreciation and amortization.

Balance Sheet

The balance sheet reflects a solid equity position with a debt-to-equity ratio of 0.02, indicating low leverage. The equity ratio is 59.74%, showing a strong equity base relative to total assets. However, the return on equity is negative at -6.91%, highlighting profitability concerns despite the strong equity position.

Cash Flow

Operating cash flow is positive, but there is a decline compared to the previous year. The free cash flow growth rate is negative, indicating challenges in generating cash after capital expenditures. The operating cash flow to net income ratio is 2.14, suggesting good cash conversion, but the free cash flow to net income ratio is negative, reflecting cash flow issues.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	15.40B	17.78B	16.89B	15.46B	16.63B
Gross Profit	5.65B	6.78B	6.13B	6.07B	6.04B
EBITDA	918.07M	1.60B	867.37M	1.02B	932.75M
Net Income	-422.80M	599.45M	302.97M	641.69M	251.36M
Balance Sheet
Total Assets	10.33B	10.79B	11.06B	10.67B	10.70B
Cash, Cash Equivalents and Short-Term Investments	2.74B	2.26B	1.65B	1.60B	974.39M
Total Debt	150.00M	210.00M	470.00M	550.00M	1.13B
Total Liabilities	4.21B	4.15B	4.98B	4.70B	5.28B
Stockholders Equity	6.12B	6.63B	6.08B	5.97B	5.42B
Cash Flow
Free Cash Flow	536.74M	813.96M	283.92M	1.26B	-86.33M
Operating Cash Flow	903.43M	1.11B	395.52M	1.64B	284.90M
Investing Cash Flow	-254.72M	-152.37M	-67.12M	-343.70M	-382.74M
Financing Cash Flow	-168.46M	-346.60M	-276.67M	-671.07M	-317.82M

Delsole Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 449.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2876, the sentiment is Positive. The current price of 449 is below the 20-day moving average (MA) of 484.45, below the 50-day MA of 467.98, and above the 200-day MA of 439.93, indicating a bullish trend. The MACD of 6.61 indicates Negative momentum. The RSI at 56.56 is Neutral, neither overbought nor oversold. The STOCH value of 81.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2876.

Delsole Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3392	78 Outperform	¥15.95B	12.33	―	1.43%	10.77%	131.68%
2911	68 Neutral	¥4.31B	6.34	―	1.55%	-1.00%	31.15%
2894	66 Neutral	¥6.28B	12.62	―	1.22%	1.52%	28.70%
2877	64 Neutral	¥9.18B	11.21	―	1.63%	3.50%	72.85%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
2215	53 Neutral	¥4.20B	4.91	―	―	2.99%	-87.21%
2876	51 Neutral	¥4.47B	3.93	―	3.37%	-15.71%	-293.44%