Delsole Corporation (2876) AI Stock Analysis

• Market Cap: ¥4.22B
• Dividend Yield: 3.37%
• Average Volume (3M): 3.93K
• Price to Earnings (P/E): 3.9
• Beta (1Y): 0.31
• 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: ¥475.00 ▲(5.79% 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

A very low debt-to-equity ratio and high equity ratio provide durable financial flexibility. This reduces refinancing and default risk, supports capital spending or restructuring without heavy interest burdens, and allows the company to absorb shocks while pursuing strategic initiatives.

Positive operating cash flow and strong cash conversion

Positive operating cash flow and a cash conversion ratio above 2x indicate underlying earnings quality and capacity to fund working capital and operations from internal cash. Even with profit headwinds, solid cash conversion supports continued operations and potential dividend or reinvestment capacity.

Relatively strong gross profit margin

A near-37% gross margin shows the business retains healthy spread above direct costs, providing structural room to absorb SG&A and support margin recovery. This cost structure advantage can underpin long-term profitability if top-line pressures are addressed.

Negative Factors

Declining revenue trend

A multi-billion yen revenue decline reflects weakening demand or market share loss in packaged foods. Persistent top-line contraction erodes operating leverage, strains the ability to cover fixed costs, limits scale benefits, and reduces internal funds for growth or restructuring.

Negative profitability and weak return on equity

Negative net margins and ROE indicate current operations are destroying shareholder value. Sustained unprofitability weakens retained earnings, undermines investor returns, and forces management to choose between costly external financing or aggressive cost and portfolio actions to restore profitability.

Declining free cash flow and weak FCF conversion

Negative FCF growth and poor FCF-to-net-income conversion constrain the firm's ability to fund capex, pay dividends, or reduce costs without external financing. Over months, this limits strategic flexibility and makes the company vulnerable if revenue or margins fail to recover.

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.

How the Company Makes Money

Delsole Corporation generates revenue through multiple key channels. The primary revenue stream comes from the sale of its consumer products, which are marketed under several brand names in both brick-and-mortar stores and online platforms. The company also benefits from strategic partnerships with major retail chains, allowing for broader distribution and enhanced visibility of its products. Additionally, Delsole invests in research and development to create innovative solutions that meet changing consumer demands, thus driving sales growth. Seasonal promotions and marketing campaigns further contribute to revenue by attracting new customers and increasing brand loyalty among existing consumers.

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	5.70B	6.78B	6.21B	6.17B	6.11B
EBITDA	-241.94M	1.32B	767.47M	1.48B	855.37M
Net Income	-422.80M	599.45M	302.97M	641.69M	251.36M
Balance Sheet
Total Assets	10.24B	10.74B	11.03B	10.63B	10.66B
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	4.12B	4.11B	4.95B	4.66B	5.24B
Stockholders Equity	6.12B	6.63B	6.08B	5.97B	5.42B
Cash Flow
Free Cash Flow	536.74M	797.12M	283.92M	1.26B	-91.14M
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: Neutral
• Last Price: 449.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2876, the sentiment is Neutral. The current price of 449 is below the 20-day moving average (MA) of 476.05, below the 50-day MA of 459.32, and above the 200-day MA of 435.33, indicating a neutral trend. The MACD of 4.73 indicates Positive momentum. The RSI at 42.70 is Neutral, neither overbought nor oversold. The STOCH value of 6.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	¥13.60B	12.33	―	1.43%	10.77%	131.68%
2911	68 Neutral	¥4.30B	6.34	―	1.55%	-1.00%	31.15%
2894	66 Neutral	¥6.11B	12.62	―	1.22%	1.52%	28.70%
2877	64 Neutral	¥9.10B	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	¥4.23B	13.31	―	―	2.99%	-87.21%
2876	51 Neutral	¥4.22B	3.93	―	3.37%	-15.71%	-293.44%