FOOD & LIFE COMPANIES (3563) AI Stock Analysis

• Market Cap: ¥1.10T
• Dividend Yield: 0.45%
• Average Volume (3M): 1.36M
• Price to Earnings (P/E): 42.2
• Beta (1Y): 0.70
• Revenue Growth: 18.95%
• EPS Growth: 58.91%
• Country: JP
• Employees: 8,978
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 75.42
• Shares Outstanding: 116,069,180
• 10 Day Avg. Volume: 1,296,550
• 30 Day Avg. Volume: 1,359,913
• PEG Ratio: 0.65
• Price to Book (P/B): 8.95
• Price to Sales (P/S): 2.04
• P/FCF Ratio: 22.30
• 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: ¥10,122.22
• Price Target Upside: 15.79% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 248.01
• Revenue Forecast (FY): ¥497.29B

• Rating: 66 Neutral
• Price Target: ¥10,199.00 ▲(16.67% Upside)
• Action: Downgraded Date: 02/08/26
• Date: Action: Downgraded 02/08/26

The score is driven primarily by improving financial performance and solid cash generation, tempered by balance-sheet leverage. Technicals are a meaningful positive with strong uptrend and momentum, but the overall score is held back by expensive valuation (high P/E and low dividend yield).

Positive Factors

Strong free cash flow generation

Consistent and growing free cash flow (~¥44.9B, +14.5%) with conversion near 63% provides durable internal funding for store reinvestment, capex and deleveraging. This strengthens long-term liquidity and strategic optionality versus reliance on external financing.

Improving top-line and net profitability

Sustained revenue growth (~5.5% TTM) coupled with a meaningful net margin recovery (to ~5.6% from ~2.7%) signals durable operational improvements and pricing or cost initiatives taking hold, improving earnings quality and long-term cash generation potential.

Healthy operating margins and ROE

Robust gross and EBITDA margins and a high ROE (~26.7%) reflect a scalable restaurant model with effective cost control and capital efficiency. These structural profitability metrics support reinvestment and shareholder returns over multiple operating cycles.

Negative Factors

Elevated financial leverage

Leverage at ~3.3x equity materially increases interest and refinancing sensitivity, reducing flexibility for M&A or downturns. Persistent high debt levels heighten solvency risk and could force defensive actions if cash flow weakens or rates rise.

Modest bottom-line margins versus peak levels

Although improving, net margins remain modest and below prior peak operating profiles, indicating structural cost pressure or lost operating leverage. This constrains free cash flow upside and makes profits more vulnerable to input cost shocks over time.

Operating cash flow coverage below net income

OCF at ~0.79x of net income suggests earnings are not fully translating into cash due to working-capital timing or structural collection/inventory patterns. This weakens cash quality and could stress liquidity during slower sales periods despite strong absolute FCF.

FOOD & LIFE COMPANIES Business Overview & Revenue Model

Company Description

Food & Life Companies Ltd. operates a chain of Sushi restaurants. As of September 30, 2021, it operated 610 restaurants in domestic Sushiro; 39 restaurants in Sugidama; 154 restaurants in Kyotaru; 106 in Kaisen-Misakiko; 59 restaurants in overseas Sushiro brand; and 31 restaurants in other areas. The company was formerly known as Sushiro Global Holdings Ltd. and changed its name to Food & Life Companies Ltd. in April 2021. Food & Life Companies Ltd. was founded in 1975 and is headquartered in Suita, Japan.

How the Company Makes Money

FOOD & LIFE COMPANIES generates revenue through multiple key streams, primarily from the sale of its food products in both domestic and international markets. The company leverages a strong distribution network that includes partnerships with major retailers, wholesalers, and e-commerce platforms to reach a wide customer base. Additionally, the company invests in marketing strategies to enhance brand visibility and consumer engagement. Significant partnerships with suppliers enable cost-effective sourcing of raw materials, further contributing to profitability. Moreover, FOOD & LIFE COMPANIES may also explore opportunities in private label products and collaborations with food service providers, expanding its revenue potential.

FOOD & LIFE COMPANIES Financial Statement Overview

Summary

Fundamentals are improving with steady TTM revenue growth (~5.5%) and meaningfully better profitability (TTM net margin ~5.6% vs ~2.7% in FY2023), supported by strong absolute free cash flow (~¥44.9B, ~14.5% growth). The main constraint is elevated leverage (debt ~3.3x equity), which reduces flexibility despite strong ROE (~26.7%).

Income Statement

TTM (Trailing-Twelve-Months) results show healthy operating profitability for restaurants, with gross margin ~48.7% and EBITDA margin ~17.2%, and revenue growth of ~5.5%. Profitability has improved meaningfully versus FY2023–FY2024 (net margin rising from ~2.7% in FY2023 to ~5.6% in TTM), signaling better operating leverage and/or cost control. The main weakness is that margins remain modest at the bottom line (~5–6%) and have not fully returned to the stronger FY2021 operating profile (higher EBIT margin then), suggesting some ongoing cost pressure versus peak levels.

Balance Sheet

The balance sheet shows elevated leverage: debt is ~3.3x equity in TTM (up from ~2.2x in FY2025 annual), which increases sensitivity to rate/earning swings in a cyclical consumer category. Offsetting this, returns on shareholder capital are strong (ROE ~26.7% TTM), indicating the business is generating solid profitability on its equity base. Overall, the structure looks workable but meaningfully debt-heavy, leaving less flexibility if operating conditions weaken.

Cash Flow

Cash generation is solid and improving: TTM operating cash flow is ~¥71.0B and free cash flow is ~¥44.9B, with free cash flow growth of ~14.5%. Free cash flow conversion is decent (free cash flow at ~63% of net income), supporting reinvestment and balance-sheet needs. The key watch-out is coverage: operating cash flow is ~0.79x net income in TTM, implying earnings are not fully translating into operating cash in the period (working-capital or timing effects), even though absolute free cash flow remains strong.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	453.09B	429.57B	361.13B	301.75B	281.30B	240.80B
Gross Profit	220.59B	209.31B	205.33B	167.52B	151.01B	130.23B
EBITDA	77.92B	72.28B	54.59B	37.96B	33.52B	41.52B
Net Income	25.35B	22.94B	14.63B	8.04B	3.61B	13.19B
Balance Sheet
Total Assets	414.65B	398.60B	365.15B	350.68B	331.98B	296.00B
Cash, Cash Equivalents and Short-Term Investments	56.35B	58.82B	51.63B	51.23B	50.64B	29.37B
Total Debt	345.29B	218.66B	216.88B	221.55B	214.21B	172.11B
Total Liabilities	306.24B	297.69B	287.32B	278.94B	266.85B	232.43B
Stockholders Equity	104.61B	97.87B	76.57B	71.36B	65.12B	63.57B
Cash Flow
Free Cash Flow	44.93B	39.25B	35.60B	25.65B	11.58B	18.08B
Operating Cash Flow	71.04B	64.43B	56.33B	42.36B	29.51B	31.68B
Investing Cash Flow	-28.14B	-25.44B	-24.07B	-17.89B	-19.65B	-17.29B
Financing Cash Flow	-30.29B	-29.23B	-34.32B	-23.88B	10.54B	2.11B

FOOD & LIFE COMPANIES Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8742.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3563, the sentiment is Positive. The current price of 8742 is below the 20-day moving average (MA) of 9129.30, above the 50-day MA of 8641.94, and above the 200-day MA of 7633.43, indicating a bullish trend. The MACD of 286.74 indicates Negative momentum. The RSI at 64.91 is Neutral, neither overbought nor oversold. The STOCH value of 78.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3563.

FOOD & LIFE COMPANIES Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2702	74 Outperform	¥969.27B	28.58	13.08%	0.76%	2.73%	18.30%
7581	72 Outperform	¥343.09B	29.75	9.66%	0.55%	14.33%	36.83%
3563	66 Neutral	¥1.10T	42.20	25.68%	0.45%	18.95%	58.91%
3197	63 Neutral	¥812.18B	48.49	9.53%	0.55%	15.58%	60.90%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7550	59 Neutral	¥1.56T	38.04	15.82%	0.78%	11.29%	-4.88%
3397	53 Neutral	¥373.65B	82.10	―	0.24%	9.19%	43.90%

FOOD & LIFE COMPANIES Corporate Events

FOOD & LIFE COMPANIES Delivers Strong Q1 FY2026 Results and Confirms Double‑Digit Growth Outlook

FOOD & LIFE COMPANIES reported strong consolidated results for the three months ended December 31, 2025, with revenue rising 23.7% year on year to ¥122.7 billion and operating profit jumping 40.5%, while profit attributable to owners of the parent increased 39.4%, underpinned by robust store performance and improved profitability. The company’s financial position also strengthened, with total assets up to ¥414.6 billion and equity attributable to owners reaching ¥104.6 billion, and it reaffirmed its dividend plan of ¥35 per share and full‑year fiscal 2026 guidance calling for double‑digit growth in revenue, adjusted EBITDA, and operating profit, signaling sustained expansion and stable shareholder returns despite a more moderate increase projected in full‑year net profit.

The most recent analyst rating on (JP:3563) stock is a Buy with a Yen9572.00 price target. To see the full list of analyst forecasts on FOOD & LIFE COMPANIES stock, see the JP:3563 Stock Forecast page.

FOOD & LIFE COMPANIES Finalizes Terms of Performance-Linked Stock Options for Management

FOOD & LIFE COMPANIES has finalized the specific terms of a new stock option plan that provides share-linked remuneration with stock price conditions for its management, following an earlier board resolution in December 2025. The company will issue 533 share acquisition rights to one internal director (excluding audit and outside directors) and 15 corporate officers, with the exercisable portion tied to position-based minimum vesting rates ranging from 16.6% to 19.6% and option values determined via Monte Carlo simulation. Monetary compensation equal to the payment required for these options will be granted to the recipients and offset against their payment obligations, effectively aligning executive and officer incentives with the company’s stock performance and reinforcing performance-based governance practices.

The most recent analyst rating on (JP:3563) stock is a Buy with a Yen8582.00 price target. To see the full list of analyst forecasts on FOOD & LIFE COMPANIES stock, see the JP:3563 Stock Forecast page.

FOOD & LIFE COMPANIES Finalizes Details of Broad Employee Stock Option Issuance

FOOD & LIFE COMPANIES LTD. has finalized the key details of an employee stock option program previously approved by its board, determining that it will issue 1,235 share acquisition rights in total. The options will be allocated to 219 employees at the parent company, receiving 378 units, and 791 employees at subsidiaries, receiving 857 units, with the move designed to extend equity-based incentives broadly across its workforce and strengthen alignment between employees and shareholders ahead of future business development.

The most recent analyst rating on (JP:3563) stock is a Buy with a Yen8582.00 price target. To see the full list of analyst forecasts on FOOD & LIFE COMPANIES stock, see the JP:3563 Stock Forecast page.

FOOD & LIFE COMPANIES Grants New Stock Options to Align Employees With Shareholder Value

FOOD & LIFE COMPANIES has approved the 29th issuance of share acquisition rights as stock options for 1,237 units, to be allotted to 1,017 employees across the parent company and its subsidiaries, as a medium‑ to long‑term incentive scheme. By tying employee compensation more closely to business performance and share price, with options exercisable between December 2027 and December 2035 at an exercise price of ¥7,637 per share, the company aims to strengthen alignment between staff and shareholders, promote sustainable enhancement of corporate value, and support continued growth across its group operations.

The most recent analyst rating on (JP:3563) stock is a Hold with a Yen8241.00 price target. To see the full list of analyst forecasts on FOOD & LIFE COMPANIES stock, see the JP:3563 Stock Forecast page.

FOOD & LIFE COMPANIES Introduces Long-Term Stock Option Plan for Executives

FOOD & LIFE COMPANIES has approved the issuance of stock options with stock price conditions as a new share-linked remuneration scheme for one internal director and 15 corporate officers, aiming to strengthen the link between executive compensation, business performance, and share price. The 28th series of share acquisition rights will total 602 units, each corresponding to 400 common shares at an exercise price of 1 yen per share, and can be exercised between January 15, 2026, and January 14, 2066, subject to tenure-based and performance-linked vesting tied to relative total shareholder return, underscoring the company’s emphasis on long-term value creation and alignment with shareholders.

The most recent analyst rating on (JP:3563) stock is a Hold with a Yen8241.00 price target. To see the full list of analyst forecasts on FOOD & LIFE COMPANIES stock, see the JP:3563 Stock Forecast page.

FOOD & LIFE COMPANIES Weighs Cutting Investment Unit to Boost Liquidity

FOOD & LIFE COMPANIES has stated that it views a reduction in its investment unit as an effective way to invigorate trading in its shares by attracting more investors, particularly individuals, and enhancing share liquidity. The company says it will continue to study lowering the minimum investment amount to under ¥500,000, taking into account market conditions, its share price level, liquidity, and changes in shareholder composition, signaling a potential move to make its stock more accessible and to broaden its investor base over time.

The most recent analyst rating on (JP:3563) stock is a Hold with a Yen8241.00 price target. To see the full list of analyst forecasts on FOOD & LIFE COMPANIES stock, see the JP:3563 Stock Forecast page.