UNIFORM NEXT CO. LTD. (3566) AI Stock Analysis

• Market Cap: ¥7.31B
• Dividend Yield: 0.51%
• Average Volume (3M): 8.09K
• Price to Earnings (P/E): 14.1
• Beta (1Y): 0.17
• Revenue Growth: 16.10%
• EPS Growth: 36.89%
• Country: JP
• Employees: 149
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 16.51
• Shares Outstanding: 10,123,178
• 10 Day Avg. Volume: 11,280
• 30 Day Avg. Volume: 8,086
• PEG Ratio: 0.23
• Price to Book (P/B): 1.75
• Price to Sales (P/S): 0.68
• P/FCF Ratio: -38.31
• 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: 68 Neutral
• Price Target: ¥806.00 ▲(20.84% Upside)
• Action: Downgraded Date: 02/06/26
• Date: Action: Downgraded 02/06/26

The score is driven primarily by strong financial progress (notably faster growth, better margins, and low leverage), offset by material cash-flow volatility and negative 2025 free cash flow. Technically, the uptrend is intact but momentum is overbought, while valuation appears reasonable with a modest dividend yield.

Positive Factors

Revenue growth acceleration

Revenue accelerated ~38% in 2025 after steady gains in 2022–2024, reflecting stronger product demand and market reach. Sustained top-line expansion supports capacity utilization, scale economies and investment capacity over the medium term, underpinning durable earnings growth.

Margin improvement and gross-margin stability

Operating and net margins improved in 2025 while gross margin remained ~37%, indicating the company retained pricing or cost control advantages. Stable gross margins plus rising operating margins suggest sustainable operational leverage and improved profitability quality over coming quarters.

Conservative balance sheet and rising ROE

Leverage remains very low even after some debt re-introduction, while ROE improved to ~13.4% in 2025. This combination provides financial flexibility for strategic investment or downturns, and the improving capital efficiency supports sustainable shareholder returns over the medium term.

Negative Factors

Cash-flow volatility and negative 2025 FCF

Cash conversion swung negative in 2025 despite revenue and earnings gains, suggesting working-capital or investment drains. Persistent negative free cash flow would constrain reinvestment, dividends or debt reduction and raise execution and liquidity risk if the pattern continues.

Inconsistent cash-generation history

Wide swings between large positive and negative free cash flows across recent years indicate unstable cash dynamics. Such inconsistency makes capital planning harder, increases refinancing risk during downturns, and undermines confidence in sustaining investments or shareholder returns.

Modest and variable net margins

Net margins are modest for the retail apparel sector and have fluctuated historically, leaving limited buffer against cost shocks or competitive price pressure. Low, variable net margins constrain free cash flow upside and magnify the impact of any margin compression on long-term profitability.

UNIFORM NEXT CO. LTD. Business Overview & Revenue Model

Company Description

Uniform Next Co., Ltd. sells uniforms to companies, stores, and individuals in Japan. The company offers restaurant uniforms, such as cook coats, lab coats, aprons, T-shirts, polo shirts, samue, and Jinbei products, as well as printing and embroidery on uniforms; workwear work clothes for construction, civil engineering, electricity, machinery, ironwork, transportation, cleaning, factory, and other on-site workwear; and medical wear, including medical examination clothes, casey lab coats, scrubs, and nurse wear. It also offers office clothing that include informs for overblouses, shirts, cut-sews, vests, skirts, culottes, pants, and dresses, as well as accessories. The company offers its products through mail order and visiting sale channels. Uniform Next Co., Ltd. was incorporated in 1994 and is headquartered in Fukui, Japan.

How the Company Makes Money

UNIFORM NEXT CO. LTD. makes money through the direct sale of uniforms and related products to businesses across different industries. The company's revenue model is centered around designing and producing customized uniforms that align with the branding and functional requirements of their clients. Key revenue streams include bulk orders from corporate clients, recurring contracts with healthcare institutions for medical attire, and partnerships with hospitality chains for staff uniforms. Additionally, the company may engage in collaborations with fabric manufacturers and designers to enhance its product offerings and maintain a competitive edge in the market. Revenue is primarily generated through these sales and long-term partnerships, contributing to the company's financial growth.

UNIFORM NEXT CO. LTD. Financial Statement Overview

Summary

Strong revenue acceleration and improved margins in 2025 support a solid operating trend, and the balance sheet remains conservatively financed with low leverage and improving ROE. However, cash-flow quality is a key drag as 2025 operating and free cash flow turned negative despite higher earnings, reflecting uneven cash conversion.

Income Statement

Revenue growth accelerated meaningfully, with 2025 revenue up ~38% versus 2024 (after solid growth in 2022–2024). Profitability also improved in 2025, with net margin rising to ~5.3% (from ~3.9% in 2024) and operating margin improving to ~7.8%. Gross margin has been stable around ~37% across the period, which supports earnings resilience, though net margins remain modest for the sector and showed some variability (e.g., stronger in 2023 than 2024).

Balance Sheet

The balance sheet appears conservatively financed: leverage is low with debt-to-equity declining to ~0.08 in 2025 (and near-zero in 2023). Equity has grown steadily alongside assets, and returns on equity have improved to ~13.4% in 2025 (from ~9.7% in 2024), indicating better capital efficiency. The main watch item is the re-introduction/increase of debt since 2023, but overall leverage remains very manageable.

Cash Flow

Cash flow quality is the weak spot due to volatility. 2024 showed strong cash generation (operating cash flow ~¥728m and free cash flow ~¥717m), but 2025 swung to negative operating cash flow (~-¥98m) and negative free cash flow (~-¥176m) despite higher earnings—suggesting working-capital or investment-related cash usage. Free cash flow was also sharply negative in 2023, highlighting inconsistency that increases execution and liquidity risk if the pattern persists.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.16B	9.86B	8.39B	7.45B	6.33B	5.12B
Gross Profit	2.65B	3.63B	3.09B	2.78B	2.35B	1.91B
EBITDA	630.06M	848.00M	571.09M	592.10M	480.79M	427.07M
Net Income	384.15M	517.56M	325.01M	354.26M	276.48M	233.22M
Balance Sheet
Total Assets	5.65B	5.36B	4.95B	4.07B	3.71B	3.41B
Cash, Cash Equivalents and Short-Term Investments	2.28B	2.23B	2.36B	1.28B	1.96B	1.69B
Total Debt	358.32M	308.32M	408.33M	0.00	26.70M	123.50M
Total Liabilities	2.11B	1.50B	1.59B	1.02B	988.47M	948.03M
Stockholders Equity	3.54B	3.86B	3.36B	3.05B	2.72B	2.47B
Cash Flow
Free Cash Flow	0.00	-176.00M	717.00M	-628.97M	389.02M	232.55M
Operating Cash Flow	0.00	-98.23M	728.00M	135.19M	408.18M	253.92M
Investing Cash Flow	0.00	107.96M	-14.53M	-769.51M	-16.85M	-22.45M
Financing Cash Flow	0.00	-135.36M	368.38M	-51.68M	-121.73M	-129.82M

UNIFORM NEXT CO. LTD. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 667.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3566, the sentiment is Positive. The current price of 667 is below the 20-day moving average (MA) of 724.65, below the 50-day MA of 692.96, and above the 200-day MA of 631.16, indicating a neutral trend. The MACD of 9.02 indicates Positive momentum. The RSI at 54.11 is Neutral, neither overbought nor oversold. The STOCH value of 25.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3566.

UNIFORM NEXT CO. LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7564	74 Outperform	¥634.93B	31.89	―	1.04%	10.84%	16.83%
7606	72 Outperform	¥76.28B	12.50	―	2.73%	10.48%	-34.38%
8214	72 Outperform	¥152.37B	17.50	―	4.49%	2.21%	4.36%
8219	71 Outperform	¥131.42B	15.73	5.53%	6.09%	-1.03%	4.12%
3566	68 Neutral	¥7.31B	14.10	―	0.51%	16.10%	36.89%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7494	47 Neutral	¥8.32B	4.81	―	4.13%	-10.82%	―