Toho Lamac Co., Ltd. (7422) AI Stock Analysis

• Market Cap: ¥2.13B
• Dividend Yield: 2.29%
• Average Volume (3M): 7.42K
• Price to Earnings (P/E): 145.6
• Beta (1Y): 0.31
• Revenue Growth: 0.04%
• EPS Growth: -64.31%
• Country: JP
• Employees: 162
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): 13.69
• Shares Outstanding: 5,120,700
• 10 Day Avg. Volume: 3,670
• 30 Day Avg. Volume: 7,420
• PEG Ratio: -1.69
• Price to Book (P/B): 0.56
• Price to Sales (P/S): 0.56
• P/FCF Ratio: -2.66
• 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: 43 Neutral
• Price Target: ¥401.00 ▼(-19.80% Downside)
• Action: Reiterated Date: 02/02/26
• Date: Action: Reiterated 02/02/26

The score is driven primarily by weak financial performance, especially the sharp deterioration to negative operating and free cash flow alongside declining revenue and thin profitability. Technical indicators add a modestly negative signal (below key moving averages with negative MACD), while valuation remains a headwind due to the very high P/E despite a moderate dividend yield.

Positive Factors

Balance sheet resilience

Moderate leverage and a sizable equity base provide a durable financial buffer. That cushion helps absorb demand shocks or working-capital swings, preserves access to credit, and gives management time to restructure operations or invest in strategic fixes without immediate solvency risk.

Stable gross margins

Consistent gross margins in the high-20% range indicate structural pricing power or cost control at the product level. This margin floor supports the potential to restore operating profitability if SG&A is managed and helps sustain unit economics over a multi-month horizon.

Prior cash-generation track record

The company has demonstrated the ability to generate operating cash in recent years, showing the underlying business can convert sales to cash under stable conditions. That historical cash generation suggests management can potentially rebuild liquidity through working-capital and operational fixes.

Negative Factors

Multi-year revenue decline

A sustained revenue contraction over several years signals weakening demand or loss of competitive position. Persistent top-line declines erode scale, reduce bargaining power with suppliers, and make it harder to cover fixed costs, undermining long-term margin and reinvestment capacity.

Materially negative cash flow in latest year

A sharp shift to negative operating and free cash flow materially reduces financial flexibility. With cash outflows exceeding core cash generation, the company may need external funding, asset sales, or cost cuts, constraining investments and increasing execution risk over the medium term.

Thin profitability and weak returns

Extremely thin margins and near-zero ROE indicate poor capital efficiency and minimal profit buffer. This makes the business highly sensitive to input cost increases or sales declines, reducing capacity to finance growth from operations and weakening long-term shareholder return prospects.

Toho Lamac Co., Ltd. Business Overview & Revenue Model

Company Description

Toho Lamac Co., Ltd. engages in the wholesale and retail of shoes. The company offers pumps, sandals, boots, rubber, sneakers, rain shoes, casual shoes, kids shoes, men's and women's shoes, genuine leather shoes, and safety boots; and accessories, such as bags, belts, and socks. The company was formerly known as Toho Rubber Industries Co., Ltd. and changed its name to Toho Lamac Co., Ltd. in January 1988. Toho Lamac Co., Ltd. was incorporated in 1958 and is based in Bunkyo, Japan.

How the Company Makes Money

null

Toho Lamac Co., Ltd. Financial Statement Overview

Summary

Financial quality is weak: multi-year revenue declines (2023–2025) and very thin profitability (~0.4% net margin with negative EBIT in 2025) are compounded by materially negative operating and free cash flow in 2025. The balance sheet is more supportive (moderate leverage), but rising debt-to-equity and very low returns on equity limit the cushion.

Income Statement

Performance remains pressured despite a rebound from 2023’s loss. Revenue has been declining for multiple years (2025: -4.4% YoY; 2024: -6.7%; 2023: -20.1%), pointing to a challenged demand/competitive backdrop. Profitability is thin: 2025 net margin is ~0.4% and EBIT is negative, a sharp step down from 2024’s modest profitability. Gross margin has held in the high-20% range recently, but the inability to convert that into consistent operating profit keeps earnings quality weak.

Balance Sheet

Leverage is moderate overall, with debt-to-equity generally in a reasonable range, though 2025 shows a notable debt increase (debt-to-equity rising to ~0.34 from ~0.17 in 2024). Equity remains sizable relative to assets, offering some balance sheet resilience. However, returns on equity are very low (near-zero in 2025 and only mid-single-digit in 2024), indicating the capital base is not being utilized efficiently and amplifying sensitivity if profitability weakens further.

Cash Flow

Cash generation is the key weakness. In 2025, operating cash flow turned materially negative and free cash flow was deeply negative, a major deterioration from the positive cash flow profile in 2023–2024. The trend is volatile across years (negative in 2022, positive in 2023–2024, then sharply negative in 2025), which raises concerns around working-capital swings and/or elevated investment needs. With earnings already thin, negative operating cash flow in the latest period reduces financial flexibility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.55B	4.76B	5.10B	6.38B	6.34B
Gross Profit	1.29B	1.43B	1.27B	1.49B	1.61B
EBITDA	109.78M	174.94M	-113.17M	33.61M	-173.79M
Net Income	17.48M	124.35M	-135.66M	-6.14M	-217.78M
Balance Sheet
Total Assets	6.71B	6.11B	5.96B	6.20B	6.41B
Cash, Cash Equivalents and Short-Term Investments	2.02B	1.89B	1.83B	1.41B	2.08B
Total Debt	1.53B	800.00M	800.00M	901.58M	1.00B
Total Liabilities	2.18B	1.44B	1.51B	1.70B	1.75B
Stockholders Equity	4.52B	4.67B	4.44B	4.50B	4.66B
Cash Flow
Free Cash Flow	-955.00M	71.77M	346.46M	-666.05M	143.46M
Operating Cash Flow	-482.10M	106.79M	384.80M	-654.17M	154.50M
Investing Cash Flow	-306.70M	9.95M	192.59M	235.79M	277.73M
Financing Cash Flow	672.10M	-55.19M	-155.93M	-158.13M	-59.80M

Toho Lamac Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 500.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7422, the sentiment is Negative. The current price of 500 is above the 20-day moving average (MA) of 440.85, above the 50-day MA of 465.30, and below the 200-day MA of 510.75, indicating a bearish trend. The MACD of -12.60 indicates Positive momentum. The RSI at 33.93 is Neutral, neither overbought nor oversold. The STOCH value of 12.72 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7422.

Toho Lamac Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2668	76 Outperform	¥8.34B	9.27	―	2.33%	1.12%	33.94%
7936	73 Outperform	¥3.08T	27.18	34.14%	0.56%	20.12%	43.82%
7938	67 Neutral	¥7.70B	6.85	―	2.91%	-2.87%	-19.37%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
8166	47 Neutral	¥3.93B	1.99	―	―	-5.25%	-77.53%
7422	43 Neutral	¥2.13B	145.56	―	2.29%	0.04%	-64.31%
7603	41 Neutral	¥3.33B	-1.51	―	―	-7.88%	-11.22%