UNITED ARROWS LTD. (7606) AI Stock Analysis

• Market Cap: ¥76.28B
• Dividend Yield: 2.73%
• Average Volume (3M): 186.62K
• Price to Earnings (P/E): 12.5
• Beta (1Y): 0.55
• Revenue Growth: 10.48%
• EPS Growth: -34.38%
• Country: JP
• Employees: 3,980
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): N/A
• Shares Outstanding: 30,213,676
• 10 Day Avg. Volume: 209,660
• 30 Day Avg. Volume: 186,620
• PEG Ratio: -1.18
• Price to Book (P/B): 1.54
• Price to Sales (P/S): 0.39
• P/FCF Ratio: 13.08
• 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: ¥2,610.00
• Price Target Upside: 9.34% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: ¥2,775.00 ▲(16.25% Upside)
• Action: Reiterated Date: 02/07/26
• Date: Action: Reiterated 02/07/26

The score is driven primarily by improved profitability and a conservative balance sheet, tempered by weak recent cash generation (negative free cash flow) and higher debt. Technicals are supportive with an established uptrend, while valuation (P/E ~11.8 and ~2.61% yield) is reasonable and adds modest support.

Positive Factors

High gross margin

A ~51% gross margin is a durable competitive advantage in apparel retail: it provides pricing power and a buffer against rising input or occupancy costs, allowing the company to sustain positive operating profit and reinvest in merchandising and omnichannel capabilities over the medium term.

Conservative balance sheet

Low leverage and a strong equity base give the company financial flexibility to fund growth, manage seasonal inventory swings, and withstand retail cyclicality without urgent refinancing. This conservative capital structure supports durable credit resilience and strategic optionality.

Revenue recovery & scale

Stable top-line scale and an earnings recovery since 2021 indicate persistent demand and execution across store and e‑commerce channels. Scale helps absorb fixed costs and supports sustained merchandising investment, improving the odds of longer-term margin stabilization.

Negative Factors

Negative free cash flow

Negative FCF in the latest TTM means reported profits are not translating into excess cash after investment. Over several quarters this constrains the firm's ability to self‑fund capex, inventory build or shareholder returns and may force reliance on external funding if persistent.

Rising debt

An increase in total debt, even from a low base, raises medium‑term financial risk when paired with weakening cash conversion. Higher leverage can amplify interest and refinancing burdens and reduce flexibility to respond to retail cycle shocks or invest opportunistically.

Below-peak profitability

Margins and ROE have softened versus prior-year highs, signaling cost pressure or margin dilution. If this weaker profitability persists, it limits internal reinvestment, reduces resilience to competitive or cost shocks, and may pressure long-term returns for equity holders.

UNITED ARROWS LTD. Business Overview & Revenue Model

Company Description

United Arrows Ltd. plans, buys, and retails men's and women's clothing and accessories, and miscellaneous items in Japan. It operates multi-brand shops under the UNITED ARROWS, District UNITED ARROWS, LOEFF, AEWEN MATOPH, BLAMINK, BEAUTY&YOUTH UNITED ARROWS, monkey time BEAUTY&YOUTH UNITED ARROWS, 6(ROKU), H BEAUTY&YOUTH, STEVEN ALAN, UNITED ARROWS green label relaxing, Odette e Odile, DRAWER, ASTRAET, UNITED ARROWS LTD.OUTLET, California General Store, UNITED ARROWS & SONS, and CITEN brands, as well as online store under the UNITED ARROWS ONLINE brand name. The company also sells its products under the coen and CHROME HEARTS brands. United Arrows Ltd. was incorporated in 1975 and is headquartered in Tokyo, Japan.

How the Company Makes Money

UNITED ARROWS LTD. generates revenue primarily through the sale of its apparel and lifestyle products across multiple retail formats, including flagship stores, specialty shops, and an online presence. The company employs a multi-brand strategy, allowing it to capture a wide customer base and diversify its product offerings. Key revenue streams include direct sales from physical stores, e-commerce transactions, and wholesale partnerships with other retailers. Significant factors contributing to its earnings include strong brand recognition, effective marketing strategies, and seasonal promotions that drive customer traffic. Additionally, collaborations with designers and limited-edition releases help create buzz and demand, further enhancing sales.

UNITED ARROWS LTD. Financial Statement Overview

Summary

Income statement and balance sheet are solid (earnings recovery, strong gross margin, low leverage), but the latest TTM cash flow is the key drag: free cash flow is negative and cash conversion is weak, alongside a notable rise in debt.

Income Statement

UNITED ARROWS shows a clear earnings recovery versus 2021, with sustained profitability in the latest periods. Revenue reached 161.6B in TTM (Trailing-Twelve-Months) (up ~3.3%) and operating profit remains positive (EBIT margin ~4.6%), supported by consistently strong gross margin (~51%). The main weakness is that net profitability is still modest for a retailer (TTM net margin ~3.7%) and operating margins are below the stronger FY2023–FY2024 levels, suggesting some recent cost pressure.

Balance Sheet

The balance sheet is conservatively positioned overall, with low leverage in TTM (Trailing-Twelve-Months) (debt-to-equity ~0.19) and solid equity capital (42.7B) relative to assets (79.2B). Returns are healthy (TTM return on equity ~9.2%), though below prior-year levels (FY2024 ~13.9%), indicating profitability has not fully kept pace with the expanding equity base. A watch item is the notable rise in total debt versus recent annual periods.

Cash Flow

Cash generation has weakened in TTM (Trailing-Twelve-Months): operating cash flow is positive (3.4B) but low relative to earnings, and free cash flow is negative (-2.6B), meaning reported profits are not currently translating into excess cash after investment. This contrasts with FY2022–FY2024, which showed consistently positive free cash flow, pointing to either higher working-capital needs or elevated spending levels in the latest period.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	161.56B	150.91B	134.27B	130.13B	118.38B	121.71B
Gross Profit	83.08B	77.31B	69.46B	67.18B	59.09B	55.02B
EBITDA	10.84B	9.64B	9.21B	8.43B	3.64B	-4.98B
Net Income	5.92B	4.28B	4.88B	4.34B	732.00M	-7.20B
Balance Sheet
Total Assets	79.16B	70.14B	60.20B	61.18B	59.70B	63.62B
Cash, Cash Equivalents and Short-Term Investments	6.27B	6.67B	6.49B	8.56B	5.59B	6.60B
Total Debt	8.20B	1.03B	202.00M	2.50B	7.80B	15.60B
Total Liabilities	36.50B	32.32B	25.17B	27.48B	29.63B	33.77B
Stockholders Equity	42.66B	37.82B	35.03B	33.70B	30.07B	29.84B
Cash Flow
Free Cash Flow	-2.55B	4.46B	3.26B	9.10B	5.96B	-6.76B
Operating Cash Flow	3.42B	7.10B	6.34B	10.26B	6.89B	-4.28B
Investing Cash Flow	-7.39B	-6.24B	-2.66B	-1.25B	215.00M	-4.08B
Financing Cash Flow	3.32B	-699.00M	-5.77B	-5.98B	-8.00B	9.27B

UNITED ARROWS LTD. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2387.00
• 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:7606, the sentiment is Positive. The current price of 2387 is below the 20-day moving average (MA) of 2550.25, below the 50-day MA of 2477.52, and above the 200-day MA of 2210.04, indicating a bullish trend. The MACD of 41.22 indicates Negative momentum. The RSI at 65.34 is Neutral, neither overbought nor oversold. The STOCH value of 74.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7606.

UNITED ARROWS 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%
2792	72 Outperform	¥42.97B	12.56	―	3.62%	-0.98%	-29.86%
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%
2726	70 Outperform	¥302.26B	19.26	―	1.46%	12.02%	-15.70%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

UNITED ARROWS LTD. Corporate Events

UNITED ARROWS Weighs Switch to Holding Company Structure to Drive Diversification

UNITED ARROWS LTD. has resolved at its Board of Directors meeting to begin considering a transition to a holding company structure, pending approval at a future General Meeting of Shareholders, as part of its long-term vision toward 2032. The proposed holding company model is intended to support diversification into non-apparel businesses, facilitate M&A-driven growth, enhance group-wide performance management and governance, and give greater autonomy to operating subsidiaries so resources can be allocated more efficiently and decisions made faster. If approved and required procedures are completed, the company is targeting October 2026 for the transition, with detailed structure and scheduling to be announced once finalized.

The most recent analyst rating on (JP:7606) stock is a Hold with a Yen2600.00 price target. To see the full list of analyst forecasts on UNITED ARROWS LTD. stock, see the JP:7606 Stock Forecast page.

UNITED ARROWS Delivers Strong Nine-Month Earnings and Confirms Higher Dividend for FY2025/26

UNITED ARROWS reported consolidated net sales of ¥123.6 billion for the nine months ended December 31, 2025, up 9.4% year on year, with operating profit rising 9.1% to ¥8.8 billion and profit attributable to owners of parent jumping 32.2% to ¥6.7 billion, reflecting improved profitability and higher earnings per share. The company’s financial position strengthened, with total assets and equity both increasing and the equity ratio steady at 53.9%, while it maintained its full-year forecast for FY2025/26, including a projected 9.8% rise in net sales and an 18.7% increase in full-year profit attributable to owners of parent, and confirmed a higher annual dividend payout plan, signaling continued confidence in earnings growth and shareholder returns.

The most recent analyst rating on (JP:7606) stock is a Hold with a Yen2600.00 price target. To see the full list of analyst forecasts on UNITED ARROWS LTD. stock, see the JP:7606 Stock Forecast page.

UNITED ARROWS Delivers Double-Digit January Sales Growth on Strong Winter and Early Spring Demand

UNITED ARROWS reported a strong start to 2026, with total company sales in January rising 16.3% year on year and same-store retail plus online sales up 14.0%, supported by robust winter sale activity and steady demand for early spring collections. Business-casual items such as jackets and pants, along with knits, outerwear, shoes, bags and winter accessories, all contributed to the outperformance, while an additional holiday versus the prior year lifted existing-store sales by an estimated 1.5 percentage points; however, management cautioned that final figures will be revised down by a few points once changes in revenue recognition standards are applied, and noted that subsidiary COEN CO., LTD. saw a 6.7% decline in total sales, underscoring mixed performance within the group.

The most recent analyst rating on (JP:7606) stock is a Hold with a Yen2600.00 price target. To see the full list of analyst forecasts on UNITED ARROWS LTD. stock, see the JP:7606 Stock Forecast page.

United Arrows to Sell Struggling COEN Subsidiary to Gyet for Portfolio Streamlining

United Arrows has signed a definitive agreement to transfer all shares of its loss-making consolidated subsidiary COEN Co., Ltd. to Gyet Co., Ltd., a nationwide casual apparel retailer that recently rebranded and is expanding into a digitally enabled, investment-driven business model in collaboration with GF Holdings. The move, driven by persistent structural shifts in the fashion industry, rising costs, and COEN’s ongoing losses despite restructuring efforts, is intended to give COEN access to broader management resources and supply-chain expertise for brand revitalization, while allowing United Arrows to improve capital efficiency and streamline its brand portfolio, potentially strengthening its competitive positioning and focusing resources on more profitable core operations.

The most recent analyst rating on (JP:7606) stock is a Buy with a Yen2715.00 price target. To see the full list of analyst forecasts on UNITED ARROWS LTD. stock, see the JP:7606 Stock Forecast page.

UNITED ARROWS Posts Double-Digit December Sales Growth Despite Fewer Holidays

UNITED ARROWS reported a robust December 2025, with total company sales up 10.1% year-on-year and existing store sales for retail and online rising 7.1%, driven by a combination of successful promotional initiatives—such as VIP sales and UA Club member events—and solid full-price sales. Key product categories including jackets, pants, and core winter items like knits and outerwear continued to perform strongly despite one fewer holiday than the prior year, which the company estimates shaved about 1.4 percentage points off same-store sales growth, while outlet and other channels also remained firm, partially offset by a 12.6% year-on-year sales decline at subsidiary COEN CO., LTD.; final figures will reflect a modest downward adjustment due to changes in revenue recognition standards, as seen in November’s confirmed data.

The most recent analyst rating on (JP:7606) stock is a Buy with a Yen2715.00 price target. To see the full list of analyst forecasts on UNITED ARROWS LTD. stock, see the JP:7606 Stock Forecast page.

UNITED ARROWS Delays Share Transfer Agreement for COEN Subsidiary

UNITED ARROWS LTD. has postponed the scheduled execution date of the share transfer agreement to sell all shares of its consolidated subsidiary COEN CO., LTD. to Gyet Co., Ltd., citing the need for additional time to finalize terms, and will announce a revised schedule once determined. Following completion of the transaction, COEN will be deconsolidated from UNITED ARROWS’ group, and the company is currently assessing the impact on its consolidated results for the fiscal year ending March 2026, with further disclosures to be made if material effects arise.

The most recent analyst rating on (JP:7606) stock is a Buy with a Yen2715.00 price target. To see the full list of analyst forecasts on UNITED ARROWS LTD. stock, see the JP:7606 Stock Forecast page.