Negative Operating Cash FlowA sustained swing to negative operating and free cash flow raises a structural cash-conversion concern: working capital or investment needs are absorbing earnings. Over months, this can limit reinvestment, dividend sustainability or require financing despite a debt-free balance sheet.
Gross-margin PressureEasing gross margins since 2024 signals exposure to product-mix shifts, procurement cost inflation (precious metals/gems) or limited pricing pass-through. If structural, margin compression could persist and constrain profit growth even as revenues rise, pressuring long-term profitability.
Modest Returns On EquityROE remains low relative to equity scale (~¥66–68B), indicating limited capital efficiency. Persistently modest ROE constrains shareholder value creation and suggests management may need stronger allocation discipline (buybacks, higher-margin sales or asset optimization) to improve long-term returns.