Tsutsumi Jewelry Co (7937) AI Stock Analysis

• Market Cap: ¥53.05B
• Dividend Yield: 3.5%
• Average Volume (3M): 5.45K
• Price to Earnings (P/E): 20.2
• Beta (1Y): 0.49
• Revenue Growth: 22.68%
• EPS Growth: -9.41%
• Country: JP
• Employees: 879
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Luxury Goods
• EPS (TTM): 140.42
• Shares Outstanding: 15,630,000
• 10 Day Avg. Volume: 5,160
• 30 Day Avg. Volume: 5,453
• PEG Ratio: 0.25
• Price to Book (P/B): 0.52
• Price to Sales (P/S): 1.42
• P/FCF Ratio: -18.68
• 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: ¥3,559.00 ▲(39.68% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is held back primarily by the shift to negative operating and free cash flow despite rising earnings. Offsetting this, the debt-free balance sheet reduces financial risk, technicals show a strong uptrend, and valuation/dividend metrics are reasonable.

Positive Factors

Debt-free balance sheet

A zero-debt balance sheet gives Tsutsumi durable financial flexibility in a cyclical luxury market. It reduces default risk, supports capital allocation (store investments, inventory, dividends), and provides a buffer while management addresses cash-conversion challenges without needing urgent external financing.

Improving revenue and net income

Consistent top-line growth and a near threefold rise in reported net income indicate strengthening demand and better product or channel execution. Sustained revenue and profit expansion support long-term competitiveness, allow reinvestment in retail footprint and merchandising, and underpin margin recovery efforts.

Rising operating profitability

Material improvement in operating margin reflects better cost control and operating leverage across retail operations. If maintained, higher operating profitability creates room to absorb commodity cost swings, fund marketing and digital initiatives, and sustainably improve returns despite the company’s large equity base.

Negative Factors

Negative operating and free cash flow

Recent negative operating and free cash flows are a persistent risk: they suggest working capital, inventory or investment needs are absorbing cash despite rising reported profits. Over months, sustained negative cash conversion can force asset sales, dividend cuts, or borrowing, undermining strategic flexibility.

Gross margin erosion

Easing gross margins point to pressure from product mix, pricing or higher input costs (precious metals/gemstones). For a jewelry retailer, sustained gross margin erosion directly compresses profitability and makes earnings more sensitive to procurement cycles and competitive pricing over the medium term.

Modest returns on equity

ROE remaining below mid-single digits despite stronger profits indicates capital is not yet being deployed to generate high shareholder returns. A large equity base with low ROE limits long-term value creation and raises the bar for management to translate revenue gains into higher profitability and cash generation.

Tsutsumi Jewelry Co Business Overview & Revenue Model

Company Description

Tsutsumi Jewelry Co.,Ltd. engages in manufacturing, wholesaling, and retailing jewelry primarily in Japan. It offers jewelry design, as well as reconditioning and repair of pre-owned jewelry. The company also operates precious stone trading centers in the United States, Belgium, Israel, India, and Thailand. It operates 173 specialty jewelry retail stores in Japan. The company was formerly known as Tsutsumi Precious Metals and Crafts Co., Ltd. and changed its name to Tsutsumi Jewelry Co., Ltd. in April 1988. Tsutsumi Jewelry Co.,Ltd. was founded in 1962 and is headquartered in Warabi, Japan.

How the Company Makes Money

Tsutsumi Jewelry Co generates revenue primarily through the sale of its jewelry products across a network of retail stores and online platforms. The company capitalizes on its brand reputation and craftsmanship to attract customers who value quality and design. Key revenue streams include direct sales in domestic and international markets, leveraging both physical retail presence and e-commerce channels. Strategic partnerships with suppliers and marketing collaborations also play a role in enhancing its market reach and profitability. Additionally, Tsutsumi Jewelry may host promotional events and seasonal sales to boost customer engagement and drive sales.

Tsutsumi Jewelry Co Financial Statement Overview

Summary

Revenue and earnings have been improving, and the company maintains a very conservative, debt-free balance sheet. However, operating and free cash flow turned negative in 2024 and remained negative in 2025, creating a material cash-conversion risk that weighs heavily on overall financial quality.

Income Statement

Revenue has improved steadily since 2022, accelerating to 5.4% growth in 2025, alongside meaningful profit expansion (net income up from 0.7B in 2022 to 2.0B in 2025). Operating profitability also strengthened, with operating profit margin rising from ~6.8% (2022) to ~9.9% (2025). The main weakness is margin variability: gross margin peaked in 2022–2023 but eased in 2024–2025, suggesting some pressure from product mix, pricing, or costs even as operating efficiency improved.

Balance Sheet

The balance sheet is conservatively positioned with zero debt across the period, providing high financial flexibility and limiting downside risk in a cyclical luxury environment. Equity and assets are large and stable (equity ~66–68B), and returns on equity have been improving (from ~0.6% in 2021 to ~2.9% in 2025). The key drawback is that returns remain modest overall, indicating the company is not yet generating strong profits relative to its sizable equity base.

Cash Flow

Cash generation has become a notable concern: operating cash flow turned negative in 2024 and stayed negative in 2025, and free cash flow also swung sharply negative in both years after being positive in 2020–2023 (including a strong 2020). This weak cash conversion contrasts with rising reported earnings, which increases the risk that working capital swings or investment needs are absorbing cash. A positive offset is that the debt-free balance sheet provides a cushion, but sustained negative cash flow would still weigh on flexibility over time.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	25.40B	24.84B	19.91B	18.12B	16.48B	18.32B
Gross Profit	11.42B	11.38B	9.97B	9.55B	9.01B	8.34B
EBITDA	2.71B	2.75B	1.87B	1.64B	1.35B	895.00M
Net Income	1.57B	1.99B	1.16B	909.00M	684.00M	423.00M
Balance Sheet
Total Assets	69.08B	69.64B	69.08B	68.34B	67.91B	68.33B
Cash, Cash Equivalents and Short-Term Investments	31.53B	33.64B	36.54B	38.50B	38.86B	38.44B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	1.67B	1.83B	2.16B	1.81B	1.82B	1.58B
Stockholders Equity	67.41B	67.80B	66.91B	66.53B	66.09B	66.75B
Cash Flow
Free Cash Flow	0.00	-1.88B	-1.27B	71.00M	901.00M	116.00M
Operating Cash Flow	0.00	-1.33B	-968.00M	643.00M	1.51B	278.00M
Investing Cash Flow	0.00	-471.00M	-214.00M	-536.00M	-644.00M	183.00M
Financing Cash Flow	0.00	-1.09B	-781.00M	-469.00M	-453.00M	-1.52B

Tsutsumi Jewelry Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2548.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7937, the sentiment is Positive. The current price of 2548 is below the 20-day moving average (MA) of 3011.80, below the 50-day MA of 2788.14, and above the 200-day MA of 2394.97, indicating a bullish trend. The MACD of 143.80 indicates Negative momentum. The RSI at 75.97 is Negative, neither overbought nor oversold. The STOCH value of 95.66 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7937.

Tsutsumi Jewelry Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9904	75 Outperform	¥11.34B	24.66	―	5.21%	6.89%	-1.46%
9990	74 Outperform	¥24.70B	11.81	―	3.99%	-2.12%	-15.35%
7937	68 Neutral	¥53.05B	20.18	2.46%	3.50%	22.68%	-9.41%
2736	65 Neutral	¥2.28B	13.39	―	1.21%	1.04%	-66.56%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7810	50 Neutral	¥3.85B	155.02	―	0.25%	18.69%	5.17%
7872	50 Neutral	¥6.66B	-11.45	―	4.64%	-0.68%	46.43%