H2O Retailing Corporation (8242) AI Stock Analysis

• Market Cap: ¥239.27B
• Dividend Yield: 2.04%
• Average Volume (3M): 396.41K
• Price to Earnings (P/E): 6.6
• Beta (1Y): 0.94
• Revenue Growth: 3.71%
• EPS Growth: 64.27%
• Country: JP
• Employees: 8,196
• Sector: Consumer Cyclical
• Sector Strength: 68
• Industry: Department Stores
• EPS (TTM): -25.05
• Shares Outstanding: 125,201,390
• 10 Day Avg. Volume: 328,210
• 30 Day Avg. Volume: 396,406
• PEG Ratio: -0.44
• Price to Book (P/B): 0.79
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: ¥2,115.78
• Price Target Upside: 7.87% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 72 Outperform
• Price Target: ¥2,179.00 ▲(11.09%Upside)

The strong valuation and positive financial performance are key strengths for H2O Retailing Corporation. High debt levels present a risk, but the overall financial health and valuation metrics suggest an attractive investment opportunity. Technical indicators are neutral to slightly positive, supporting a stable to modestly bullish outlook.

H2O Retailing Corporation Business Overview & Revenue Model

Company Description

H2O Retailing Corporation operates department stores, supermarkets, and shopping centers in Japan. It operates through four segments: Department Store Business, Supermarket Business, Shopping Centre Business, and Other Businesses. The Department Store Business segment sells clothing, accessories, home furnishings, foods, and other products. The Supermarket Business segment operates general merchandise stores and supermarkets; and produces food products. The Shopping Centre Business segment provides rental management services for commercial facilities and building maintenance services. The Other Businesses segment engages in the hotel, remodeling, home delivery, membership management, temporary staffing, eating and drinking establishments, information processing, and other business activities. The company also manufactures and sells laver seaweed, prepared food, bread, dried foods, and furniture and furnishings; produces organic farm products; and sells apparel, toys, personal care products, uniforms, pet-accessories, furniture and interior goods, and electronic gift certificates. In addition, it engages in the planning, production management, and sale of women's apparel; data processing and systems development, book-keeping and payroll calculation, quality testing and consulting, and foreign trade activities; and management of internet shopping site, café, company cafeteria, and restaurants. Further, the company operates salons for bridal use; and offers manpower dispatching and employment agency services. Additionally, it provides property management and development services. The company was formerly known as Hankyu Department Stores, Inc. and changed its name to H2O Retailing Corporation in October 2007. H2O Retailing Corporation was founded in 1929 and is based in Osaka, Japan.

How the Company Makes Money

H2O Retailing Corporation generates revenue through multiple channels. The primary source of income is its department stores, such as Hankyu and Hanshin, which offer a vast selection of domestic and international brands. Supermarkets and convenience stores contribute significantly to the company's earnings by providing everyday essentials and food products. Additionally, H2O Retailing benefits from its specialty stores that focus on niche markets and unique product offerings. The company also engages in strategic partnerships and collaborations to enhance its retail operations and expand its customer base. Revenue is further supported by real estate ventures and the management of shopping centers, which provide rental income and contribute to the overall profitability of the corporation.

H2O Retailing Corporation Financial Statement Overview

Summary

H2O Retailing Corporation demonstrates a positive growth trajectory with increasing revenues and improved profitability. The balance sheet remains stable with good equity, but high debt levels pose potential risks. Cash flow improvements are promising, though historical volatility should be monitored.

Income Statement

The income statement shows a positive trend in revenue growth with a significant increase from 2024 to 2025. Gross profit margin and net profit margin have improved, indicating enhanced profitability. However, EBIT and EBITDA margins show some volatility over the years, suggesting room for operational efficiency improvements.

Balance Sheet

The balance sheet indicates a stable equity position with a healthy debt-to-equity ratio. However, the debt levels remain high, which could pose potential risks. The equity ratio is solid, reflecting a good balance between liabilities and equity. Return on equity has improved, which is a positive indicator of shareholder value creation.

Cash Flow

Cash flow analysis reveals a positive free cash flow growth, suggesting improved cash generation capabilities. The operating cash flow to net income ratio is strong, indicating good cash flow management. However, historical volatility in free cash flow highlights potential risks in sustaining cash flow stability.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	681.76B	657.40B	628.09B	518.45B	739.20B
Gross Profit	307.36B	287.61B	265.45B	218.68B	211.90B
EBITDA	76.69B	43.65B	31.05B	19.15B	-4.49B
Net Income	34.84B	21.91B	16.38B	9.87B	-24.79B
Balance Sheet
Total Assets	730.50B	709.21B	686.42B	654.56B	625.95B
Cash, Cash Equivalents and Short-Term Investments	55.59B	68.42B	58.67B	34.72B	49.99B
Total Debt	164.18B	174.13B	190.39B	188.90B	202.34B
Total Liabilities	417.07B	416.06B	413.61B	393.62B	396.67B
Stockholders Equity	300.72B	269.14B	250.02B	238.01B	229.27B
Cash Flow
Free Cash Flow	26.05B	18.75B	-418.00M	-23.71B	-5.28B
Operating Cash Flow	46.27B	49.33B	30.30B	6.46B	12.76B
Investing Cash Flow	-13.30B	-17.75B	5.78B	-5.20B	-20.76B
Financing Cash Flow	-44.99B	-22.53B	-12.55B	-28.58B	31.86B

H2O Retailing Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1961.50
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8242, the sentiment is Positive. The current price of 1961.5 is above the 20-day moving average (MA) of 1933.80, above the 50-day MA of 1952.51, and below the 200-day MA of 2084.44, indicating a neutral trend. The MACD of 5.12 indicates Negative momentum. The RSI at 54.05 is Neutral, neither overbought nor oversold. The STOCH value of 57.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8242.

H2O Retailing Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3086	74 Outperform	¥526.35B	12.69	10.25%	2.19%	8.72%	19.26%
8233	73 Outperform	$347.48B	10.47	7.14%	2.90%	2.11%	-4.24%
8242	72 Outperform	¥239.27B	6.64	11.92%	2.04%	3.71%	64.27%
3099	69 Neutral	$795.14B	15.29	8.71%	2.52%	3.56%	-2.54%
Sector *	66 Neutral	€19.43B	8.79	7.83%	3.75%	0.45%	-40.36%
8273	65 Neutral	¥220.15B	18.28		2.92%	18.53%	-36.19%
8278	58 Neutral	¥174.50B	35.86		1.49%	1.54%	-15.67%

H2O Retailing Corporation Corporate Events

H2O Retailing Completes Share Disposal to Directors

H2O Retailing Corporation has completed the payment procedures for disposing of its own shares as restricted stock to its directors and other key personnel. This strategic move involves the disposal of 110,400 common shares at a price of 1,870 yen per share, amounting to a total of JPY 206.448 million, and is aimed at aligning the interests of the company’s leadership with its long-term goals.

H2O Retailing Corporation Announces Share Buyback

H2O Retailing Corporation has announced the purchase of 1,289,600 of its own common shares for a total of ¥2,486,314,100, as part of a broader share buyback strategy authorized by its Board of Directors. This move, conducted through market acquisition on the Tokyo Stock Exchange, is part of a larger plan to purchase up to 10,000,000 shares by March 31, 2026, aiming to enhance shareholder value and optimize capital structure.

H2O Retailing Shifts to Restricted Stock Compensation Plan

H2O Retailing Corporation announced the disposal of its own shares as restricted stock to directors and executives, transitioning from a stock option plan to a restricted stock compensation plan. This move aims to align the interests of directors with shareholders and enhance corporate value, impacting the company’s executive compensation structure and stakeholder engagement.

H2O Retailing Corporation Initiates Share Buyback Program

H2O Retailing Corporation has announced the purchase of its own shares, acquiring 1,803,300 common shares for approximately ¥3.6 billion between May 14 and May 31, 2025. This move is part of a broader strategy approved by the board to buy back up to 10 million shares, reflecting a potential 8.18% of the total issued shares, with a maximum budget of ¥15 billion, aimed at enhancing shareholder value and optimizing capital structure.

H2O Retailing Corporation Acquires Own Shares to Boost Shareholder Returns

H2O Retailing Corporation announced the acquisition of 679,000 of its own shares through off-auction repurchase trading as part of its Mid-term Management Plan for FY2025-2027. This move is intended to enhance shareholder returns, with a plan to acquire up to 10,000,000 shares by March 2026, reflecting a strategic focus on increasing total return ratios.

H2O Retailing Corporation Announces Share Repurchase Plan

H2O Retailing Corporation announced a resolution to repurchase up to 800,000 of its own shares through the Tokyo Stock Exchange’s off-auction trading system, ToSTNeT-3. This move is part of a broader strategy to acquire up to 10 million shares by March 2026, potentially impacting the company’s share value and market positioning.

H2O Retailing Corporation Strengthens Group Cohesion While Maintaining Independence

H2O Retailing Corporation has announced its strategic positioning within the Hankyu Hanshin Toho Group, emphasizing its independence while maintaining strong collaboration with the group. The company aims to enhance its market presence in the Kansai Area without facing business constraints or risks from its affiliations, as it primarily serves general consumers.

H2O Retailing Introduces New Restricted Stock Compensation Plan

H2O Retailing Corporation announced the introduction of a new restricted stock compensation plan for its directors, replacing the existing stock-compensation-type stock options. This plan aims to align the interests of directors with shareholders, enhance corporate value, and motivate directors to achieve medium-term goals. The plan includes service and performance condition types of restricted shares, with transfer restrictions based on tenure and performance criteria. The proposal will be submitted for approval at the upcoming General Meeting of Shareholders.

H2O Retailing Updates Strategic Financial Measures

H2O Retailing Corporation’s Board of Directors has reviewed and updated its strategic measures aimed at enhancing management’s awareness of capital costs and stock price performance. This initiative, initially announced in May 2024, reflects the company’s ongoing commitment to optimizing financial management and shareholder value, potentially impacting its market positioning and stakeholder interests.

H2O Retailing Reports Record FY2025 Results, Anticipates FY2026 Challenges

H2O Retailing Corporation reported record-high consolidated results for FY2025, with significant growth in gross sales and operating profit driven by strong performance in both its department store and supermarket businesses. Despite this success, the company forecasts a temporary decrease in consolidated operating profit for FY2026 due to expected challenges in the department store sector and extraordinary gains recorded in the previous year. The annual dividend is set to increase, reflecting confidence in long-term growth.

H2O Retailing Corporation Announces Share Buyback Plan

H2O Retailing Corporation has announced a strategic decision to repurchase up to 10 million of its own shares, valued at a maximum of 15 billion yen, as part of its Mid-term Management Plan for FY2025-2027. This move is aimed at enhancing shareholder returns and reflects the company’s commitment to managing capital costs and stock price effectively, potentially strengthening its market position and investor confidence.

H2O Retailing Corporation Announces Increased Year-End Dividend

H2O Retailing Corporation announced an increase in its year-end dividend to ¥22.00 per share, reflecting a record high profit for the fiscal year ended March 2025. This decision aligns with the company’s policy of stable profit distribution and supports its medium- to long-term growth plans, benefiting shareholders with an annual dividend of ¥42.00 per share.

H2O Retailing Corporation Reports Strong Financial Performance for FY2025

H2O Retailing Corporation reported a significant increase in its financial performance for the fiscal year ended March 31, 2025, with net sales rising by 3.7% and profit attributable to owners of the parent increasing by 59.1%. The company also announced a revision in its dividend forecast, reflecting a positive outlook despite anticipated challenges in the upcoming fiscal year, including a projected decline in profits.