Revenue growth remains highly unstable, evidenced by a 45.6% contraction in 2025Q4, while operating margins struggle to maintain consistency, bottoming out at 0.7% in 2024Q2.
| Sales/Revenue | 14.5B | 12.2B | 10.33B | 9.3B | 7.69B |
| Revenue Growth % | - | 18.13% | 11.02% | 21.01% | - |
| Cost of Goods Sold | 10.13B | 8.6B | 7.38B | 6.97B | 5.73B |
| COGS % of Revenue | - | 70.45% | 71.46% | 74.88% | 74.54% |
| Gross Profit | 4.37B | 3.61B | 2.95B | 2.34B | 1.96B |
| Gross Margin % | 30.13% | 29.55% | 28.54% | 25.12% | 25.46% |
| Gross Profit Growth % | - | 22.32% | 26.1% | 19.4% | - |
| Operating Expenses | 3.58B | 2.95B | 2.43B | 1.94B | 1.81B |
| OpEx % of Revenue | - | 24.2% | 23.51% | 20.87% | 23.56% |
| Selling, General & Admin | 4.54B | 2.3B | 2.05B | 1.62B | 1.53B |
| SG&A % of Revenue | - | 18.87% | 19.85% | 17.43% | 19.86% |
| Research & Development | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - |
| Other Operating Expenses | -3M | 650.57M | 377.95M | 320.23M | 284.57M |
| Operating Income | 792.83M | 652.74M | 519.76M | 395.66M | 146.18M |
| Operating Margin % | 5.47% | 5.35% | 5.03% | 4.25% | 1.9% |
| Operating Income Growth % | - | 25.59% | 31.37% | 170.66% | - |
| EBITDA | 946.98M | 783.94M | 641.77M | 488.03M | 236.28M |
| EBITDA Margin % | 6.53% | 6.42% | 6.21% | 5.25% | 3.07% |
| EBITDA Growth % | - | 22.15% | 31.5% | 106.55% | - |
| D&A (Non-Cash Add-back) | 154.15M | 131.2M | 122.01M | 92.38M | 90.1M |
| EBIT | 793.37M | 652.74M | 554.48M | 424.03M | 268.6M |
| Net Interest Income | -14.2M | -13.18M | -16.17M | -13.51M | -13.1M |
| Interest Income | 8.92M | 3.97M | 333.7K | 319.56K | 237.93K |
| Interest Expense | 23.15M | 17.15M | 16.5M | 13.83M | 13.34M |
| Other Income/Expense | -18.18M | -21.42M | 18.23M | 14.54M | 109.08M |
| Pretax Income | 774.58M | 631.32M | 537.98M | 410.2M | 255.26M |
| Pretax Margin % | 5.34% | 5.17% | 5.21% | 4.41% | 3.32% |
| Income Tax | 213.52M | 175.16M | 119.35M | 164.86M | 77.23M |
| Effective Tax Rate % | 27.57% | 27.74% | 22.18% | 40.19% | 30.26% |
| Net Income | 563.5M | 456.17M | 418.63M | 245.34M | 178.03M |
| Net Margin % | 3.88% | 3.74% | 4.05% | 2.64% | 2.32% |
| Net Income Growth % | - | 8.97% | 70.63% | 37.81% | - |
| Net Income (Continuing) | 561.04M | 456.17M | 418.63M | 245.34M | 178.03M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 21.54 | 18.82 | 15.79 | 9.38 | 6.72 |
| EPS Growth % | - | 19.19% | 68.34% | 39.58% | - |
| EPS (Basic) | - | 18.82 | 15.79 | 9.38 | 6.72 |
| Diluted Shares Outstanding | 26.16M | 25.19M | 26.51M | 26.51M | 26.51M |
| Basic Shares Outstanding | 26.16M | 25.19M | 26.51M | 26.51M | 26.51M |
| Dividend Payout Ratio | - | - | - | - | - |
Operating margin volatility
As evidenced by the quarterly financial data, LFS exhibits significant revenue fluctuations, with a notable 45.6% contraction in 2025Q4 followed by periods of inconsistent growth, suggesting that the company's reliance on municipal contracts may be creating lumpy revenue recognition patterns that complicate long-term performance forecasting.
The erratic revenue trajectory suggests that the company's core business may be subject to the timing of government contract renewals rather than steady organic growth. Investors should monitor whether these swings represent genuine operational instability or merely the accounting treatment of large-scale, multi-year service agreements.
Based on reported income statements, LFS maintains a gross margin profile hovering near 29.55%, yet operating margins have shown extreme sensitivity, dropping as low as 0.7% in 2024Q2, which indicates that the company struggles to maintain profitability when faced with elevated administrative or facility-related overhead costs.
The thin operating margins suggest that the company lacks significant pricing power to offset rising service delivery costs. This structural weakness implies that any increase in labor or utility expenses could rapidly erode net income, leaving little room for operational error.
According to the provided quarterly figures, operating income does not consistently scale with gross profit, as evidenced by the 2024Q2 period where a $1.2 billion gross profit resulted in a meager $34.4 million operating income, highlighting a lack of efficiency in managing fixed operating expenses.
The inability to convert gross profit into operating income at a consistent rate suggests that the company's SG&A structure is highly rigid. This lack of operating leverage may indicate that the firm is forced to maintain high staffing levels regardless of immediate revenue fluctuations.
As reported in financial statements, LFS's net income has experienced dramatic swings, ranging from $45 million to $394.8 million within the same fiscal year, which suggests that reported earnings are heavily influenced by non-operating items or irregular cost recognition rather than stable core business performance.
The wide variance in net income relative to revenue suggests that investors should be cautious when relying on EPS as a measure of sustainable profitability. The absence of stock-based compensation is a positive indicator of earnings purity, yet the underlying volatility warrants further investigation into non-recurring charges.
Based on an analysis of the income statement, the primary risk to the LFS narrative is the potential for permanent margin compression, as the company's high fixed-cost base appears unable to absorb the impact of Japan's tightening labor market and rising utility costs for its facilities.
Short-sellers would likely focus on the company's inability to maintain consistent operating margins during periods of revenue growth. This suggests that the current business model may be fundamentally over-leveraged toward physical infrastructure, making it vulnerable to any sustained increase in operational expenditures.
Quick answers to the most common questions about buying LFS stock.
For fiscal year 2025, LEIFRAS Co., Ltd. American Depositary Shares (LFS) reported total revenue of $12.20B. This represents a 58.7% increase compared to $7.69B in 2022.
LEIFRAS Co., Ltd. American Depositary Shares (LFS) is profitable, generating $456.2M in net income for the fiscal year ending 2025 with a net profit margin of 3.7%.
LEIFRAS Co., Ltd. American Depositary Shares (LFS) reported an operating income of $652.7M, resulting in an operating profit margin of 5.3%. This margin reflects the operational efficiency of the business before interest and taxes.
LEIFRAS Co., Ltd. American Depositary Shares (LFS) generated $3.61B in gross profit for the year, representing a gross profit margin of 29.5%. This demonstrates the company's core pricing power and production efficiency.