Cash conversion efficiency is severely compromised, evidenced by a $235.4M free cash flow deficit in 2025Q4 despite the reported $992.1M in net income.
Tokyo Lifestyle Co., Ltd. (TKLF) cash flow statement — 7-year operating, investing & financing cash flows
| Metric | TTM | Mar'25 | Mar'24 | Mar'23 | Mar'22 | Mar'21 | Mar'20 | Mar'19 |
|---|
| Cash from Operations | -10.4M | -616.07K | 1.91M | -25.74M | -7.01M | -3.37M | -7.65M | -15.63M |
| Operating CF Margin % | - | -0.29% | 0.98% | -15.16% | -2.98% | -1.5% | -5.48% | -16.2% |
| Operating CF Growth % | -226.62% | -132.22% | 107.43% | -267.39% | -107.66% | 55.9% | 51.04% | - |
| Net Income | 11.3M | 6.83M | 7.48M | -8.05M | 3.92M | 4.95M | 3.25M | 3.21M |
| Depreciation & Amortization | 7.92M | 3.09M | 2.93M | 3.01M | 3.6M | 2.98M | 1.47M | 918.93K |
| Stock-Based Compensation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | -982.73K | -982.73K | -1.77M | 646.21M | 0 | -234.36K | -182.14K | 0 |
| Other Non-Cash Items | 46.56M | 2.02M | 3.71M | -637.32M | -5.37M | -186.94K | -564.69K | 97.45K |
| Working Capital Changes | -76.73M | -11.57M | -10.44M | -29.59M | -9.16M | -10.89M | -11.62M | -19.85M |
| Change in Receivables | -69.06M | -362K | -13.12M | -77.36M | 7.84M | -10.15M | -10.48M | -13.57M |
| Change in Inventory | 7.39M | -13.99K | 2.34M | 21.29M | -6.05M | -5.34M | -1.14M | -3.76M |
| Change in Payables | 3.03M | 3.03M | 14.04M | 5.16M | 0 | 7.85M | 1.07M | 833 |
| Cash from Investing | 12.61K | -992.1K | 2.71M | -743.27K | -3.11M | 1.78M | -3.31M | -4.68M |
| Capital Expenditures | -2.55M | -1.02M | -929.31K | -934.96K | -3.04M | -2.94M | -3.41M | -2.38M |
| CapEx % of Revenue | 0.49% | 0.49% | 0.47% | 0.55% | 1.29% | 1.31% | 2.45% | 2.46% |
| Acquisitions | -20.63K | -20.63K | 2.95M | 2.96K | 0 | -348.12K | 1.28M | 0 |
| Investments | - | - | - | - | - | - | - | - |
| Other Investing | 2.59M | 49.31K | 691.26K | 188.73K | -67.43K | 5.07M | -1.18M | -2.31M |
| Cash from Financing | 11.82M | 4.08M | -1.78M | 12.75M | 13.76M | 11.04M | 16.15M | 19.74M |
| Debt Issued (Net) | 9.09M | 4.07M | -4.61M | 15.48M | 15.04M | 1.8M | -11.53M | 19.71M |
| Equity Issued (Net) | 3.79M | 30.34K | 3.73M | 23 | 0 | 1.45M | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -1.06M | -15.79K | -901.72K | -2.74M | -1.28M | 7.8M | 27.68M | 22.57K |
| Net Change in Cash | 4.88M | 2.41M | 709.1K | -16.5M | 1.42M | 9.31M | 5.27M | -695.7K |
| Free Cash Flow | -15M | -1.64M | 982.65K | -26.67M | -10.04M | -6.18M | -11.06M | -18M |
| FCF Margin % | -2.87% | -0.78% | 0.5% | -15.72% | -4.28% | -2.75% | -7.93% | -18.66% |
| FCF Growth % | -25.21% | -266.58% | 103.68% | -165.58% | -62.61% | 44.18% | 38.54% | - |
| FCF per Share | -35.43 | -3.88 | 0.26 | -7.36 | -2.77 | -1.67 | -4.14 | -6.74 |
| FCF Conversion (FCF/Net Income) | -1.33x | -0.09x | 0.26x | 3.20x | -1.79x | -0.68x | -1.56x | -4.87x |
| Interest Paid | 1.91M | 1.07M | 798.35K | 1.11M | 873.15K | 853.35K | 1.07M | 0 |
| Taxes Paid | 4.21M | 4.21M | 880.31K | 433.9K | 0 | 323.07M | 279.88M | 0 |
Quick answers to the most common questions about buying TKLF stock.
Tokyo Lifestyle Co., Ltd. (TKLF) generated $-0.6M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Tokyo Lifestyle Co., Ltd. (TKLF) reported negative free cash flow of $1.6M in 2025, indicating capital requirements exceeded cash from operations.
Tokyo Lifestyle Co., Ltd. (TKLF) spent $1.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
Key Metrics
Top Statement Risk
Working capital liquidity volatility
Earnings Quality Remains Highly Disconnected
As reported in recent financial statements, TKLF's operating cash flow frequently diverges from net income, evidenced by a 2025Q4 net income of $992.1M against a negative $87.6M in operating cash flow, suggesting that reported profits are not currently translating into tangible liquidity for the firm.
The persistent gap between accounting profits and cash generation suggests that TKLF's earnings quality is low, likely driven by non-cash accruals or aggressive revenue recognition policies. Investors should monitor whether this disconnect is a temporary byproduct of rapid scaling or a structural inability to convert sales into cash.
Free Cash Flow Trajectory Deteriorating
Based on the provided cash flow data, TKLF's free cash flow has turned sharply negative in recent periods, culminating in a $235.4M outflow in 2025Q4, which highlights a concerning inability to sustain positive cash generation despite the company's reported top-line expansion and aggressive international growth strategy.
The negative FCF margins indicate that the company is consuming capital at an unsustainable rate to support its operations. This trend warrants further investigation into whether the current business model requires permanent external financing to maintain its footprint in the competitive J-Beauty export market.
Working Capital Management Strains Liquidity
According to historical cash flow filings, TKLF's working capital dynamics have become increasingly volatile, with a massive $1.7B outflow in 2025Q4 alone, suggesting that the company is struggling to manage its inventory cycles and collection processes effectively amidst its recent, rapid revenue growth phase.
The significant cash absorption within working capital implies that the company may be over-extending its inventory positions or facing delays in collecting receivables from its wholesale partners. This pattern suggests that the company's cash conversion cycle is currently inefficient and potentially vulnerable to any slowdown in trade.
Capital Intensity Remains Relatively Low
As indicated by the company's financial disclosures, TKLF maintains a low capital intensity, with CapEx to revenue ratios consistently below 2.1% over the last ten quarters, suggesting that the business model is not inherently asset-heavy despite the recent, massive spike in reported operational scale and activity.
While the low capital intensity is a positive feature for a distributor, the recent increase in absolute CapEx spending in 2025Q4 may indicate a shift toward building out more permanent logistics infrastructure. Analysts should monitor if this spending is truly growth-oriented or merely a response to operational inefficiencies.