New Risk • Jul 13
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 5.6% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 5.6% per year for the foreseeable future. Minor Risks Paying a dividend despite having no free cash flows. Market cap is less than US$100m (JP¥8.92b market cap, or US$55.1m). Reported Earnings • Jul 13
Third quarter 2026 earnings released: EPS: JP¥23.58 (vs JP¥4.24 in 3Q 2025) Third quarter 2026 results: EPS: JP¥23.58 (up from JP¥4.24 in 3Q 2025). Revenue: JP¥16.7b (up 7.6% from 3Q 2025). Net income: JP¥313.0m (up 459% from 3Q 2025). Profit margin: 1.9% (up from 0.4% in 3Q 2025). The increase in margin was driven by higher revenue. Revenue is forecast to stay flat during the next 2 years compared to a 6.3% growth forecast for the Multiline Retail industry in Japan. Over the last 3 years on average, earnings per share has increased by 33% per year but the company’s share price has only increased by 2% per year, which means it is significantly lagging earnings growth. Reported Earnings • Apr 11
Second quarter 2026 earnings released: EPS: JP¥22.68 (vs JP¥26.15 in 2Q 2025) Second quarter 2026 results: EPS: JP¥22.68 (down from JP¥26.15 in 2Q 2025). Revenue: JP¥15.9b (up 2.9% from 2Q 2025). Net income: JP¥301.0m (down 13% from 2Q 2025). Profit margin: 1.9% (down from 2.2% in 2Q 2025). The decrease in margin was driven by higher expenses. Revenue is forecast to stay flat during the next 2 years compared to a 5.8% growth forecast for the Multiline Retail industry in Japan. Over the last 3 years on average, earnings per share has increased by 27% per year but the company’s share price has fallen by 4% per year, which means it is significantly lagging earnings. Upcoming Dividend • Feb 19
Upcoming dividend of JP¥7.50 per share Eligible shareholders must have bought the stock before 26 February 2026. Payment date: 15 May 2026. Payout ratio is a comfortable 23% but the company is not cash flow positive. Trailing yield: 3.0%. Lower than top quartile of Japanese dividend payers (3.4%). Higher than average of industry peers (1.3%). Reported Earnings • Jan 10
First quarter 2026 earnings released: EPS: JP¥14.66 (vs JP¥14.51 in 1Q 2025) First quarter 2026 results: EPS: JP¥14.66 (up from JP¥14.51 in 1Q 2025). Revenue: JP¥15.4b (up 2.4% from 1Q 2025). Net income: JP¥194.0m (up 1.6% from 1Q 2025). Profit margin: 1.3% (in line with 1Q 2025). Revenue is forecast to stay flat during the next 2 years compared to a 5.0% growth forecast for the Multiline Retail industry in Japan. Over the last 3 years on average, earnings per share has increased by 21% per year but the company’s share price has fallen by 1% per year, which means it is significantly lagging earnings. Reported Earnings • Oct 11
Full year 2025 earnings released: EPS: JP¥65.95 (vs JP¥68.44 in FY 2024) Full year 2025 results: EPS: JP¥65.95 (down from JP¥68.44 in FY 2024). Revenue: JP¥61.6b (flat on FY 2024). Net income: JP¥870.0m (down 3.8% from FY 2024). Profit margin: 1.4% (in line with FY 2024). Over the last 3 years on average, earnings per share has increased by 16% per year but the company’s share price has only increased by 1% per year, which means it is significantly lagging earnings growth. Duyuru • Oct 10
Watts Co., Ltd., Annual General Meeting, Nov 26, 2025 Watts Co., Ltd., Annual General Meeting, Nov 26, 2025. Upcoming Dividend • Aug 21
Upcoming dividend of JP¥7.50 per share Eligible shareholders must have bought the stock before 28 August 2025. Payment date: 28 November 2025. Payout ratio is a comfortable 40% and this is well supported by cash flows. Trailing yield: 2.2%. Lower than top quartile of Japanese dividend payers (3.7%). Higher than average of industry peers (1.2%). Duyuru • Aug 01
Watts Co., Ltd. to Report Fiscal Year 2025 Results on Oct 10, 2025 Watts Co., Ltd. announced that they will report fiscal year 2025 results on Oct 10, 2025 Reported Earnings • Jul 14
Third quarter 2025 earnings released: EPS: JP¥4.24 (vs JP¥24.62 in 3Q 2024) Third quarter 2025 results: EPS: JP¥4.24 (down from JP¥24.62 in 3Q 2024). Revenue: JP¥15.5b (up 1.3% from 3Q 2024). Net income: JP¥56.0m (down 83% from 3Q 2024). Profit margin: 0.4% (down from 2.1% in 3Q 2024). The decrease in margin was driven by higher expenses. Revenue is forecast to grow 1.1% p.a. on average during the next 2 years, compared to a 5.7% growth forecast for the Multiline Retail industry in Japan. Over the last 3 years on average, earnings per share has increased by 16% per year but the company’s share price has fallen by 2% per year, which means it is significantly lagging earnings. Reported Earnings • Apr 11
Second quarter 2025 earnings released: EPS: JP¥26.15 (vs JP¥26.26 in 2Q 2024) Second quarter 2025 results: EPS: JP¥26.15 (down from JP¥26.26 in 2Q 2024). Revenue: JP¥15.5b (flat on 2Q 2024). Net income: JP¥345.0m (flat on 2Q 2024). Profit margin: 2.2% (in line with 2Q 2024). Over the last 3 years on average, earnings per share has increased by 17% per year but the company’s share price has fallen by 2% per year, which means it is significantly lagging earnings. New Risk • Jan 15
New major risk - Revenue and earnings growth Earnings have declined by 0.1% per year over the past 5 years. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are declining over an extended period, then in most cases the share price will decline over time unless the company can turn around its fortunes. A trend of falling earnings can be very difficult to turn around. If the company is well already established it may also be a sign the company has matured and is in decline. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings have declined by 0.1% per year over the past 5 years. Minor Risks Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Market cap is less than US$100m (JP¥8.92b market cap, or US$56.8m). Reported Earnings • Jan 15
First quarter 2025 earnings released: EPS: JP¥14.51 (vs JP¥6.75 in 1Q 2024) First quarter 2025 results: EPS: JP¥14.51 (up from JP¥6.75 in 1Q 2024). Revenue: JP¥15.0b (up 1.2% from 1Q 2024). Net income: JP¥191.0m (up 112% from 1Q 2024). Profit margin: 1.3% (up from 0.6% in 1Q 2024). Over the last 3 years on average, earnings per share has increased by 9% per year but the company’s share price has remained flat, which means it is significantly lagging earnings. Duyuru • Oct 10
Watts Co., Ltd., Annual General Meeting, Nov 27, 2024 Watts Co., Ltd., Annual General Meeting, Nov 27, 2024. Upcoming Dividend • Aug 22
Upcoming dividend of JP¥15.00 per share Eligible shareholders must have bought the stock before 29 August 2024. Payment date: 29 November 2024. Payout ratio is a comfortable 28% but the company is not cash flow positive. Trailing yield: 2.0%. Lower than top quartile of Japanese dividend payers (3.7%). Higher than average of industry peers (1.6%). Duyuru • Aug 02
Watts Co., Ltd. to Report Fiscal Year 2024 Results on Oct 10, 2024 Watts Co., Ltd. announced that they will report fiscal year 2024 results on Oct 10, 2024 Reported Earnings • Jul 12
Third quarter 2024 earnings released: EPS: JP¥24.62 (vs JP¥1.03 in 3Q 2023) Third quarter 2024 results: EPS: JP¥24.62 (up from JP¥1.03 in 3Q 2023). Revenue: JP¥15.3b (up 3.1% from 3Q 2023). Net income: JP¥324.0m (up JP¥310.0m from 3Q 2023). Profit margin: 2.1% (up from 0.1% in 3Q 2023). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has fallen by 32% per year but the company’s share price has only fallen by 7% per year, which means it has not declined as severely as earnings. New Risk • May 01
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Japanese stocks, typically moving 5.8% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Minor Risks Paying a dividend despite having no free cash flows. Share price has been volatile over the past 3 months (5.8% average weekly change). Large one-off items impacting financial results. Profit margins are more than 30% lower than last year (0.7% net profit margin). Market cap is less than US$100m (JP¥9.20b market cap, or US$58.3m). Reported Earnings • Apr 11
Second quarter 2024 earnings released: EPS: JP¥26.26 (vs JP¥5.67 in 2Q 2023) Second quarter 2024 results: EPS: JP¥26.26 (up from JP¥5.67 in 2Q 2023). Revenue: JP¥15.4b (up 4.0% from 2Q 2023). Net income: JP¥346.0m (up 349% from 2Q 2023). Profit margin: 2.2% (up from 0.5% in 2Q 2023). Over the last 3 years on average, earnings per share has fallen by 42% per year but the company’s share price has only fallen by 8% per year, which means it has not declined as severely as earnings. Valuation Update With 7 Day Price Move • Mar 29
Investor sentiment improves as stock rises 19% After last week's 19% share price gain to JP¥768, the stock trades at a trailing P/E ratio of 78.6x. Average trailing P/E is 20x in the Multiline Retail industry in Japan. Total loss to shareholders of 10% over the past three years. Reported Earnings • Jan 14
First quarter 2024 earnings released: EPS: JP¥6.75 (vs JP¥15.84 in 1Q 2023) First quarter 2024 results: EPS: JP¥6.75 (down from JP¥15.84 in 1Q 2023). Revenue: JP¥14.8b (flat on 1Q 2023). Net income: JP¥90.0m (down 58% from 1Q 2023). Profit margin: 0.6% (down from 1.5% in 1Q 2023). Over the last 3 years on average, earnings per share has fallen by 43% per year but the company’s share price has only fallen by 13% per year, which means it has not declined as severely as earnings. Duyuru • Oct 12
Watts Co., Ltd., Annual General Meeting, Nov 28, 2023 Watts Co., Ltd., Annual General Meeting, Nov 28, 2023. New Risk • Oct 11
New minor risk - Profit margin trend The company's profit margins are lower than last year and have reduced by more than 30%. Net profit margin: 0.4% Last year net profit margin: 1.3% This is considered a minor risk. A large drop in profit margin could indicate the company does not have strong competitive advantages or it is yet to establish itself and its core business. Even if it is a well established business, this may make it a much riskier investment than one that has a combination of proven competitive advantages and a stable or growing profit margin. Currently, the following risks have been identified for the company: Minor Risks Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Large one-off items impacting financial results. Profit margins are more than 30% lower than last year (0.4% net profit margin). Market cap is less than US$100m (JP¥7.80b market cap, or US$52.5m). Upcoming Dividend • Aug 23
Upcoming dividend of JP¥15.00 per share at 2.4% yield Eligible shareholders must have bought the stock before 30 August 2023. Payment date: 28 November 2023. Payout ratio is a comfortable 36% and this is well supported by cash flows. Trailing yield: 2.4%. Lower than top quartile of Japanese dividend payers (3.5%). Higher than average of industry peers (1.2%). Duyuru • Aug 03
Watts Co., Ltd. to Report Fiscal Year 2023 Results on Oct 10, 2023 Watts Co., Ltd. announced that they will report fiscal year 2023 results on Oct 10, 2023 Reported Earnings • Jul 13
Third quarter 2023 earnings released: EPS: JP¥1.03 (vs JP¥11.56 in 3Q 2022) Third quarter 2023 results: EPS: JP¥1.03 (down from JP¥11.56 in 3Q 2022). Revenue: JP¥14.9b (flat on 3Q 2022). Net income: JP¥14.0m (down 91% from 3Q 2022). Profit margin: 0.1% (down from 1.0% in 3Q 2022). Over the last 3 years on average, earnings per share has fallen by 11% per year whereas the company’s share price has fallen by 14% per year. Duyuru • Jul 12
Watts Co., Ltd. (TSE:2735) announces an Equity Buyback for 440,000 shares, representing 3.24% for ¥300 million. Watts Co., Ltd. (TSE:2735) announces a share repurchase program. Under the program, the company will repurchase up to 440,000 shares, 3.24% of its issued share capital, for ¥300 million. The company will cancel all the shares repurchased. The purpose of the acquisition and cancellation of treasury stock is to improve capital efficiency and enhance shareholder returns. The program will be valid till March 29, 2024. As of June 30, 2023, the company had 13,580,308 issued shares (excluding treasury stock) and 318,492 shares in treasury. Reported Earnings • Apr 12
Second quarter 2023 earnings released: EPS: JP¥5.67 (vs JP¥13.80 in 2Q 2022) Second quarter 2023 results: EPS: JP¥5.67 (down from JP¥13.80 in 2Q 2022). Revenue: JP¥14.9b (flat on 2Q 2022). Net income: JP¥77.0m (down 59% from 2Q 2022). Profit margin: 0.5% (down from 1.3% in 2Q 2022). Over the last 3 years on average, earnings per share has remained flat but the company’s share price has increased by 6% per year, which means it is well ahead of earnings. Reported Earnings • Jan 14
First quarter 2023 earnings released: EPS: JP¥15.84 (vs JP¥13.06 in 1Q 2022) First quarter 2023 results: EPS: JP¥15.84 (up from JP¥13.06 in 1Q 2022). Revenue: JP¥14.7b (up 7.1% from 1Q 2022). Net income: JP¥215.0m (up 23% from 1Q 2022). Profit margin: 1.5% (up from 1.3% in 1Q 2022). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 14% per year but the company’s share price has only increased by 3% per year, which means it is significantly lagging earnings growth. Board Change • Nov 16
No independent directors No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 5 experienced directors. 4 highly experienced directors. No independent directors (9 non-independent directors). Director Yoshiko Hayashido was the last director to join the board, commencing their role in 2019. The following issues are considered to be risks according to the Simply Wall St Risk Model: Lack of independent directors. Insufficient board refreshment. Duyuru • Oct 13
Watts Co., Ltd., Annual General Meeting, Nov 25, 2022 Watts Co., Ltd., Annual General Meeting, Nov 25, 2022. Reported Earnings • Oct 13
Full year 2022 earnings released: EPS: JP¥57.82 (vs JP¥72.03 in FY 2021) Full year 2022 results: EPS: JP¥57.82 (down from JP¥72.03 in FY 2021). Revenue: JP¥58.3b (up 15% from FY 2021). Net income: JP¥781.0m (down 19% from FY 2021). Profit margin: 1.3% (down from 1.9% in FY 2021). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 26% per year but the company’s share price has only increased by 1% per year, which means it is significantly lagging earnings growth. Upcoming Dividend • Aug 23
Upcoming dividend of JP¥15.00 per share Eligible shareholders must have bought the stock before 30 August 2022. Payment date: 26 November 2022. Payout ratio is a comfortable 62% but the company is not cash flow positive. Trailing yield: 2.0%. Lower than top quartile of Japanese dividend payers (3.6%). Higher than average of industry peers (1.5%). Reported Earnings • Jul 13
Third quarter 2022 earnings released: EPS: JP¥11.56 (vs JP¥15.23 in 3Q 2021) Third quarter 2022 results: EPS: JP¥11.56 (down from JP¥15.23 in 3Q 2021). Revenue: JP¥15.0b (up 18% from 3Q 2021). Net income: JP¥157.0m (down 23% from 3Q 2021). Profit margin: 1.0% (down from 1.6% in 3Q 2021). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 36% per year but the company’s share price has only increased by 2% per year, which means it is significantly lagging earnings growth. Board Change • Apr 27
No independent directors No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 6 experienced directors. 5 highly experienced directors. No independent directors (11 non-independent directors). Manager of Overseas Business Department and Director Masahiro Hirata was the last director to join the board, commencing their role in 2015. The following issues are considered to be risks according to the Simply Wall St Risk Model: Lack of independent directors. Insufficient board refreshment. Reported Earnings • Apr 12
Second quarter 2022 earnings released: EPS: JP¥13.80 (vs JP¥20.38 in 2Q 2021) Second quarter 2022 results: EPS: JP¥13.80 (down from JP¥20.38 in 2Q 2021). Revenue: JP¥14.8b (up 14% from 2Q 2021). Net income: JP¥186.0m (down 32% from 2Q 2021). Profit margin: 1.3% (down from 2.1% in 2Q 2021). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 46% per year but the company’s share price has only increased by 1% per year, which means it is significantly lagging earnings growth. Reported Earnings • Jan 16
First quarter 2022 earnings: Revenues and EPS in line with analyst expectations First quarter 2022 results: EPS: JP¥13.06 (down from JP¥39.33 in 1Q 2021). Revenue: JP¥13.7b (up 8.1% from 1Q 2021). Net income: JP¥175.0m (down 67% from 1Q 2021). Profit margin: 1.3% (down from 4.2% in 1Q 2021). The decrease in margin was driven by higher expenses. Revenue was in line with analyst estimates. Over the last 3 years on average, earnings per share has increased by 50% per year but the company’s share price has fallen by 2% per year, which means it is significantly lagging earnings. Reported Earnings • Oct 13
Full year 2021 earnings released: EPS JP¥72.03 (vs JP¥57.77 in FY 2020) The company reported a decent full year result with improved earnings and profit margins, although revenues were weaker. Full year 2021 results: Revenue: JP¥50.7b (down 4.0% from FY 2020). Net income: JP¥965.0m (up 25% from FY 2020). Profit margin: 1.9% (up from 1.5% in FY 2020). The increase in margin was driven by lower expenses. Over the last 3 years on average, earnings per share has increased by 49% per year but the company’s share price has fallen by 5% per year, which means it is significantly lagging earnings. Upcoming Dividend • Aug 23
Upcoming dividend of JP¥22.00 per share Eligible shareholders must have bought the stock before 30 August 2021. Payment date: 26 November 2021. Trailing yield: 2.4%. Lower than top quartile of Japanese dividend payers (3.1%). Higher than average of industry peers (1.7%). Reported Earnings • Jul 15
Third quarter 2021 earnings released: EPS JP¥15.23 (vs JP¥4.70 in 3Q 2020) The company reported a decent third quarter result with improved earnings and profit margins, although revenues were weaker. Third quarter 2021 results: Revenue: JP¥12.7b (down 6.6% from 3Q 2020). Net income: JP¥204.0m (up 224% from 3Q 2020). Profit margin: 1.6% (up from 0.5% in 3Q 2020). The increase in margin was driven by lower expenses. Over the last 3 years on average, earnings per share has increased by 39% per year but the company’s share price has fallen by 6% per year, which means it is significantly lagging earnings. Reported Earnings • Apr 14
Second quarter 2021 earnings released: EPS JP¥20.38 (vs JP¥24.56 in 2Q 2020) The company reported a poor second quarter result with weaker earnings, revenues and profit margins. Second quarter 2021 results: Revenue: JP¥12.9b (down 2.7% from 2Q 2020). Net income: JP¥273.0m (down 17% from 2Q 2020). Profit margin: 2.1% (down from 2.5% in 2Q 2020). The decrease in margin was driven by lower revenue. Over the last 3 years on average, earnings per share has increased by 20% per year but the company’s share price has fallen by 6% per year, which means it is significantly lagging earnings. Is New 90 Day High Low • Mar 09
New 90-day high: JP¥931 The company is up 13% from its price of JP¥825 on 09 December 2020. The Japanese market is up 7.0% over the last 90 days, indicating the company outperformed over that time. However, its price trend is similar to the Multiline Retail industry, which is also up 13% over the same period. Reported Earnings • Jan 14
First quarter 2021 earnings released: EPS JP¥39.33 The company reported a decent first quarter result with improved earnings and profit margins, although revenues were flat. First quarter 2021 results: Revenue: JP¥12.7b (flat on 1Q 2020). Net income: JP¥527.0m (up 479% from 1Q 2020). Profit margin: 4.2% (up from 0.7% in 1Q 2020). The increase in margin was driven by lower expenses. Over the last 3 years on average, earnings per share has fallen by 2% per year but the company’s share price has fallen by 10% per year, which means it is performing significantly worse than earnings. Is New 90 Day High Low • Jan 12
New 90-day high: JP¥926 The company is up 12% from its price of JP¥826 on 14 October 2020. The Japanese market is also up 12% over the last 90 days, indicating the company’s price trend is similar to the market over that time. However, it outperformed the Multiline Retail industry, which is down 1.0% over the same period. Duyuru • Jan 09
Watts Co., Ltd. to Report Fiscal Year 2021 Results on Oct 12, 2021 Watts Co., Ltd. announced that they will report fiscal year 2021 results on Oct 12, 2021