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Gunze (TSE:3002) Stock Rebound Meets Dividend Strain And Rich Valuation

Simply Wall St · 2d ago

Gunze stock came into this earnings print already on a strong run, up about 15% over the past three months, and trading on a rich trailing P/E of 28.2x. The company has now put a sharper spotlight on that valuation. Earnings over the past year grew 44.2% and net profit margin sits at 3.6%, which is an improvement on the recent trend, yet the shares also screen above a discounted cash flow value of ¥3,213.21 and carry a 5.19% dividend that current earnings and free cash flow do not fully cover.

Love Gunze's 44.2% earnings growth and 5.19% dividend but concerned about the stretched 28.2x P/E and coverage risk? Take a look at our list of solid balance sheet and fundamentals stocks (40 results).

Q1 2027 Earnings Summary

  • Revenue (Q1 2027 vs. Q1 2026): ¥31,367 million vs. ¥32,240 million (modest year on year decline in quarterly sales)
  • Net Income, Excl. Extra Items (Q1 2027 vs. Q1 2026): ¥2,640 million vs. a loss of ¥1,473 million (return to profit at the quarterly level)
  • Basic EPS (Q1 2027 vs. Q1 2026): ¥84.22 vs. a loss of ¥45.36 (significant improvement in earnings per share for the quarter)
  • Net Income, Excl. Extra Items TTM (Q1 2027 vs. Q1 2026): ¥4,622 million vs. ¥3,206 million (earnings increase of approximately 44.2% over the trailing twelve months)

Prefer clean charts instead of reviewing large sets of raw numbers and text blocks? Get a full visual view of Gunze that highlights its valuation in an easy-to-use dashboard format through our company report for Gunze.

TSE:3002 Trailing 12-Month Earnings & Revenue History as at Aug 2026
TSE:3002 Trailing 12-Month Earnings & Revenue History as at Aug 2026

Gunze earnings support a cautiously optimistic view

For investors leaning positive on Gunze as a steady, diversified operator, the latest figures give some support. Revenue in Q1 2027 is slightly below Q1 2026, yet profit has swung from a quarterly loss to ¥2,640 million with basic EPS moving from a loss to ¥84.22. Trailing twelve month earnings are ¥4,622 million and have grown 44.2%. That combination of higher profitability and a return to earnings stability fits a thesis that the business mix can generate more consistent profits even if top line progress is modest for now.

Gunze risks remain visible despite profit rebound

The more cautious view on Gunze also finds evidence in these results. Quarterly revenue is lower than a year ago, which raises questions about how resilient the apparel and materials portfolio is. Net margin of 3.6% leaves limited room for error if sales soften further. The dividend yield of 5.19% is attractive on paper, yet current earnings and free cash flow do not fully cover it. That keeps payout sustainability and capital allocation firmly on the risk list, even as profitability improves.

Scan Gunze's dividend coverage and margin pressure to see if these issues are just the start by reviewing our risk analysis for Gunze which shows 1 important warning sign.

Take Control of Your Next Move

If Gunze's mix of 44.2% earnings growth, a 5.19% dividend and a 28.2x P/E has your attention, register for free with Simply Wall St and add it to a Watchlist to track its share price against fair value and watch for a potential entry point. After buying or adding to a position, use the Portfolio Command Center to cut through noise and focus on the most important updates to your holdings. For broader context around Gunze and similar stocks, turn to the Community to see how other investors are thinking about the same risks and opportunities. By spotting catalysts and pressure points early, you can act with more confidence and stay ahead of the market.

Curious About Alternatives Beyond Gunze

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.