22-05-2025
MEDIROM Healthcare Technologies Inc (MRM) Q4 2024 Earnings Call Highlights: Strong Revenue ...
Total Revenue: Increased by 21.5% to JPY52.7 million.
Cost of Revenue Ratio: Decreased from 77% in 2023 to 72.9% in 2024.
SG&A Expenses: Increased by 14.3%.
Net Income: Increased by 20.1% to JPY0.9 million.
Cash Flow from Operating Activities: JPY8.5 million.
Cash Flow from Investing Activities: JPY2.3 million.
Cash Flow from Financing Activities: JPY7.6 million.
Adjusted EBITDA: Improved to JPY2.7 million.
Adjusted EBITDA Margin: Improved to 5%.
Net Cash and Cash Equivalents: Increased by JPY1.4 million.
Average Revenue per Customer: Grew by 3.9%.
Number of Salon Locations: Increased to 60 from 38 in the previous year.
Warning! GuruFocus has detected 7 Warning Signs with MRM.
Release Date: May 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Total revenue increased by 21.5% due to higher sales of salons and outsourcing revenues.
Net income rose by 20.1%, driven by gains from sales of loans and tax asset valuation allowances.
Adjusted EBITDA improved to JPY2.7 million with a margin increase to 5%.
Average revenue per customer grew by 3.9%, indicating enhanced customer engagement.
Expansion in the digital preventive healthcare segment with the upgraded LAB application and Mother bracelet.
Cost of revenue increased by 15.1% due to salon purchase-back transactions.
SG&A expenses rose by 14.3%, attributed to higher professional fees and recruiting expenses.
Impairment loss recorded due to expected salon closures in 2025.
Increased reliance on short-term and long-term bank loans for financing activities.
Potential risks associated with global expansion and franchising plans.
Q: Can you provide an overview of Medirom's financial performance in 2024? A: Fumitoshi Fujiwara, Chief Financial Officer, reported that total revenue increased by 21.5% to JPY52.7 million, driven by increased sales of salons and store operations outsourcing revenues. The cost of revenue ratio decreased from 77% in 2023 to 72.9% in 2024. Net income rose by 20.1% to JPY0.9 million, primarily due to gains from sales of loans and tax asset valuation allowances.
Q: What were the key drivers of cash flow in 2024? A: Cash flow from operating activities was JPY8.5 million, mainly due to decreased accrued expenses and reclassification of PCs. Cash flow from investing activities was JPY2.3 million, attributed to proceeds from salon sales. Cash flow from financing activities was JPY7.6 million, driven by proceeds from stock issuance and loans.
Q: What are Medirom's strategic plans for 2025? A: The company plans to increase the number of salons, particularly those at spa facilities, and grow its digital preventive health segment. They aim to expand the user base for their LAB application and accelerate production of the Mother bracelet. Global expansion opportunities and cost-cutting measures at salons are also part of the strategy.
Q: How does Medirom plan to enhance its digital preventive healthcare segment? A: Medirom intends to grow this segment by increasing the number of users accessing the specific health guidance program through their LAB application. They also plan to expand the billing user base for the app and accelerate production of the Mother bracelet for corporate clients.
Q: What are the company's plans regarding global expansion? A: Medirom is considering global expansion opportunities, particularly through franchising or partnership options for its salon business and a B2B2C distribution model for the Mother bracelet.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
