Summary of Financial Results for the First Quarter of Fiscal Year 2017
(Three Months Ended March 31, 2017)[Japanese GAAP]
April 28, 2017

Company name: SENSHUKAI CO.,LTD.

Stock exchange: Tokyo Stock Exchange, First Section
8165
URL: http://www.senshukai.co.jp
Mr. Hiroyuki Hoshino, President and Representative Director
Mr. Takeshi Naito, Director, Executive Officer, in charge of Corporate Planning
Tel: +81-6-6881-3220
Scheduled date of filing of Quarterly Report: May 12, 2017
Scheduled date of payment of dividend: Preparation of supplementary materials for quarterly financial results: None
Holding of quarterly financial results meeting: None
Stock code:
Representative:
Inquiries:(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the 1st Quarter of 2017 (January 1, 2017 – March 31, 2017)(1) Consolidated operating results (cumulative)(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable toOperating income
Ordinary income
owners of parent

Net sales
Millions of yen%

Millions of yen%

1Q 2017
28,992(5.3)(1,343)
1Q 2016
30,599(1.6)(1,716)
Note: Comprehensive income (millions of yen)
1Q 2017: (798) (- %)Millions of yen-

Net income per share

Diluted net income per share

Yen

Yen

(10.97)(14.09)-1Q 2017
1Q 2016%

Millions of yen(901)(1,222)
1Q 2016: (2,790) (- %)

%

(570)
(735)

-

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

1Q 2017
101,781
51,565
Fiscal Year 2016
101,959
52,572
Reference: Shareholders’ equity (millions of yen) 1Q 2017: 51,509

Net assets per share
%

Yen

50.6
51.5
Fiscal Year 2016: 52,508

990.06
1,009.26

2. Dividends
1Q-endDividend per share
3Q-end2Q-endYen

Yen

Fiscal Year 2016
4.00
Fiscal Year 2017
Fiscal Year 2017 (forecasts)
4.00
Note: Revision to the most recently announced dividend forecast: None

Year-end

Total

Yen

Yen

Yen

-

4.00

8.00

-

4.00

8.00

3. Consolidated Outlook for Fiscal Year 2017 (January 1, 2017 – December 31, 2017)
Net sales
Millions of yen(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable to Net income
Operating income
Ordinary income
owners of parent
per share% Millions of yen% Millions of yen

2Q 2017 (cumulative)
68,900 4.6
350Full Year 2017
135,000 4.6
1,350
13.0
Note: Revision to the most recently announced consolidated outlook: None

750
1,650

% Millions of yen

313.3
(1.4)

500
1,000

%

Yen

208.0
(29.6)

9.61
19.22

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
(2) Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
Note: Please refer to “2. Quarterly Consolidated Financial Statements and Notes, (3) Notes to Quarterly Consolidated
Financial Statements (Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial
Statements)” on page 8 for further information.

(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(4) Number of shares outstanding (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
1Q 2017:

52,230,393 sharesFiscal Year 2016:

52,230,393 sharesFiscal Year 2016:

203,527 shares

2) Number of treasury shares at the end of the period
1Q 2017:

203,654 shares

3) Average number of shares outstanding during the period
1Q 2017:52,026,773 shares

1Q 2016:

52,207,132 shares

Note: The Senshukai stock held by the trust that is recorded as treasury shares under shareholders’ equity is included in thenumber of treasury shares at the end of 1Q 2017 and the end of Fiscal Year 2016, and is deducted from the number ofshares that is used to calculate the average number of shares outstanding during 1Q 2017.
* This quarterly financial report is not subject to audit procedures.
* Cautionary statement with respect to forward-looking statements
The above projections are based on information available at the time of release of this report. Actual results could differ
significantly from these projections due to a variety of factors. For further details regarding the projections, please refer to page3, “1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts
and Other Forward-looking Statements.”

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2017

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income6

Quarterly Consolidated Statement of Income(For the Three-month Period)

6

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)7(3) Notes to Quarterly Consolidated Financial Statements

8(Going Concern Assumption)

8(Significant Changes in Shareholders’ Equity)

8(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)

8(Segment and Other Information)

8(Subsequent Events)

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SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2017

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first quarter (January 1 to March 31) of 2017, the Japanese economy followed an improvement trend in
corporate earnings and the employment situation, against the backdrop of the government’s economic andmonetary policies. However, the economic outlook became increasingly unclear because of concerns over slowing
economic growth overseas and other factors. In Japan’s retail industry, market conditions continued to bechallenging. Consumers sentiment weakened as they were increasingly budget minded.
The Senshukai Group is currently in the fourth year of the medium- to long-term management plan “Innovate for
Smiles 2018” that covers the five-year period ending in 2018. All group companies are focusing their energy onachieving the goals of this plan.
Net sales in the first quarter decreased 5.3% year-over-year to 28,992 million yen. This was mainly because ofsluggish sales of apparel since last year.
Operating loss was 1,343 million yen compared with a loss of 1,716 million yen in the same period of 2016.
Reduction in selling, general and administrative expenses fell short of offsetting the higher cost to sales ratio.
Ordinary loss was 901 million yen compared with a loss of 1,222 million yen in the same period of 2016. Thiswas mainly due to an increase in share of profit of entities accounted for using equity method. Loss attributable toowners of parent was 570 million yen compared with a loss of 735 million yen in the same period of 2016.
Overview by segment(Mail-order Business)
Consolidated sales in the mail-order business, centered on the catalog and the Internet businesses, decreased 8.3%
year-over-year to 24,196 million yen in the first quarter. There was an operating loss of 1,275 million yen
compared with a loss of 1,179 million yen in the same period of 2016.
(Bridal Business)
Consolidated sales in the bridal business, centered on the house wedding business, increased 23.1%
year-over-year to 3,533 million yen in the first quarter. There was an operating loss of 178 million yen comparedwith a loss of 672 million yen in the same period of 2016.
(Corporates Business)
Consolidated sales in the corporates business, which provides products and services to corporations, decreased
11.0% year-over-year to 1,021 million yen in the first quarter, and operating income decreased 16.8% to 133
million yen.
(Others)
Consolidated sales in other businesses, which provides services business (primarily insurance and credit card
services) and a childcare business, increased 26.3% year-over-year to 240 million yen in the first quarter.
Operating loss was 22 million yen compared with a loss of 25 million yen in the same period of 2016.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2017(2) Explanation of Financial Position(Balance sheet position)
Assets totaled 101,781 million yen at the end of the first quarter of 2017, a decrease of 178 million yen from theend of 2016.
Current assets decreased 17 million yen to 52,600 million yen. The main factors were decreases of 1,429 million
yen in accounts receivable-other and 1,308 million yen in cash and deposits, while there were increases of 1,171
million yen in merchandise and finished goods, 844 million yen in other, and 699 million yen in notes andaccounts receivable-trade. Non-current assets decreased 161 million yen to 49,180 million yen. The factors
include decreases of 293 million yen in property, plant and equipment, and 23 million yen in intangible assets,
while there was an increase of 155 million yen in investments and other assets.
Current liabilities decreased 633 million yen to 28,665 million yen. The main factors were decreases of 727
million yen in electronically recorded obligations-operating, 488 million yen in other, and 288 million yen inincome taxes payable, while there was an increase of 881 million yen in accounts payable-trade. Non-current
liabilities increased 1,461 million yen to 21,550 million yen. The main factor was an increase of 1,620 million yen
in long-term loans payable, while there was a decrease of 159 million yen in other.
Net assets decreased 1,006 million yen to 51,565 million yen. The main factors were decreases of 778 million yen
in retained earnings and 163 million yen in deferred gains or losses on hedges. Consequently, the equity ratio was
50.6%.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
Senshukai currently maintains its consolidated forecasts for 2017 that was released on February 2, 2017.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2017

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)
Fiscal Year 2016
(As of Dec. 31, 2016)

1Q 2017(As of Mar. 31, 2017)

AssetsCurrent assets
Cash and deposits

16,605

15,296

Notes and accounts receivable-trade

3,889

4,588

Merchandise and finished goods

20,58021,752

Accounts receivable-other

7,818

6,388

Other

3,877

4,721

Allowance for doubtful accounts

(152)

(147)

52,61852,600

Buildings and structures, net

16,12815,874Land

11,31011,310Total current assets
Non-current assets
Property, plant and equipment

Other, net

2,112

2,072

Total property, plant and equipment

29,551

29,258Intangible assets
Goodwill

2,027

1,973

Other

2,120

2,150

Total intangible assets

4,147

4,124

Investment securities

8,651

9,151

Other

7,256

6,912

Allowance for doubtful accounts

(266)

(266)

Total investments and other assets

15,642

15,797

Investments and other assets

Total non-current assets
Total assets-4-49,341

49,180101,959

101,781SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2017

(Millions of yen)
1Q 2017(As of Mar. 31, 2017)

Fiscal Year 2016
(As of Dec. 31, 2016)
Liabilities
Current liabilities
Electronically recorded obligations-operating

10,365

9,637

Accounts payable-trade

5,840

6,722

Short-term loans payable

1,546

1,479

387

99

Income taxes payable
Provision for sales promotion expenses

437

492

Other

10,721

10,233

Total current liabilities

29,29828,665

Bonds with subscription rights to shares

7,000

7,000

Long-term loans payable

9,300

10,920Net defined benefit liability

98

101

Provision for management board incentive plan trust

97

Non-current liabilities

Other

3,680

3,520

Total non-current liabilities

20,08821,55049,38750,215

Capital stock

22,30422,304

Capital surplus

23,86023,860Retained earnings

12,385

11,606

Treasury shares

(151)

(151)

58,39957,620

1,271

1,179

Total liabilities
Net assets
Shareholders’ equity

Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

(11)

(175)

(6,983)(6,983)Foreign currency translation adjustment

(143)

(107)

Remeasurements of defined benefit plans

(23)

(23)

(5,890)(6,110)

Deferred gains or losses on hedges
Revaluation reserve for land

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

-5-

64

56

52,572

51,565

101,959

101,781SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2017(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income(Quarterly Consolidated Statement of Income)(For the Three-month Period)(Millions of yen)

Net sales
Cost of sales

1Q 2016(Jan. 1, 2016 – Mar. 31, 2016)
30,59916,566

1Q 2017(Jan. 1, 2017 – Mar. 31, 2017)
28,992
15,922Gross profit

14,033

13,070

Selling, general and administrative expenses

15,75014,413Operating loss

(1,716)(1,343)

7
5

6
5

416

428

88
51

65
28

568

534

44
1
28

38
25
28

74

92

(1,222)

(901)

-

18

-

18

0
-

3
18
10

Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodGain on adjustment of account payable
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commission fee
Other
Total non-operating expenses
Ordinary loss
Extraordinary income
Subsidy income
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on reduction of non-current assets
Impairment loss
Total extraordinary losses

032(1,223)(915)

Income taxes

(496)

(336)

Loss

(726)

(578)

Loss before income taxes

Profit (loss) attributable to non-controlling interests
Loss attributable to owners of parent

-6-

9

(7)

(735)

(570)

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2017

(Quarterly Consolidated Statement of Comprehensive Income)(For the Three-month Period)
1Q 2016(Jan. 1, 2016 – Mar. 31, 2016)
Loss(Millions of yen)
1Q 2017(Jan. 1, 2017 – Mar. 31, 2017)

(726)

(578)

(245)

(96)

(1,771)(304)

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land

18-

Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method

(25)

(9)

(39)

190

(2,063)(220)(2,790)(798)(2,799)

(790)

9

(7)

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-7-

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2017(3) Notes to Quarterly Consolidated Financial Statements(Going Concern Assumption)
Not applicable.
(Significant Changes in Shareholders’ Equity)
Not applicable.
(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)(Calculation of tax expense)
The tax expenses are calculated by first reasonably estimating the effective tax rate after the application of tax
effect accounting with respect to profit before income taxes for the fiscal year in which the quarter under review
falls, and multiplying that rate by the profit before income taxes for the quarter under review. However, theCompany uses legally stipulated effective tax rates to calculate tax expenses for cases in which using estimatedtax rates gives a noticeably irrational result.
(Segment and Other Information)
I 1Q 2016 (Jan. 1, 2016 – Mar. 31, 2016)
1. Information related to sales and profit or loss for each reportable segment
Reportable segment

Net sales
Sales to customers
Inter-segment sales
or transfers
Total
Segment profit (loss)

Corporates
Sub-total
business

Others(Note 1)

Total

(Millions of yen)Amounts shown on
Adjustment quarterly consolidated
statement of income(Note 2)
(Note 3)Mail-orderbusiness

Bridalbusiness

26,391

2,869

1,147

30,409190

30,599-30,599

190

-

29

220

0

220

(220)

-

26,581

2,869

1,177

30,629190

30,819(220)

30,599(1,179)

(672)

159

(1,691)(25)(1,716)0(1,716)

Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of theservices business primarily offering insurance and credit card services, and childcare business.
2. The 0 million yen adjustment to segment profit (loss) comprises elimination for inter-segment transactions.
3. Segment profit (loss) is adjusted to be consistent with operating loss shown on the quarterly consolidated statementof income.

2. Information related to impairment of non-current assets, goodwill, etc. for each reportable segment
No major events or changes occurred.
II 1Q 2017 (Jan. 1, 2017 – Mar. 31, 2017)
1. Information related to sales and profit or loss for each reportable segment
Reportable segment
Corporates
Sub-total
business

Others(Note 1)

Total

(Millions of yen)Amounts shown on
Adjustment quarterly consolidated(Note 2)statement of income(Note 3)Mail-orderbusiness

Bridalbusiness

24,196

3,533

1,021

28,751

240

28,992-

28,992

Net sales
Sales to customers
Inter-segment sales
or transfers
Total

217

0

37

254

0

254

(254)

-

24,413

3,533

1,058

29,006240

29,247(254)

28,992

Segment profit (loss)(1,275)

(178)

133

(1,320)(22)(1,343)0(1,343)

Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of theservices business primarily offering insurance and credit card services, and childcare business.
2. The 0 million yen adjustment to segment profit (loss) comprises elimination for inter-segment transactions.
3. Segment profit (loss) is adjusted to be consistent with operating loss shown on the quarterly consolidated statementof income.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2017

2. Information related to impairment of non-current assets, goodwill, etc. for each reportable segment
No major events or changes occurred.
(Subsequent Events)
On April 21, 2017, Senshukai has conducted partial early redemption of the Japanese Yen Convertible Notes with
Stock Acquisition Rights Maturing in 2019, which were issued on April 23, 2014.
1. Notes for early redemption

SENSHUKAI CO.,LTD. Japanese Yen Convertible Notes with Stock
Acquisition Rights Maturing in 2019

2. Date of early redemption

April 21, 2017 (Swiss time)

3. Total amount of early redemption

2,000 million yen

4. Amount of early redemption

100% of the principal amount of the notes

5. Reason for early redemption

Request by holders of the notes for early redemption in accordance withthe provisions of the Terms and Conditions of Issuance

6. Conversion price

1,048 yen

7. Impact on financial results

No effect on Senshukai’s financial results.

8. Source of funds for redemption

Own funds* This financial report is solely a translation of summary of “Kessan Tanshin” (in Japanese, including attachments), which has
been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience ofreaders who prefer an English translation.

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