Don Quijote Holdings
First Quarter Results for June 2015
NNovemberb 5th5th, 2014

0Earnings Summary, First Quarter of FY2015
Consolidated((Millions of yyen))

3 months to Sep. 2014
Actual3 months to Sep. 2013

Share

YoY

ActualShare

Net sales

163,861

100.0%

111.8%

146,514100.0%

Gross profit

44,23527.0%

110.9%

39,88027.2%

SGA

33,77920.6%

113.6%

29,74020.3%

Operating profit

10,4566.4%

103.1%

10,140

6.9%

Recurring profit

10,822

6.6%

103.7%

10,433

7.1%

Net profit

6,141

3.7%

95.7%

6,416

4.4%

EPS(Yen)

78.29

-

95.1%

82.33

-

• Total sales jumped by 11.8%, SSS were up 2.8% as we enjoyed food sales growth by taking the market share from otherretailers including GMS. This is because we took the leadership in price competition in the industry after the consumption
tax-hike.
• GPM for this Q1 was 27.0%, reached the high level, though it was down 0.2 points from a year ago due to two reasons.
-The total sales led by daily commodities as food sales surged year-over-year.
-GPM for previous Q1 marked the high level of 27.2%.
p 0.3 ppoints as we made the upfront
pinvestment,, mainly
y labor cost,, for the future new store• SGA ratio to the sales went uprollout.
OP grew and beat our estimate driven by sales growth. Although the bottom line was down 4.3%, it was above our estimate.
Copyright (c) 2014 Don Quijote Holdings Co.,Ltd. All rights reserved.

1

Existing Stores (Don Quijote store format)
120.0%= Customer traffic= All stores= Customer spending= Existing stores

115.0%

110.0%

105.0%

100.0%

95.0%

90.0%
2012Mar.

Existing stores2012
Sep.

2013 JulJul.

2013
Mar.

2013
Sep.

Aug
Aug.

Sep
Sep.

Oct
Oct.

Nov
Nov.

Dec
Dec.

2014 JanJan.

2014
Mar.

2014
Sep.

Feb
Feb.

Mar
Mar.

Apr
Apr.

May

Jun
Jun.

Jul

Aug
Aug.

Sep
Sep.

Sales

99.5%

101.8%

99.4%

100.0%

100.0%

99.1%

98.7%

97.7%

116.7%

95.5%

100.7%

99.5%

101.4%

102.3%

105.0%

Customer traffic

100.0%

101.1%

97.5%

99.6%

99.9%

99.5%

99.5%

97.6%

105.7%

97.3%

102.4%

100.9%

101.7%

100.6%

103.5%

Customer spending

99.5%

100.6%

102.0%

100.4%

100.1%

99.5%99.2%

100.1%

110.4%

98.2%

98.4%

98.6%

99.8%

101.7%

101.5%

Existing store No.
No

184

185

185

186

187

189

192

191

193

195

195

194

196

196

196

• Don Quijote SSS were up 2.8% because of more customer traffic (up 1.9%) and more customer spending (up 0.9%)
even though
g the bad weather ggave us negativeg
impact. Private brand and value-added items were assorted to attract
new customer base from other retailers. It made per-customer spending up.

Copyright (c) 2014 Don Quijote Holdings Co.,Ltd. All rights reserved.

2Sales Breakdown of Products Category : FY2015 1Q
Consolidated(Millions of yen)

3 months to Sep. 2014
ActualShare

YoY

3 months to Sep. 2013
ActualShare

Home electrical appliances

12,8847.9%

100.5%

12,816

8.7%

Miscellaneous household goods

36,01122.0%

109.5%

32,872

22.4%

Foods

48,773,29.8%

119.0%

40,998,28.0%

Watches & fashion merchandise

34,09920.8%

104.5%

32,632

22.3%

Sporting goods & leisure goods

11,2086.8%

104.9%

10,685

7.3%

Oth products
Otherd t

15 02415,0249 1%
9.1%

135 4%
135.4%

11 09711,097

7 6%
7.6%

Total retail store business

157,999

96.4%

112.0%

141,100

96.3%

Rent income

4 448
4,448

2 7%
2.7%

108 9%
108.9%

4 086
4,086

2 8%
2.8%

Other business

1,414

0.9%

106.5%

1,328

0.9%

163,861

100.0%

111.8%

146,514100.0%

Total• Foods grew its sales by 19.0% year-over-year thanks to successful pricing strategy and product mix.
“Processed foods” e.g. snacks and noodles “Daily delivered foods” e.g. eggs and tofu ”Beverages” are the contributors.
• Miscellaneous household ggoods ggrew 9.6% yyear-over-year
ybacked byy the strong
g foreign
g tourists’ demand toward cosmetics
and drugs as well as daily necessities like hair care products.
• Luxuries and durables are on the recovery track with smaller negative impact from pre tax-hike last-minute demand.
Copyright (c) 2014 Don Quijote Holdings Co.,Ltd. All rights reserved.

3

Number of stores(Number of stores)
Don QuijoteMEGANew MEGAOthers

165
35
2131

174
372830FY2015-1Q
172
373132

Domestic store opening
Domestic store closure
Net store increase

1631322517633Overseas

31414255

283286Total

FY2013

FY2014• 6 new stores opened in Q1: 3 Don Quijote, 2 New MEGA , 1 small store format.
• 3 stores closed in DQ including temporal suspension.
• New store openings are ongoing in line with our expectation so far. Having stores in properties that were formally occupied
by other retailers, is our main way. We’re securing human resources including senior-citizen part-time staff in an agile
manner.
Copyright (c) 2014 Don Quijote Holdings Co.,Ltd. All rights reserved.

4Key Components of SG&A Expenses : FY2015 1Q
Consolidated(Millions of yen)

3 months to Sep. 2014
ActualShare

YoY

3 months to Sep. 2013
ActualShareNet sales

163,861

100.0%

111.8%

146,514100.0%

Salary allowance

11,980

7.3%

117.0%

10,242

7.0%

R t
Rent

4 544
4,544

2 8%
2.8%

106 0%
106.0%

4 287
4,287

2 9%
2.9%

Commission paid

3,661

2.2%

106.3%

3,444

2.4%

Depreciation and amortization

2,608

1.6%

117.9%

2,212

1.5%

Others

10,9866.7%

115.0%

9,555

6.5%

SGA

33,77920.6%

113.6%

29,740

20.3%• SGA ratio to the sales stood at 20.6%, slightly increased year-over-year. It was affected by initial cost* burden associatedwith new store openings, more work required with sales mix change, and the consolidation of MARUKAI, the U.S. subsidiary.
*Salary allowance, Depreciation & Amortization, Fixings, etc.

• Stronger sales promotion with our original e-money ”majica” to push up the traffic for further sales growth. Personnel cost,
mainly salary allowance went up year-over-year. This is because of the fact that we secured human resources in advance
to be ready for the aggressive new store openings in Q2 and onwards.
Copyright (c) 2014 Don Quijote Holdings Co.,Ltd. All rights reserved.

5

Sales, Profit and Loss by Segment : FY2015 1Q（Millions of yen）

Sales, profit and loss by segment from Jul. 1, 2014, to Sep. 30, 2014
Consolidated
Sales to external customers

Retail storeSegment profit

Others

Total

Adjusted amount

Consolidated

157,999

4,448

1,414

163,861-

163,861

-

3,587

1,329

4,916

-4,916-

157,999

8,035

2,743

168,777-4,916

163,861

6,486

2,853

1,190

10,529-73

10,456

Internal sales or transfers
between segments
Total

Rent income（Millions of yen）

Sales, profit and loss by segment from Jul. 1, 2013, to Sep. 30, 2013
Consolidated
Sales to external customers
Internal sales or transfersb tbetweensegmentst
Total
Segment profit

Retail store

Rent income

Others

Total

Adjusted amount

Consolidated

141,100

4,086

1,328

146,514-

146,514

-

731

694

1,425

-1,425
1,425-

141,100

4,817

2,022

147,939-1,425

146,514

8,291

1,236

582

10,1093110,140• Q1 segment profit in the retail business was 6.5 billion yen which is our mainstay.
• Q1 segment profit in the tenant leasing business was 2.9 billion yen.
• Q1 segment profit in other business was 1.2 billion.

Copyright (c) 2014 Don Quijote Holdings Co.,Ltd. All rights reserved.

6

Balance Sheet

Consolidated
T t l currentt assets
Totalt（Millions of yen）
As of Sep. 30, Change from
2014
Jun. 30, 2014
151 211
151,211-7,623
7 623

Consolidated
T t l currentt liabilities
Totalli biliti（Millions of yen）
As of Sep. 30, Change from
2014
Jun. 30, 2014
109 399
109,399-5,045
5 045

Cash and deposits

31,115-11,575

Accounts payable

54,716-402

Inventories

91,884

2,779

Short-term liabilities*

22,506

2,562

282,694

9,393

Total noncurrent liabilities

126,671

2,144

220,624

7,901

Long-term bonds

43,410-890

Buildings

81,384

4,306

Long-term borrowings

27,766-2,264Land

124,230

4,550

Long-term payables under fluidity
lease receivables

39,312

4,967

15,37721

Total liabilities

236,070-2,901

6,244-88

Net assets

197,835

4,671

Total investments and other assets

46,693

1,471

192,070

4,433

Lease and guarantee deposits

30 89030,890-73
73

6 220
6,220

401

433,905

1,770

433,905

1,770

Total noncurrent assets
Total property, plant and equipment

Total intangible assets
Goodwill

Total assets

Total shareholders' equity

Mi it iinterests
Minoritytt
Liabilities and net assets* Short-term liabilities = Short-term loans payable + Current portion of long-term loans payable + Current portion of bonds• Cash & deposits amounted to 31.1 billion yen, 11.6 billion less than the end of last year. This is due to the upfront investment
for the store network expansion as well as the hold-down of financing except the one had done by liquidizing claims.
• Inventories stood at 91.9 billion yen, 2.8 billion more than the end of last year with 6 new stores as well as the accumulation
based on the robust sales trend.
trend• Payables under fluidity lease receivables were 46.3 billion yen, up 6 billion, with financing through ABL.
Copyright (c) 2014 Don Quijote Holdings Co.,Ltd. All rights reserved.

7

Cash Flows and Capital Expenditures（Millions of yen）

Consolidated Cash FlowsC h and
Cashd equivalents
i l t att bbeginningi i off periodi dCash flows from operating activitiies
Cash flows from investing activities
C h flCashflows ffrom fi
financingi activities
ti iti
Net increase (decrease) in cash and equivalents
Cash and equivalents at end of period

3 months to Sep.
2014

3 months to Sep.
2013

44,10544
105
1,324-16,6092 976
2,976-12,291
31,81436,132
36
132
7,160-11,176
1 182
1,182-2,661
33,4713 months to Sep.
2014

3 months to Sep.
2013

14,7876,819-7,968

8,692
6,986-1,706

Cash flows*
Net increase (decrease)

7,973
7973
-5,836-5,433
1 794
1,794-9,630-1,657（Millions of yen）

Consolidated Capital Expenditures
Capital expenditures

ChangeChange6,095-167-6,262*C
Cashh flflows = N
Nett iincome + D
Depreciationi ti andd amortization
ti ti + E
Extraordinarytdilloss - Di
Dividend
id d• Cash outflows in investment CF exceeded cash inflows in operating CF. It was impacted by the acquisition of tangible fixed
assets as much as 14.8 billion yen for new stores, aiming at further growth.
• 3 billion yen of cash inflows in financial CF largely due to 7.5 billion yen income from rent claims liquidation intending
diversified financing.
• Capex stood at 14.8 billion yen, mainly in Japan Asset Marketing and Don Quijote.
Copyright (c) 2014 Don Quijote Holdings Co.,Ltd. All rights reserved.

8

Company Forecast : FY2015 (June 2015)
Consolidated(Millions of yen)

FY2015 1H Revised forecast
Plan

Share

YoY

FY2015 1H Latest forecast
Plan

Share

FY2015 Forecast
ActualShareNet sales

331,000

100.0%

109.1%

323,000

100.0%

634,000

100.0%

Gross profit

88,50026.7%

109.2%

85,30026.4%

167,800

26.5%

SGA

67,80020.5%

111.9%

65,50020.3%

133,000

21.0%

Operating profit

20,700

6.3%

101.0%

19,8006.1%

34,800

5.5%

Recurring profit

21,2006.4%

100.3%

20,2006.3%

35,6005.6%

Net profit

12,500

3.8%

96.0%

12,4003.8%

21,500

3.4%

EPS(Yen)159.45-95.5%

158.18-274.26-

Depreciation

5,300

1.6%

116.5%

5,100

1.6%

10,5001.7%• First half forecast revised upward. Sales : up 8 billion yen, OP : up 900 million, RP : up 1 billion, against our initial forecast.
• Don Quijote SSS forecast goes as follows. Full year : flat year-over-year, 1H : +1.0%, 2H : -1.1%• 25-30 new store openings per annum with 35 billion yen of capex.

Copyright (c) 2014 Don Quijote Holdings Co.,Ltd. All rights reserved.

9