Don Quijote Holdings Co., Ltd.
Q1 Results for FY 2019
Earnings Results
July 1, 2018 - September 30, 2018
November 6, 2018

Earnings summary for Q1
Consolidated(Millions of yen)

3 months to September 2018

3 months to September 2017

ActualShare

YoY

ActualShare

Net sales

250,080

100.0%

111.9%

223,433

100.0%

Gross profit

66,73226.7%

112.6%

59,268

26.5%

SGA

52,22920.9%116.1%

44,968

20.1%

Operating profit

14,5035.8%

101.4%

14,300

6.4%

Recurring profit

17,9177.2%

125.3%

14,301

6.4%

Profit attributable toowners of parent11,646

4.7%

137.6%

8,465

3.8%

EPS(Yen)

73.62–137.6%53.52- Net sales made YoY growth of 11.9% despite the fact that bad weather and natural disasters happened one after another.
The consolidation of QSI (24 supermarkets in Hawaii) contributed to the sales growth.
The same store sales went up by 1.6% (0.1ppt:Domestic, 1.5ppt:Tax-free) on top of the last-year’s high bar of 5.6% growth.
We flexibly and swiftly dealt with emergencies and boosted customer loyalty as we played an important role as retail infrastructure
for each community.
 GPM went up by 0.2%. Non-food items and summer seasonal goods were contributors while there were competitive prices
for daily necessities to take the lead of price wars.
 On SGA side, personnel cost increased by 16.2% to prepare for the upcoming new store rollouts as well as to deal withemergencies such as heavy rain and earthquake. Rent, utility, repair expenses rose in addition to the increase of amortization of goodwill.
 Operating and net profit grew by 1.4% and 37.6% respectively. 2.5 billion yen of equity income mostly from UNY boosted
the bottom line growth.

1Same-Store Sales
110.0%SameStore
Sales

Average
Spending

Customer
Traffic

105.0%

100.0%

95.0%
2016
Jul.

2016
Sep.

2017
Mar.

2017
Sep.

2018
Mar.

2018
Sep.

Existing stores

2017
Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

2018
Jan.

Feb.

Mar.

Apr.

May.

Jun.

Jul.

Aug.

Sep.

Sales (%)

105.2

105.1

106.4

102.6

105.9

104.0

103.0

103.6

105.2

103.1

101.6

104.4

100.0

101.4

103.5

Customer traffic (%)

104.0

104.2

105.5

100.2

105.4

103.0

101.3

101.3

102.5

101.1

99.4

100.9

98.999.9

98.6

Customer spending (%)

101.1

100.9

100.9

102.4

100.5

100.9

101.6

102.3

102.6

101.9

102.2

103.5

101.2

101.5

105.0

Existing store count265269271274275

277

278

278278280

283

283288291283

 DQ SSS went up 1.6% (0.1pts came from domestic and 1.5pts from tax-free). Traffic went down 0.9% due mainly to bad
weather. Per-customer spending went up 2.5% for Q1.
 SSS made a satisfying growth in spite of consecutive natural disasters and last-year’s high bar.

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Sales breakdown by product category
Consolidated(Millions of yen)Home electrical appliances
Miscellaneous household goods
Foods

Watches & fashion merchandiseSporting goods & leisure goods
Other products
Overseas

Total retail store business
Rent income
Other businessTotal

3 months to September 2018

3 months to September 2017

ActualShare

YoY

ActualShare

19,40557,232
81,14341,491
15,821
6,654
20,957
242,703
5,480
1,897
250,080

7.8%
22.9%
32.4%
16.6%
6.3%
2.7%
8.4%
97.1%
2.2%
0.8%
100.0%

105.4%
107.3%
110.8%
103.6%
100.1%
97.5%
237.7%
112.1%
104.7%
111.4%
111.9%

18,41853,35673,23140,05115,803
6,822
8,817
216,498
5,232
1,703
223,433

8.2%
23.9%
32.8%
17.9%
7.1%
3.1%
3.9%
96.9%
2.3%
0.8%
100.0%

Home appliances: Wireless headsets became very popular. Seasonal appliances such as fans and flashlights and batteries were strong.
The launch of new devices boosted the smartphone accessories.

Household goods: Seasonal items such as sunscreen as well as daily consumables took the lead.
Cosmetics and pharmaceutical items grew rapidly as those were must-buy items for overseas travelers.

Foods: Processed food including seasonings and snacks, and daily delivered food were the two biggest earners.
Record high temperature encouraged the sales for drinks and ice creams.

Watches & Fashion: Strong sales for E-cigarettes and their parts led this category. Casual wear and rain wear were robust.

Sports & Leisure: Bad weather affected outdoor and sporting goods. Sunshade for cars and bathing goods such as swimsuits were good.

3

The number of stores(Number of stores)

FY2016FY2017FY2018

FY2019-1QDon Quijote

194198

209

212

MEGA

3940

4343

New MEGA557280

81

Others39444749

Total stores in Japan

327354379

385

Overseas14143939

Global Total

341

368

418

424

Domestic opening

40

3255

7

Domestic closure

555

1Net increase

35

2750

6

 7 new stores were opened in FY2019 Q1 : 3 Don Quijote, 1 New MEGA and 3 small format stores.
 1 store ( Doit ) closed for improving operational efficiency.

4Key components in SG&A for Q1
Consolidated(Millions of yen)

3 months to September 2018

3 months to September 2017

ActualShare

YoY

ActualShare

Net sales

250,080

100.0%

111.9%

223,433

100.0%

Salary allowance

19,4257.8%

116.2%

16,718

7.5%

Rent

7,453

3.0%

112.9%

6,602

3.0%

Commission paid

6,033

2.4%

107.9%

5,593

2.5%

Depreciation andamortization

3,669

1.5%

109.8%

3,343

1.5%

Others15,6486.3%

123.1%

12,712

5.7%

SG&A

52,22920.9%116.1%

44,96820.1%

 Personnel cost increased to deal with emergencies and to prepare for upcoming new store rollouts.
 SG&A increased by 16.1% year-over-year.

5Sales and profit by business
Sales, profit and loss by segment from Jul.1, 2018, to Sep.30, 2018
Consolidated

Retail store

Rent income

Others

Total(Millions of yen)

Adjusted
amountConsolidated

Sales to external customers

242,703

5,480

1,897

250,080-

250,080

Internal sales or transfers
between segments

149

5,772

2,298

8,219

(8,219)-

Total

242,852

11,252

4,195

258,299(8,219)250,080

Segment profit

8,151

4,374

1,862

14,387116

14,503

Sales, profit and loss by segment from Jul.1, 2017, to Sep.30, 2017
Consolidated

Retail store

Rent income

Others

Total(Millions of yen)

Adjusted
amountConsolidated

Sales to external customers

216,498

5,232

1,703

223,433-

223,433

Internal sales or transfers
between segments

245

5,295

2,256

7,796

(7,796)-Total

216,743

10,527

3,959

231,229(7,796)

223,433

Segment profit

8,847

4,321

1,067

14,23565

14,300 Profit in the retail business was 8.2 billion yen which is our mainstay.
 Profit in the tenant leasing business was 4.4 billion yen.
 Profit in other business was 1.9 billion yen.

6Balance Sheet(Millions of yen)

Consolidated

As of September Change from30,2018
June 30, 2018

(Millions of yen)

Consolidated

Total current assets

288,808

52,195

Total current liabilities

Cash and deposits

119,40747,434Merchandise

137,142

1,361

Total noncurrent assets

582,904

12,739Total noncurrent liabilities

Total property, plan and equipment

363,536

15,623Long-term bonds

Buildings

146,725

13,310Long-term borrowings

Land

193,518

4,652

Total intangible assets

28,969722

Goodwill

17,917317

Total investments and other assets
Lease and guarantee deposits

Total assets

190,399 (3,606)

As of September Change from30,2018
June 30, 2018

182,695

10,809Accounts payable

97,752

4,722

Short-term liabilities*

29,477

8,073

375,905

53,50890,166(1,108)

255,777

55,10910,272(1,832)

Total liabilities

558,600

64,317

Net assets

313,112617

Total shareholders’ equity

293,176

1,839

Long-term payables under fluidity
lease receivables

46,272(222)

Non-controlling interests

19,211(2,576)

871,71264,934

Liabilities and net assets

871,71264,934* Short-term liabilities = Short-term loans payable + Current portion of long-term loans payable + Current portion of bonds

 Cash & deposits : We financed long-term borrowing from financial institutions to implement aggressive growth strategies.
 Merchandise: Inventory investment for low-turnover products such as luxuries were minimized.

 Payables associated with the liquidation of receivables : 17.6 billion yen.

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Cash flows and Capital expenditure(Millions of yen)

Consolidated Cash Flows

3 months toSeptember 2018

Cash and equivalents at beginning of period
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in cash and equivalents
Cash and equivalents at end of period

75,833
14,603(14,623)
49,591
49,999125,882

3 months to
September 201778,094
12,385(28,267)
94,726
79,268157,362

Change(2,211)
2,218
13,644(45,135)(29,269)(31,480)(Millions of yen)

Consolidated Capital Expenditures
Capital expenditures
Cash flows*
Net increase (decrease)

3 months to
September 201815,53011,323(4,207)3 months to
September 2017

11,8378,555(3,283)

Change3,693
2,768(924)* Cash flows = Net income + Depreciation and amortization + Extraordinary loss - Dividend Cash flow from operating activities was 14.6 billion yen positive. Positive factors :17.6 billion yen of income before income
taxes, 4.4 billion yen of depreciation and amortization. Negative factors : 1.1 billion yen increase in inventory and 8.3 billion
yen for corporate tax payment.
 Cash flow from financing activities was 49.6 billion yen positive mainly due to 62 billion yen of net increase of long-termloans, 4.3 billion yen of dividend payment.

 Capex was 15.5 billion yen. (DQ: 10.3 bil, Nagasakiya: 0.9 bil, JAM: 4.1 bil). Free Cash Flow was 4.2 billion yen negative.

8Forecast for 1H of June 2019
Consolidated(Millions of yen)

FY2018 1H Forecast(Announced Aug.10,2018)

FY2019 1H Revised Forecast
Plan

Share

YoYPlanShare

Net sales

512,000

100.0%

110.6%

503,000

100.0%

Gross profit

135,000

26.4%

112.3%

131,800

26.2%

SGA

105,000

20.5%

115.5%

102,300

20.3%

Operating profit

30,0005.9%

102.6%

29,500

5.9%

Recurring profit

35,0006.8%

112.7%

32,400

6.4%

Net profit

21,5004.2%

115.1%

19,5003.9%

EPS (Yen)

135.91―

115.1%

123.27―

Depreciation

7,600

1.5%

111.1%

7,600

1.5%

 1H forecast：512 billion yen, OP :30 billion yen, RP：35 billion yen, NP：21.5 billion. All items were revised upward from
FY19 1H forecast that was announced on August 10, 2018.
 Don Quijote SSS forecast : DQ SSS forecast :+1.3% in 1H ＋1.0％ in 2H and +1.1% for full year.

 UNY Co., Ltd will be consolidated in January 2019. Full year forecast for FY 2019 will be announced on February 5
when 1H results will be disclosed.

9