Don Quijote Holdings. Co., Ltd.

Q3 Results for FY 2016
Earnings Results
July 1, 2015 - March 31, 2016

May 9 ,2016

0Earnings summary
Consolidated(Millions of yen)

9 months to Mar. 2016
Actual9 months to Mar. 2015

Share

YoY

ActualShare

Net sales

569,547

100.0%

111.7%

509,920100.0%

Gross profit

152,13426.7%

110.6%

137,531

27.0%

SGA

117,19720.6%

112.9%

103,844

20.4%

Operating profit

34,937

6.1%

103.7%

33,687

6.6%

Recurring profit

35,2496.2%

101.3%

34,802

6.8%

Profit attributable toowners of parent

19,732

3.5%98.3%

20,083

3.9%

EPS(Yen)

124.83-97.7%

127.74-• Consolidated and same store sales went up 11.7% and 5.0% YoY respectively. We enjoyed greater sales and traffic despite of stagnant
consumer sentiment and bad weather. Our discount price and varied selection were highly appreciated. There were increasing
number of repeat tourist customers, and we quickly responded to tourists’ changing consumption patterns.
• GPM went down 0.3 pts. The number of repeat customers increased due to our effort to meet their wants and needs. Consumers became
more price conscious which led to greater daily necessities’ sales with low margin and high inventory turnover.
Write-downs of slow-moving inventories are ongoing.
• SGA was in line with our expectation. We increased the headcount more than ever before to deal with greater-than-expected new store
openings and more man-hour triggered by change in sales-mix and growing tourists’ sales. The rise of cost, however, was more thanoffset by the sales growth.
• Sales and OP went up by 5% and 29% respectively against our estimate.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

1Same-store sales
125.0%

120.0%= Customer traffic= All stores= Customer spending= Existing stores

115.0%

110.0%

105.0%

100.0%

95.0%

90.0%

85.0%
2013
Sep.

Existing stores

2014
Mar.

2014
Sep.

2015
Mar.

2015
Sep.

2016
Mar.

2015 Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

2016 Jan.

Feb.

Mar.

Sales

106.7%

109.4%

89.5%

114.2%

108.5%

104.4%

108.1%

107.3%

105.3%

106.8%

102.4%

102.5%

105.9%

105.8%

101.9%

Customer traffic

101.2%

105.6%94.6%

105.3%

103.2%

99.8%

102.0%

101.7%

99.1%

102.8%

98.2%

100.0%

102.0%

102.6%

99.2%

Customer spending

105.4%

103.7%

94.6%

108.5%

105.1%

104.6%

106.0%

105.5%

106.3%

103.9%

104.3%

102.6%

103.9%

103.1%

102.8%

Existing store count

203

204

205

205

207

208

207

209

212

214

216

218

221

220

222

• DQ SSS went up 5.0%, traffic +0.8% and spending +4.2% for nine-month period from July to March.
• We strived with our heart to ensure fair and equitable business practices, and responding to changing consumer sentimentsince August 2015.

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

2

Sales breakdown by product category
9 months to Mar. 2016

Consolidated(Millions of yen)

ActualShare

YoY

9 months to Mar. 2015
ActualShare

Home electrical appliances

46,6638.2%

106.9%

43,6688.6%

Miscellaneous household goods

116,72920.5%

115.6%

100,941

19.8%

Foods

179,25131.5%

116.7%

153,636

30.1%

Watches & fashion merchandise

116,20720.4%

105.0%

110,674

21.7%

Sporting goods & leisure goods

40,0877.0%

112.3%

35,708

7.0%

Other products

50,991

9.0%

107.8%

47,316

9.3%

Total retail store business

549,92896.6%

111.8%

491,943

96.5%

Rent income

14,6902.6%

108.3%

13,568

2.7%

Other business

4,929

0.8%

111.8%

4,409

0.8%

569,547

100.0%

111.7%

509,920100.0%

Total

Home appliances : POSA such as iTune cards contributed a lot. Headsets, refrigerators and washing machines had grown very much.
Household goods : Both cosmetics and drugs had grown by about 30% each, as there were greater tourists’ sales.
Foods: Daily delivered food such as eggs and milk became stronger as being more price competitive.
Also, drinks, processed food, preserved food, rice and condiments achieved high growth.

Watches & Fashion : Although there was a slow domestic consumption toward high-end items, tourists’ sales were robust.
Warm winter decelerated seasonal apparels sales. On the other hand, bags and shoes grew favorably.
Sports & Leisure ： Sales skyrocketed thanks to seasonal event goods such as party costumes. Workout equipments greatly contributed.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

3

The number of stores(Number of stores)

FY2014FY2015FY2016-1Q

FY2016-2Q

FY2016-3QDon Quijote

174183

182184184

MEGA3736363738

New MEGA

2841454850

Others30323436

36

Total stores in Japan

269

292297305

308

Overseas1414141414

Grand Total

283

306

311

319

322

Domestic opening

2233

696

Domestic closure

5101131723

583Net increase• 21 new stores opened during Q3 : 5 Don Quijote, 8 New MEGA, 2 MEGA, 3 Picasso, 2 Kyoyasudo, and 1 Doit.
• 3 stores were closed, 2 stores are temporarily closing for renovation and format conversion.
• Full year store opening plan is up-revised to 39 stores.

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

4

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

9 months to Mar. 2016
ActualShare

YoY

9 months to Mar. 2015
ActualShare

Net sales

569,547

100.0%

111.7%

509,920100.0%

Salary allowance

44,056

7.7%

118.5%

37,1707.3%

Rent

15,4152.7%

109.8%

14,044

2.8%

Commission paid

13,3502.3%

113.9%

11,7222.3%

Depreciation and amortization

9,560

1.7%

113.6%

8,415

1.6%

Others34,815

6.2%

107.1%

32,493

6.4%

SGA

117,19720.6%

112.9%

103,844

20.4%• SGA to sales ratio went down 0.2pts to 20.6%• SGA was in line with our expectation. We increased the headcount more than ever before to deal with greater-than-expected
new store openings and more man-hour triggered by change in sales-mix and growing tourists’ sales.
The rise of cost, however, was more than offset by the sales growth.

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

5Sales and profit by business（Millions of yen）

Sales, profit and loss by segment from Jul. 1, 2015, to Mar. 31, 2016
Consolidated

Retail store

Rent income

549,928

14,691

4,928

11

13,322

Total

549,939

Segment profit

19,673

Sales to external customers
Internal sales or transfers
between segments

Others

Total

Adjusted amount

Consolidated

569,547-

569,547

5,947

19,280(19,280)-

28,013

10,875588,827(19,280)

569,547

10,6384,870

35,181(244)34,937（Millions of yen）

Sales, profit and loss by segment from Jul. 1, 2014, to Mar. 31, 2015
Consolidated
Sales to external customers

Retail store

Rent income

491,943

13,568

4,409

11,573

Internal sales or transfers
between segments-Others

Total

Adjusted amount

Consolidated

509,920-509,920

4,567

16,140(16,140)-

Total

491,943

25,141

8,976

526,060(16,140)

509,920

Segment profit

20,605

9,393

3,947

33,945(258)

33,687z

Profit in the retail business was 19.7 billion yen which is our mainstay.

• Profit in the tenant leasing business was 10.6 billion yen.
• Profit in other business was 4.9 billion.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

6

Balance Sheet（Millions of yen）
As of Mar. 31, Change from2016
Jun. 30, 2015
203,730
27,749Consolidated
Total current assets

Consolidated
Total current liabilities（Millions of yen）
As of Mar. 31, Change from2016
Jun. 30, 2015
149,608
5,032

Cash and deposits

61,703

11,986

Accounts payable

69,824

9,268

Merchandise

109,214

14,634

Short-term liabilities*

35,925(2,673)357,276

27,591

Total noncurrent liabilities

170,991

31,268285,375

23,248Long-term bonds

77,271

14,581

Buildings

105,047

9,026

Long-term borrowings

46,036

20,880Land

162,458

11,811Long-term payables
under fluidity lease receivables

28,673(5,350)17,335(194)

Total liabilities

320,599

36,300

7,097

(312)

Net assets

240,407

19,04054,566

4,537

Total shareholders' equity

226,575

16,89333,512695

Non-controlling interests

12,015

3,002

561,006

55,340Liabilities and net assets

561,006

55,340Total noncurrent assets
Total property, plant and equipment

Total intangible assets
Goodwill
Total investments and other assets

Lease and guarantee deposits

Total assets* Short-term liabilities = Short-term loans payable + Current portion of long-term loans payable + Current portion of bonds• Cash & deposits : Aggressive new store openings were financed through debt by issuing 20 billion yen straight bond in addition tobank borrowings.
• Merchandise: It increased by 14.6 billion yen. More inventories had secured for record number of new stores andstrong existing stores to avoid opportunity losses.

• Payables associated with the liquidation of receivables : 35.8 billion yen was financed by asset-backed loans.

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

7

Cash flows and Capital expenditure（Millions of yen）

Consolidated Cash Flows
9 months to Mar.
2016
Cash and equivalents at beginning of period
Cash flows from operating activitiies
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in cash and equivalents
Cash and equivalents at end of period

9 months to Mar.
2015

51,29225,156(35,826)
23,49812,24963,541

44,10524,434(41,317)22,501
6,539
50,6449 months to Mar.
2016
Cash flows*
Net increase (decrease)

7,187
722
5,491
997
5,710
12,897（Millions of yen）

Consolidated Capital Expenditures

Capital expenditures

Change9 months to Mar.
2015

34,94927,219(7,730)41,00727,440(13,567)

Change(6,058)
221
5,837

* Cash flows = Net income + Depreciation and amortization + Extraordinary loss - Dividend• Cash flow from operating activities was 25.2 billion yen positive.
Positive factors : 34.3 billion yen of income before income taxes and minority interests, 10.9 billion yen of depreciation and amortization,
9.3 billion yen increase in trade payables. Negative factor : 14.6 billion yen increase in inventory, 16.7 billion yen for tax payment.
• Cash flow from financing activities was 23.5 billion yen positive driven by 21.9 billion yen of net increase in long term loans and 8.3
billion yen of net increase of bonds. 5.7 billion yen of repayments of payables under fluidity lease receivables and 3.2 billion yen ofdividend payment were negative factors.
• Capex was 34.9 billion yen, free cash flow was negative 7.7 billion yen due to aggressive new store openings.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

8

Earnings summary for Q3
Consolidated(Millions of yen)

3 months to Mar. 2016
Actual3 months to Mar. 2015

Share

YoY

ActualShare

Net sales

185,102100.0%

110.4%

167,696

100.0%

Gross profit

49,192

26.6%

107.2%

45,897

27.3%

SGA

39,82621.5%

111.8%

35,621

21.2%

Operating profit

9,366

5.1%

91.1%

10,276

6.1%

Recurring profit

9,376

5.1%

87.2%

10,758

6.4%

Profit attributableto owners of parent

5,499

3.0%

86.1%

6,389

3.8%

EPS(Yen)

34.78

-

85.8%

40.53

-

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

9

Sales breakdown by product category for Q3
Consolidated(Millions of yen)

3 months to Mar. 2016
ActualShare

YoY

3 months to Mar. 2015
ActualShare

Home electrical appliances

15,4498.4%

107.2%

14,412

8.6%

Miscellaneous household goods

38,39520.7%

115.9%

33,124

19.8%

Foods

60,80032.9%

116.8%

52,03331.0%

Watches & fashion merchandise

35,91719.4%

102.9%

34,908

20.8%

Sporting goods & leisure goods

10,1885.5%

102.3%

9,963

5.9%

Other products

17,7709.6%

103.7%

17,142

10.2%

Total retail store business

178,51996.4%

110.5%

161,582

96.4%

Rent income

4,953

2.5%

107.8%

4,596

2.7%

Other business

1,630

0.9%

107.4%

1,518

0.9%

185,102100.0%

110.4%

167,696

100.0%

Total

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

10

Key components in SG&A for Q3
Consolidated(Millions of yen)

3 months to Mar. 2016
ActualShareYoY

3 months to Mar. 2015
ActualShareNet sales

185,102100.0%

110.4%

167,696

100.0%

Salary allowance

15,1368.2%

117.9%

12,839

7.7%

Rent

5,178

2.8%

106.2%

4,874

2.9%

Commission paid

4,535

2.5%

115.4%

3,931

2.3%

Depreciation and amortization

3,411

1.8%

112.0%

3,045

1.8%

Others

11,5666.2%

105.8%

10,932

6.5%

SGA

39,82621.5%

111.8%

35,621

21.2%

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

11Full year forecast for fiscal June 2016
FY2016 Forecast

Consolidated(Millions of yen)

PlanFY2015 Results

Share

YoY

Plan

Share

YoY

Net sales

750,000

100.0%

109.7%

683,981100.0%

111.7%

Gross profit

200,000

26.7%

110.0%

181,74126.6%

112.9%

SGA

159,000

21.2%

111.5%

142,63820.9%

112.6%

Operating profit

41,0005.5%

104.9%

39,1035.7%

114.0%

Recurring profit

41,5005.5%

103.3%

40,1605.9%

113.2%Net profit

23,4003.1%

101.1%

23,1483.4%

107.8%EPS(Yen)147.99-100.6%

147.09-107.1%

Capital expenditure

44,000-83.4%

52,727-148.3%

Depreciation

13,1001.7%

112.2%

11,672

1.7%

112.2%• Full year forecast : 750 billion yen, OP : 41 billion, RP : 41.5 billion, NP : 23.4 billion.
• Don Quijote SSS forecast : +3.7% YoY for full year, flat for Q4.

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

12