Don Quijote Holdings. Co., Ltd.

Q3 Results for FY 2018
Earnings Results
July 1, 2017 - March 31, 2018

May 8 ,20180Earnings summary
Consolidated(Millions of yen)

9 months to Mar. 2018
Actual9 months to Mar. 2017

Share

YoY

ActualShare

Net sales

703,156

100.0%

113.4%

619,987

100.0%

Gross profit

180,61525.7%

110.2%

163,905

26.4%

SGA

140,555

20.0%

110.9%

126,767

20.4%

Operating profit

40,0605.7%

107.9%

37,138

6.0%

Recurring profit

43,441

6.2%

120.6%

36,006

5.8%

Profit attributable toowners of parent

27,163

3.9%100.7%

26,977

4.4%

EPS(Yen)171.71-100.7%

170.59-• Consolidated and same store sales went up 13.4% and 4.5% YoY respectively. Strong daily necessities sales such as food andconsumables drove the sales and customer traffic. Tax-free sales for overseas travelers rose 56.7%, beating YoY sales for 42 consecutive
months since the new tax free system was implemented.
Customers chose our stores as their frequent shopping destinations mainly because of our wide assortment and competitive price.
• GPM went down 0.7pts. We successfully increased the customer traffic and the market share by being more price competitive to beatpeer stores. Our sales strategy focused more on securing gross profit than margin.
• SGA went down 0.4pts. Initial cost for new stores and the cost associated with QSI increased. Without newly-consolidated overseas
business, SGA would have gone down by 0.6pts.
• OP went up by 7.9%, Profit attributable to owners of parent was up 0.7%, hit an all-time high profit.
Copyright (c) 2018 Don Quijote Holdings Co.,Ltd. All rights reserved.

1Same-store sales
110.0%= Customer traffic= Customer spending= Existing stores

105.0%

100.0%

95.0%
2015
Sep.

2016
Mar.

Existing stores2017 Jan.

2016
Sep.
May.

2017
Mar.
Aug.

2017
Sep.

2018
Mar.

Feb.

Mar.

Apr.

Jun.

Jul.

Sep.

Oct.

Nov.

Dec.

Feb.

Mar.

Sales

102.6%

102.1%

103.2%

102.1%

102.8%

105.1%

105.2%

105.1%

106.4%

102.6%

105.9%

104.0%

2018 Jan.
103.0%

103.6%

105.2%

Customer traffic

102.7%

101.6%

103.6%

103.1%

102.0%

104.5%

104.0%

104.2%

105.5%

100.2%

105.4%

103.0%

101.3%

101.3%

102.5%

Customer spending

99.9%

100.5%

99.6%

99.0%

100.7%

100.6%

101.1%

100.9%

100.9%

102.4%

100.5%

100.9%

101.6%

102.3%

102.6%

Existing store count244244

245

247

258

258

265

269

271

274

275

277278278

278• DQ SSS went up 4.5% (Tax-free contribution:2.1pts), traffic +3.0% and per-customer average spending +1.5% for the first nine months
period. (July-March)• There were intense competitions between retailers reflecting the difficult consumer sentiment as well as bad weather.
Our product assortment and pricing strategy attracted more customers.
Copyright (c) 2018 Don Quijote Holdings Co.,Ltd. All rights reserved.

2Sales breakdown by product category
Consolidated

9 months to Mar. 2018

(Millions of yen)

ActualShare

9 months to Mar. 2017
YoY

ActualShare

Home electrical appliances

59,9708.5%

112.9%

53,121

8.6%

Miscellaneous household goods

162,48223.1%

121.8%

133,377

21.5%

Foods

232,74533.1%

114.4%

203,394

32.8%

Watches & fashion merchandise

122,15317.4%

100.3%

121,728

19.6%

Sporting goods & leisure goods

42,5496.1%

103.5%

41,1286.6%

Other products

62,2998.8%

133.2%

46,769

7.5%

Total retail store business

682,19897.0%

113.8%

599,517

96.7%

Rent income

15,9142.3%

103.0%

15,450

2.5%

Other business

5,044

0.7%

100.5%

5,020

0.8%

703,156

100.0%

113.4%

619,987

100.0%

Total

Home appliances : 4K TV sets were hit items. Headsets and smartphone accessories went up sharply. Vacuum cleaners were contributors.
Household goods : Cosmetics and drugs were the two largest earners. Consumables including seasonal items were strong.
Foods: All product groups grew rapidly. Processed food like snacks and seasonings, Daily delivered food like eggs, andfresh foods at MEGA stores were popular items.

Watches & Fashion : E-cigarettes and their accessories made a significant growth. Underwear, casual outfits and gloves grew steadily.
Sports & Leisure :Sporting goods such as compressive training T-shirt took the lead in this segment.

Copyright (c) 2018 Don Quijote Holdings Co.,Ltd. All rights reserved.

3

The number of stores(Number of stores)

FY2016FY2017FY2018-1Q

FY2018-2Q

FY2018-3Q

Don Quijote

194198

199

204

206

MEGA

3940404142

New MEGA

5572737778

Others3944444344

Total stores in Japan

327354

356

365

370

Overseas14143738

38

Grand Total

341

368

393

403

408

Domestic opening

40

32

27

125

Domestic closure

55220352725

105

Net increase• 20 new stores opened in 9 months : 10 Don Quijote, 6 New MEGA, 2 MEGA and 1 Kyo-yasu-do in Japan and 1 Don Don
Donki in Singapore. Also, 24 stores were added to our store-count in September due to the acquisition of QSI.
• The number of new stores for FY2018 will be 31.

Copyright (c) 2018 Don Quijote Holdings Co.,Ltd. All rights reserved.

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

9 months to Mar. 2018
Actual9 months to Mar. 2017

Share

YoY

ActualShare

Net sales

703,156

100.0%

113.4%

619,987

100.0%

Salary allowance

52,791

7.5%

109.4%

48,252

7.8%

Rent

20,8463.0%

121.2%

17,201

2.8%

Commission paid

16,5172.3%

117.9%

14,0082.2%

Depreciation and amortization

10,7371.5%

103.7%

10,356

1.7%

Others39,664

5.7%

107.3%

36,9505.9%

SGA

140,555

20.0%

110.9%

126,767

20.4%• SGA to sales ratio went down 0.4 pts to 20.0%. Initial cost for new stores and the cost associated with newly-consolidated
company (QSI) increased. Our measures to change working style to improve productivity have been taken place.
• We enjoyed greater cost-efficiency by having topline growth and more market share.

Copyright (c) 2018 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, 2017, to Mar. 31, 2018Consolidated
Sales to external customers

Retail store

Rent income

Others

Total

Adjusted amount

Consolidated
703,156

682,198

15,914

5,044

703,156-555

16,167

6,777

23,499(23,499)

Total

682,753

32,081

11,821

726,655(23,499)

703,156

Segment profit

22,123

13,340

4,552

40,01545

40,060Internal sales or transfers
between segments（Millions of yen）

Sales, profit and loss by segment from Jul. 1, 2016, to Mar. 31, 2017
Consolidated
Sales to external customers

Retail store

Rent income-Others

Total

Adjusted amount

Consolidated
619,987599,51715,450

5,020

619,987-374

14,8907,081

22,345(22,345)

Total

599,891

30,34012,101

642,332(22,345)619,987

Segment profit

19,673

12,5205,009

37,202(64)37,138Internal sales or transfers
between segmentsz-Profit in the retail business was 22.1 billion yen which is our mainstay.

• Profit in the tenant leasing business was 13.3 billion yen.
• Profit in other business was 4.6 billion.
Copyright (c) 2018 Don Quijote Holdings Co.,Ltd. All rights reserved.

6

Balance Sheet（Millions of yen）
As of Mar. 31,2018

Change fromJun. 30, 2017

Total current liabilities

166,513

1,688(1,819)Accounts payable

93,1597,498

137,168

13,199

Short-term liabilities*

21,895(3,127)546,309

131,026

Total noncurrent liabilities

325,694

127,581

331,475

20,709Long-term bonds

91,874

16,984130,101

11,478Long-term borrowings

200,515

115,877

175,660

4,642

Long-term payables
under fluidity lease receivables

13,930(5,436)29,32813,440Total liabilities

492,207129,269

18,76913,406

Net assets

305,238

25,308

185,506

96,877

Total shareholders' equity

282,095

23,81344,775

4,301

Non-controlling interests

21,353

574

797,445

154,577

Liabilities and net assets

797,445

154,577

As of Mar. 31,
2018

Change fromJun. 30, 2017

Total current assets

251,136

23,551

Cash and deposits

74,521

Merchandise

Consolidated

Total noncurrent assets
Total property, plant and equipment

Buildings
Land
Total intangible assets
Goodwill
Total investments and other assets

Lease and guarantee deposits

Total assets（Millions of yen）
Consolidated* Short-term liabilities = Short-term loans payable + Current portion of long-term loans payable + Current portion of bonds• Cash & deposits : Debt financing was taken place for new stores for this year and onwards, QSI acquisition, and investment forcapital tie-up with UNY.
• Merchandise: Inventory stood at 137.2 billion yen, went up by 16.2% YoY, mainly due to 11.8 billion yen inventory for newstores. Also inventory for QSI stores and the store in Singapore were added.

• Payables associated with the liquidation of receivables : 21.2 billion yen of debt outstanding financed by asset-backed loans.

Copyright (c) 2018 Don Quijote Holdings Co.,Ltd. All rights reserved.

7

Cash flows and Capital expenditure（Millions of yen）

Consolidated Cash Flows
9 months to Mar.
2018
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

78,09425,891(144,716)
119,596375
78,4699 months to Mar.
2018
Cash flows*
Net increase (decrease)44,49642,850(32,634)
21,042
31,37975,875

Change33,598(16,959)(112,082)
98,554(31,004)
2,594（Millions of yen）

Consolidated Capital Expenditures

Capital expenditures

9 months to Mar.
2017

34,53834,054(484)

9 months to Mar.
2017

33,564
34,666
1,102

Change974(612)(1,586)* Cash flows = Net income + Depreciation and amortization + Extraordinary loss - Dividend• Cash flow from operating activities was 25.9 billion yen positive.
Positive factors : 43.3 billion yen of income before income taxes, 12.6 billion yen of depreciation and amortization etc.
Negative factors : 3.1 billion yen of gain from sale of equity affiliate and 5.4 billion yen of increase in trade accounts receivable,
10.3 billion yen of increase in inventory assets, 18.4 billion yen for tax payment.
• Cash flow from financing activities was 119.6 billion yen positive driven by 129.1 billion yen of net increase of long-term borrowings and4.1 billion yen of dividend payment were negative factors.
• Capex was 34.5 billion yen (DQ: 17 bil, Nagasakiya: 2.5 bil, JAM: 23.3 bil). Free cash flow was 500 million yen negative.
Copyright (c) 2018 Don Quijote Holdings Co.,Ltd. All rights reserved.

8

Earnings summary for Q3
Consolidated(Millions of yen)

3 months to Mar. 2018
Actual3 months to Mar. 2017

Share

YoY

ActualShare

Net sales

240,326

100.0%

118.8%

202,293

100.0%

Gross profit

60,43925.1%

113.5%

53,266

26.3%

SGA

49,62620.6%

116.8%

42,471

21.0%

Operating profit

10,8134.5%

100.2%

10,795

5.3%

Recurring profit

12,3835.2%

136.4%

9,078

4.5%

Profit attributableto owners of parent

8,485

3.5%

80.7%

10,518

5.2%

EPS(Yen)

53.64-80.7%66.50-Copyright (c) 2018 Don Quijote Holdings Co.,Ltd. All rights reserved.

9

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

3 months to Mar. 2018
ActualShare

3 months to Mar. 2017
YoY

ActualShare

Home electrical appliances

19,9598.3%

113.2%

17,631

8.7%

Miscellaneous household goods

54,07422.5%

118.6%

45,595

22.5%

Foods

79,18833.0%

114.1%

69,40934.3%

Watches & fashion merchandise

38,31615.9%

106.6%

35,932

17.8%

Sporting goods & leisure goods

11,4704.8%

107.4%

10,684

5.3%

Other products

30,40012.6%

183.7%

16,551

8.2%

Total retail store business

233,40797.1%

119.2%

195,802

96.8%

Rent income

5,228

2.2%

102.5%

5,100

2.5%

Other business

1,691

0.7%

121.6%

1,391

0.7%

240,326

100.0%

118.8%

202,293

100.0%

Total

Copyright (c) 2018 Don Quijote Holdings Co.,Ltd. All rights reserved.

10

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

3 months to Mar. 2018
Actual3 months to Mar. 2017

Share

YoY

ActualShareNet sales

240,326

100.0%

118.8%

202,293

100.0%

Salary allowance

18,7607.8%116.3%

16,128

8.0%

Rent

7,443

3.1%

128.0%

5,814

2.9%

Commission paid

5,352

2.2%

116.8%

4,583

2.3%

Depreciation and amortization

3,896

1.6%

109.3%

3,564

1.7%

Others

14,1755.9%

114.5%

12,382

6.1%

SGA

49,62620.6%

116.8%

42,471

21.0%

Copyright (c) 2018 Don Quijote Holdings Co.,Ltd. All rights reserved.

11

Forecast for fiscal June 2018
Consolidated

FY2018 Revised forecast(Millions of yen)Plan

FY2017 Results

Share

YoY

ActualShare

YoY

Net sales

935,000

100.0%

112.8%

828,798

100.0%

109.1%Gross profit

242,000

25.9%

110.7%

218,580

26.4%

108.3%

SGA

191,000

20.4%

110.8%

172,39520.8%

108.6%

Operating profit

51,0005.5%

110.4%

46,1855.6%

106.9%

Recurring profit

54,0005.8%

118.6%

45,5235.5%

103.9%Net profit

33,3003.6%

100.7%

33,0824.0%

132.7%EPS(Yen)210.51-100.6%

209.18-132.6%

Capital expenditure

45,000-99.2%

45,357-88.0%

Depreciation

14,8001.6%

105.2%

14,0751.7%

105.8%• Full year forecast revised. Net sales up 55 billion, OP up 3 billion, RP up 6 billion and NP up 5.3 billion,
against our initial forecast that was announced on August 15,2017.
• Don Quijote SSS forecast : DQ SSS forecast : +3.5% for full year and +0.6% for Q4.
Copyright (c) 2018 Don Quijote Holdings Co.,Ltd. All rights reserved.

12