Financial Results for Q2 of FYE May 2024
(June 1, 2023 to November 30, 2023)
January 11, 2024
The earnings forecasts in this document are based on the business environment as of the time of writing. Actual results
may differ from projections due to a variety of factors. Note also that inquiries should be submitted in Japanese.
Inquiries: Hironori Abe or Ryota Kimura (hdinfo@create-sd.co.jp), Corporate Planning Office.

1

Consolidated Results for H1 of FYE May 2024
1. Consolidated Financial Highlights

2. Consolidated Statement of Income
3. Consolidated Balance Sheet4. Store Openings/Closings
5. Performance Highlights

FYE May 2024 Full Year Plan
1. Store Openings/Closings

2. FYE May 2024 Full Year Plan
3. Sustainability Management

Issuance of Share Options through Third-Party Allotment
Using Treasury Shares
1. Purpose of Fundraising and Use of Funds

2

Results for H1 of FYE May 20243

1. Consolidated Financial Highlights

Consolidated results for H1 of FYE May 2024
Net sales

Ordinary profit

207.4 billion yen

10.1 billion yen(110.7% YoY)(107.8% YoY)
Percentage of sales: 4.9%

<Business Overview>◆Existing store sales and customer numbers remained strong due tosuccess of EDLP measures◆Gross profit exceeded plan thanks to sales growth despite decline ingross profit margin◆SG&A expenses were kept within plan, ensuring increase in sales andprofit
42. Consolidated Statement of Income for H1 of FYE May 2024
Net sales exceeded previous H1’s level and projections, and SG&A
expenses stayed within plan, ensuring increase in sales and profit
FYE May 2024
H1 Results

FYE May 2023
H1 Results(Millions of yen)

Share(%)(Millions of yen)

Share(%)

YoYchange(%)

Net sales

Gross profit

187,392
50,989

100.0

27.2

207,451
53,965

100.0

26.0

110.7

105.8

Net sales
ELDP measures succeeded as they didin H1 of FYE May 2023, especially fordaily necessities, on top of increased
Vs plan opportunities to go out with(%)
reclassification of COVID-19 as Class 5(%)
disease105.1 Gross profit

101.9

・Reactionary drop in high gross profit
products such as masks anddisinfecting products
・Impact from promotion of EDLP

SG&A expenses

41,75422.3

44,113

21.3

105.7

99.0

⇒ Percentage of sales: –1.2 pts from H1of FYE May 2023

Operating profit

9,235

4.9

9,852

4.7

106.7

116.7

SG&A expenses

Ordinary profit
Profit attributableto owners of parent

9,451
6,412

5.0

3.4

10,191
6,875

4.9

3.3

107.8

107.2

116.9

115.9

Despite personnel unit costs and utility
expenses remaining high, overall
SG&A expenses were kept withinplan at 99.0%⇒ Percentage of sales: –1.0 pt from H1of FYE May 2023

5

3. Consolidated Balance Sheet for H1 of FYE May 2024
May 31, 2023
Total assets
194,941

Nov. 30, 2024
Total assets
203,023+8,082

Total
Current liabilities
assets78,532
99,631

Noncurrent
assets95,310Total net
assets
116,409

Total
Current liabilities
assets81,41598,148+2,883–1,482

Noncurrent
assets104,874+9,564

Total net
assets(Millions of yen)

■ Current assets –1,482
Decrease in cash and deposits–3,487

Increase in accounts receivable+632

Increase in merchandise+1,534■ Non-current assets +9,564
Land purchases and deposits+3,272

Buildings and structures+3,725■ Total liabilities +2,883
Increase in accounts payable+1,461

121,607+5,198■ Total net assets +5,198
Retained earnings+5,1686

3. Store Openings/Closings■ Store openings/closings and renovations
No. of store openings in H1Kanagawaof FYE May 2024
Drug stores
Storeopening Prescription drugstores

Store closings: 3 drug stores (2 after completion ofcontract and 1 to improve management efficiency)

Tokyo

Shizuoka

Chiba

Aichi

OtherAnnual

72

14

20

16

8

2

26

10

19

・Renovations: 15 stores (revised merchandising: 9 stores; follow-up after prescription drug store openings:
4 stores; extension/renovation: 1 store; renovation to expand prescriptions: 1 store)■ No. of Stores as of November 30, 2023
Kanagawa

TokyoShizuoka

Chiba

Aichi

OtherAnnual

Drug stores

410

114

94

59

2231730

In-store
pharmacies
Rate of in-store
pharmacies
Dedicated prescription
drug stores

210

55

30

34

149352

51.2%

48.2%

31.9%

57.6%

65.6%

29.0%

48.2%

26

702

1137

Supermarkets

5000005

Total no. of stores

441

1219461

233277275. Performance Highlights■ YoY net sales comparison at all existing stores (H1): 106.6% (Q1: 106.1%; Q2: 107.1%)└ OTC: 105.8% Prescriptions: 112.9%

Successful EDLP strategy primarily for daily necessities due to rising prices
and need for households to save money
More people going out and greater movement with reclassification of
COVID-19 as a Class 5 disease
Strong results in summer seasonal
products due to heat wave

Fever, influenza, and other infectious
disease outbreaks

85. Performance Highlights■ Net sales by segment
FYE May 2023

FYE May 2024

H1 Results

H1 Results

Medical and health products
・Sales of common cold medicines up,
but sales of masks and disinfectants
down

Net sales(millions of yen)

Share(%)

Net sales(millions of yen)

Share(%)

YoY
change(%)

51,05027.6

54,654

26.6

107.1

・Increased number of prescriptions
filled from promotion of in-store
pharmacies

OTC

30,58816.5

30,497

14.8

99.7

Prescriptions as a percentage of sales
up 11.8% (+0.7 pts)

Prescriptions

20,461

11.1

24,157

11.8

118.1

Cosmetics

107.9

・Makeup cosmetics recovering due toincrease in opportunities to go out

Medical andhealth products

Cosmetics

22,28612.1

24,038

11.7

Food products

73,54939.8

86,056

41.9

117.0

Daily products

28,90715.7

30,965

15.1

107.1

Other*

8,870

4.8

9,665

4.7

109.0

Total

184,664100.0

205,380

100.0

111.2

・Increased sales of summer seasonal
cosmetics due to heat wave
Food products
・Increased sales thanks to success ofEDLP strategy, primarily for daily
necessities* “Other” includes stationery, baby products, clothing, pet products, and gardening products.

95. Performance Highlights■ Gross profit margin / SG&A ratio
Gross profitmarginFYE May 2023
H1 Results

FYE May 2024
H1 Results

Gross profit margin
YoY Change

Result(millions of yen)

Share

Result(millions of yen)Amount of sales

184,664–

205,380––111.2

Gross profit

50,561

27.4

53,660

26.1

–1.3

106.1

SG&A ratio

FYE May 2023
H1 Results
Result(millions of yen)

Total personnel
expenses

Share

ChangeFYE May 2024
H1 Results

Share

Result(millions of yen)(%)

YoY Change

Share

Change・Impact from promotion of EDLP
strategy
SG&A ratio

12.5

24,535

11.9

–0.6

106.1

512

0.3

5300.30.0103.6

Utility expenses

2,117

1.1

2,148

1.0

–0.1

101.5

Depreciation andamortization

1,901

1.0

2,159

1.1

+0.1

113.6

Commissions paid

2,338

1.3

2,572

1.3

0.0

110.0

Land/office rent

8,200

4.4

8,545

4.2

–0.2

104.2

Other

3,743

2.0

4,096

2.0

0.0

109.5

41,92722.7

44,588 21.7

–1.0

106.3

Selling, general andadministrative
expenses

・Increase in prescriptions as apercentage of sales offset
downward pressure fromrevision of medical fees anddrug prices(%)

23,115

Total sales
promotion expenses

・Reactionary drop in high grossprofit products such as masks
and disinfecting products

・Keeping personnel expenses
down by optimizing staffing
and reviewing hiring
・Addressing increase in utility
expenses by using government
subsidies
・Land rent as a percentage ofsales has declined due toincrease in number of storesthat own their own land andbuildings

105. Performance Highlights■ Prescription drug store department
Sales at all stores(millions of yen)FYE May 2023

FYE May 2024

H1 Results

H1 Results

YoYchange (%)

20,461

24,157118.1

No. of prescriptions(thousands)

Prescriptions and sales remained
firm

2,179

2,648

121.5

・Promotion of in-store pharmacies

Prescription unit price(yen)

9,164

8,933

97.5

20,40423,036

112.9

Sales at existing stores(millions of yen)
No. of prescriptions(thousands)

2,172

2,510

115.6

Prescription unit price
(yen)

9,170

8,997

98.1

Home-based dispensing
sales (millions of yen)

648

709

109.4

No. of stores offeringhome-based
dispensing services

169

189

+20

No. of prescriptions(thousands)

4445

104.2

Gross profit margin at allstores (%)

43.7

41.5–2.2・Increase in acute phaseprescriptions due to infectious
diseases including fever andinfluenza

Drop in gross profit margin due torevision of medical fees and drug
prices・Dispensing technical fee reduced
due to revision of medical fees inApril 2022 (Decrease in basic fee
applied at the Company as of April2023)
・Drug price discount rate down due
to price revision in April 2023

11

FYE May 2024 Full Year Plan

12

1. Store Openings/Closings■ H2 store openings/closings Forecast as of November 30, 2023
・Drug stores: 28 stores (full-year: 44 stores) ・Prescription drug stores: 29 stores (full-year: 48 stores)
Store closings: 8 drug stores (6 after completion of contract and 2 to improve management efficiency)
H1 storeopenings

H2 store
openings

Full-year
storeopenings

Full-year
plan

Vs planFull-year
storeclosings

Vs plan

Forecast for
May 31, 2024

1628

4450

–68+2753 stores

18294759–1200

Dedicatedprescription
drug stores

101

1000

37 stores

Yuri Store0000

6 storesTotal no. ofstores

17–68+2

Drug storesIn-store
pharmacies

111(Fresh producestores)(Fresh producestores)(Fresh producestores)

294652381 stores(In-store pharmacy
rate: 50.6%)(Including 4 freshproduce stores)

796
stores<Factors behind difference from plan>
・OTC store openings: Delays in government development permits and such, resulting in postponements into the next
fiscal year
・Prescription drug store openings: Reconsideration of opening stores where prescription demand is less likely andpostponement into the next fiscal year
・Store closings: Closure of small stores in dominant areas in conjunction with completion of contracts to concentrate
management resources132. FYE May 2024 Full-Year Plan (Consolidated)
Note: Full-year plan has not been revised.

FYE May 2023 Results

FYE May 2024 Plan

Full-year(Millions of yen)

Share(Millions of yen)(%)

Share(%)

YoYchange(%)

YoYchange(Millions ofyen)

Net sales

380,963100.0

404,100

100.0

106.1

+23,137

Gross profit

102,987

27.0

109,640

27.1

106.5

+6,653

SG&A expenses

84,07522.1

90,40022.4

107.5+6,325

Operating profit

18,912

5.0

19,2404.8

101.7+327

Ordinary profit

19,4285.1

19,8004.9

101.9+371

Profit attributable toowners of parent

12,925

3.4

13,0003.2

100.6+7414

3. Sustainability Management■ Promotion of retention and women’sadvancement■ Initiatives to reduce environmental impact

Promotion of retention

・Reduction of power consumption by stores・Establishment of career-oriented training system
・Verification of new employee mentoring system

・Improved shipping efficiency

Promotion of women’s advancement
・Creation of environment where role models canbe established
Indicators related to promotion of women’s advancement(non-consolidated)
Indicator
Percentage ofwomen promoted
to store manager or
pharmacy manager
Percentage ofwomen inmanagement
positions

Installation of solar panels
Conversion to LED lighting for cold cases

FYE May2023
results

Fiscal yearof target
achievement

Target36.6％

FYE May
2024

At
least
40%

17.7％

FYE May
2031

At
least
25%

Establishment and reallocation of distribution centers
Centralized delivery of fresh meats and otherrefrigerated products

・Promotion of recycling
Collection of medicine (PTP) sheets at stores
Waste reduction through collection of plastic bottle
caps and other itemsDisclosed in August 2023 Securities Report15Issuance of Share Options through ThirdParty Allotment Using Treasury Shares
From materials disclosed on November 6, 2023

16

1. Purpose of Fundraising and Use of Funds
From materials disclosed on November 6, 2023

(Billions of yen)

Up 13%
Medium-termManagement PlanFYE May 2028
(Projected)(Millions of yen)

(Millions of yen)

430,000

520,000

Ordinary profit

21,50026,000Ordinary profit
margin5.0％

5.0％

850 stores

1,000 stores

Net sales

Up 36%FYE May 2025
(Projected)

No. of stores<Use of funds>(1) Strengthening the opening of highly competitive large-scale stores(2) Improving productivity by establishing and reallocating distribution
centers⇒ Utilize funds in growth investments to achieve the Medium-termManagement Plan17