February 8, 2018

Summary of Consolidated Financial Results
for the Third Quarter of the Fiscal Year Ending March 31, 2018
(Nine Months Ended December 31, 2017)[Japanese GAAP]
Company name: AOKI Holdings Inc.
Listings: TSE First Section
Stock code:
8214
URL: http://www.aoki-hd.co.jp/
Representative:
Akihiro Aoki, President
Contact:
Haruo Tamura, Executive Vice President
Tel: +81-45-941-1388
Scheduled date of filing of Quarterly Report:
February 9, 2018
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting:
None
Note: The original disclosure in Japanese was released on February 8, 2018 at 15:30 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2017
(April 1, 2017 – December 31, 2017)(1) Consolidated results of operations
Sales

Operating profit

Million yen%
Million yen%
Nine months ended Dec. 31, 2017
137,088
2.8
5,182
21.6
Nine months ended Dec. 31, 2016
133,404
1.8
4,259 (48.7)
Note: Comprehensive income (million yen) Nine months ended Dec. 31, 2017:
Nine months ended Dec. 31, 2016:

Nine months ended Dec. 31, 2017
Nine months ended Dec. 31, 2016

Net income per share
Yen
25.72
25.67

(Percentages represent year-on-year changes)
Profit attributable toOrdinary profit
owners of parent
Million yen%
Million yen
%
4,557
14.7
2,237
(1.5)
3,972 (51.3)
2,271 (51.9)
2,543 (up 0.2%)
2,538 (down 46.5%)

Diluted net income per share
Yen-(2) Consolidated financial position
Total assets
Net assets
Million yen
Million yen
As of Dec. 31, 2017
231,731
142,100
As of Mar. 31, 2017234,681
143,906
Reference: Shareholders’ equity (million yen)
As of Dec. 31, 2017:
142,012Equity ratio
%
61.3
61.3
As of Mar. 31, 2017: 143,818

2. Dividends
1Q-endYen

2Q-end
Yen
21.00
22.00

FY3/17
FY3/18
FY3/18 (forecasts)
Note: Revisions to the most recently announced dividend forecast: None

Dividend per share
3Q-endYen-

Year-end
Yen
22.00
22.00

Total
Yen
43.00
44.00

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2018 (April 1, 2017 – March 31, 2018)
Sales

Operating profit

Ordinary profit

Million yen%
Million yen%
Million yen
Full year
199,850
3.0
14,5000.4
14,000Note: Revisions to the most recently announced consolidated forecast: None%
0.8

(Percentages represent year-on-year changes)
Profit attributable to
Net income per shareowners of parent
Million yen
%
Yen
7,600
3.3
87.40

* Notes(1) Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None
(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others:None2) Changes in accounting policies other than 1) above:None3) Changes in accounting-based estimates:

None4) Restatements:

None(4) Number of shares outstanding (common shares)
1) Number of shares outstanding (including treasury stock) at the end of the period
As of Dec. 31, 2017:

90,649,504 shares

As of Mar. 31, 2017:

90,649,504 shares

As of Mar. 31, 2017:

3,404,290 shares

Nine months ended Dec. 31, 2016:

88,461,871 shares

2) Number of shares of treasury stock at the end of the period
As of Dec. 31, 2017:

3,768,614 shares

3) Average number of shares outstanding during the period
Nine months ended Dec. 31, 2017:

86,977,232 shares

Note 1: The current quarterly summary report is not subject to quarterly review procedures.
Note 2: Cautionary statement with respect to forecasts and other matters
Cautionary statement with respect to forecasts
Forecasts regarding future performance in these materials are based on assumptions judged to be valid and information available
to the Company at the time the materials were created. These materials are not promises by the Company regarding future
performance. Actual performance may differ significantly from these forecasts for a number of reasons. Please refer to “(3)Explanation of Consolidated Forecast and Other Forward-looking Statements” on page 3 of the attachments regarding
preconditions or other related matters for the forecast shown above.

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2018

Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance

Pages
2

(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statement of Income andQuarterly Consolidated Statement of Comprehensive Income

6

Quarterly Consolidated Statement of Income

6

Quarterly Consolidated Statement of Comprehensive Income

7(3) Notes to Quarterly Consolidated Financial Statements

8

Going Concern Assumption

8

Significant Changes in Shareholders’ Equity

8

Segment and Other Information

8

Subsequent Events

9

1

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2018

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first nine months of the current fiscal year, the Japanese economy continued to recover slowly withimprovements in corporate earnings and employment conditions. Consumer spending is remaining sluggish
because of a strong desire to hold down spending even though the stock market rally and other events are causing
consumer sentiment to improve. This environment, along with uncertainty about overseas events, makes theoutlook for the Japanese economy unclear.
During the first nine months, the AOKI Group implemented various measures in all business segments as
discussed below. Sales increased 2.8% year-on-year to 137,088 million yen, operating profit increased 21.6% to
5,182 million yen, ordinary profit increased 14.7% to 4,557 million yen and profit attributable to owners of parent
decreased 1.5% to 2,237 million yen.
Operating results by segment are as follows.
Fashion Business
AOKI continued to concentrate on activities aimed at improving the performance of existing stores. One step isthe line of Rakudo Suits and Rakudo Coats that were developed jointly with Shinshu University. This apparel
combines stretchable fabric with three-dimensional sewing to achieve outstanding ease of movement and comfort.
AOKI also expanded the lineup of Hatarakufuku working clothes for women. This highly functional apparel iseasy to wash, wrinkle resistant and stretches easily. During the first nine months, AOKI opened 13 storesincluding stand-alone Size MAX stores, which specialize in plus-size apparel, and stores specializing in apparelfor job interviews. Ten stores were closed or relocated to improve the efficiency of AOKI’s operations. As a result,
there were 576 stores at the end of the third quarter compared with 573 stores at the end of the previous fiscal
year.
ORIHICA increased activities to create new ideas for business and business-to-casual apparel. Two examples area larger selection of Super No-Iron Shirts and the addition of women’s fashions to apparel using THE 3rd SUITS
brand. Six new stores were opened including Ginza Store in central Tokyo, and six were closed to improve theefficiency of operations during the first nine months. As a result, there were 145 stores at the end of the third
quarter compared with 145 stores at the end of the previous fiscal year.
As a result, sales increased 0.3% to 76,381 million yen and operating profit was 525 million yen, compared with aloss of 513 million yen in the same period of the previous fiscal year when there were major remodeling projects.
Anniversaire and Bridal Business
ANNIVERSAIRE INC. operates guesthouse-style wedding and reception facilities. This company continued tostrengthen the Proposal Plan in order to create a new channel for attracting customers. There were also new ideas
for innovative wedding reception formats in order to reflect the increasingly diverse needs of customers. In
addition, the company conducted marketing and other promotional activities that utilize the powerful public
image of the ANNIVERSAIRE brand.
Sales increased 0.8% to 21,078 million yen and operating profit decreased 2.0% to 2,324 million yen.
Karaoke Facility Operations Business
The karaoke business of VALIC Co., Ltd. offered a wide variety of party packages for the year-end party season,and conducted a marketing campaign using tie-ups with popular characters. Furthermore, the most advanced
karaoke equipment was installed to reinvigorate existing karaoke facilities. During the first nine months, thenumber of locations decreased by one to 184 as we opened five karaoke facilities and closed six to improve
operating efficiency.
As a result, sales increased 0.8% to 14,082 million yen. Due to an increase in the cost of sales caused by higher
personnel and other expenses, operating profit decreased 18.2% to 483 million yen.

2

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2018

Café Complex Operations BusinessIn the café complex business, VALIC Co., Ltd. concentrated on invigorating existing locations. Major activities
were the remodeling of cafés, mainly by adding more sections exclusively for women and improving theconfiguration of booths, and upgrading the selection of content and food. VALIC opened 22 locations and closed
four locations during the first nine months. As a result, there were 364 café complexes at the end of the third
quarter compared with 346 at the end of the previous fiscal year.
Sales increased 14.2% to 25,573 million yen due to contributions from new cafés, but operating profit decreased
2.3% to 1,349 million yen because of higher cost of sales including depreciation, personnel and other expenses.
(2) Explanation of Financial Position
Balance sheet position
AssetsTotal assets at the end of the third quarter under review decreased 2,949 million yen from the end of the previous
fiscal year to 231,731 million yen.
Current assets decreased 4,110 million yen from the end of the previous fiscal year. There were decreases of
3,739 million yen in cash in hand and in banks mainly due to capital expenditures and payment of income taxes,
and 4,141 million yen in accounts receivable-trade due to seasonal reasons, while there were increases of 1,226
million yen in inventories due to seasonal reasons, and 2,543 million yen in other current assets which include
income taxes receivable. Fixed assets increased 1,160 million yen from the end of the previous fiscal year as
tangible fixed assets increased 2,269 million yen due to new store openings, renewals and other factors.
Liabilities
Current liabilities decreased 1,529 million yen from the end of the previous fiscal year. There were decreases of
1,923 million yen in accounts payable-trade due to seasonal reasons, 1,500 million yen in current portion of
long-term debt, 1,306 million yen in accrued income taxes due to the payment of income taxes among otherreasons, and 637 million yen in accrued bonuses for employees due to the payment of bonuses to employees
among other reasons, while there was an increase of 4,500 million yen in short-term debt. Long-term liabilities
increased 386 million yen due to an increase in other long-term liabilities including long-term lease obligations.
Net assets
Net assets decreased 1,805 million yen from the end of the previous fiscal year. There was a decrease of 1,593
million yen in retained earnings due to a profit attributable to owners of parent and dividend from surplus, and anincrease of 518 million yen in treasury stock due to the purchase.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
We have maintained the forecast that was announced on November 9, 2017, because the results of operations in
the first nine months under review were generally in line with the forecast.

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AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2018

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)
Third quarter of FY3/18(As of Dec. 31, 2017)

FY3/17(As of Mar. 31, 2017)
AssetsCurrent assets
Cash in hand and in banks

28,60824,868

Accounts receivable-trade

10,508

6,366

Inventories

26,90528,131Other current assets

8,974

11,517

Allowance for doubtful accounts

(32)

(31)

74,96370,852

Buildings and structures, net

61,56862,115

Land

36,95336,952Other tangible fixed assets, net

13,164

14,887

Total tangible fixed assets

111,686

113,955

6,301

5,815

Total current assets
Fixed assets
Tangible fixed assets

Intangible fixed assets
Investments and other assets
Guarantee deposits

8,259

8,075

Leasehold deposit

21,066

20,818Other investments and other assets

12,444

12,254

Allowance for doubtful accounts

(40)

(40)

Total investments and other assets

41,73041,107

Total fixed assets

159,718

160,878

234,681

231,731

19,15917,236-

4,500

Current portion of long-term debt

4,150

2,650

Accrued income taxes

1,603

296

Accrued bonuses for employees

1,647

1,010

Total assets
Liabilities
Current liabilities
Accounts payable-trade
Short-term debt

89

85

Other current liabilities

12,546

11,888

Total current liabilities

39,197

37,667

37,12536,800

1,949

1,991

Accrued bonuses for directors and statutory auditors

Long-term liabilities
Long-term debt
Accrued retirement benefits for directors and statutory
auditors
Accrued costs for customer point program

1,069

985

Net defined benefit liability

976

1,049

Asset retirement obligations

5,513

5,641

Other long-term liabilities

4,943

5,495

Total long-term liabilities

51,57751,96390,774

89,631

Total liabilities

4

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2018

(Millions of yen)
Third quarter of FY3/18(As of Dec. 31, 2017)

FY3/17(As of Mar. 31, 2017)
Net assets
Shareholders’ equity
Common stock

23,282

23,282

Capital surplus

27,833

27,833Retained earnings

96,753

95,159Treasury stock(4,325)(4,843)

Total shareholders’ equity

143,544

141,433

576

803

(302)

(223)

274

579

87

87

143,906

142,100

234,681

231,731

Accumulated other comprehensive income
Unrealized gain on securities
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Stock acquisition rights
Total net assets
Total liabilities and net assets

5

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2018

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
IncomeQuarterly Consolidated Statement of Income(For the Nine-month Period)First nine months of FY3/17(Apr. 1, 2016 – Dec. 31, 2016)(Millions of yen)First nine months of FY3/18(Apr. 1, 2017 – Dec. 31, 2017)

Sales

133,404

137,088

Cost of sales

76,37479,557Gross profit

57,03057,531

Selling, general and administrative expenses

52,77052,349Operating profit

4,259

5,182

74

71

Non-operating profit
Interest income
Dividend income

91

59

Rental income on real estate

458

422

Other

209

126

Total non-operating profit

834

680

Interest expenses

237

252

Expenses on sub-leased real estate

382

366

Non-operating expenses

Other
Total non-operating expenses
Ordinary profit
Extraordinary gains
Gain on sales of investment securities
Total extraordinary gains

501

685

1,121

1,305

3,972

4,557

545

-

545

-

471

593

Extraordinary losses
Impairment loss
Loss on sales of fixed assets-

38

Loss on disaster102-

Total extraordinary losses

574

632

Profit before income taxes

3,944

3,925

Current income taxes

1,783

1,298

Deferred income taxes

(110)

389

Total income taxes

1,673

1,687

Profit

2,271

2,237

Profit attributable to owners of parent

2,271

2,237

6

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2018

Quarterly Consolidated Statement of Comprehensive Income(For the Nine-month Period)First nine months of FY3/17(Apr. 1, 2016 – Dec. 31, 2016)(Millions of yen)First nine months of FY3/18(Apr. 1, 2017 – Dec. 31, 2017)

2,271

2,237

Unrealized gain on securities

179

227

Remeasurements of defined benefit plans, net of tax

87

78

ProfitOther comprehensive income

Total other comprehensive income
Comprehensive income

267

305

2,538

2,543

2,538

2,543

-

-

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

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AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2018

(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
No reportable information.
Significant Changes in Shareholders’ Equity
First nine months of FY3/18 (Apr. 1, 2017 – Dec. 31, 2017)
Purchase of treasury stock
The Company has purchased 363,000 shares of its treasury stock pursuant to the resolution of the Board of
Directors on February 9, 2017. As a result, treasury stock increased 516 million yen during the first nine months
of FY3/18 to 4,843 million yen at the end of the third quarter of FY3/18.
Segment and Other Information
First nine months of FY3/17 (Apr. 1, 2016 – Dec. 31, 2016)
1. Information related to sales and profit/loss for each reportable segment(Millions of yen)Amounts shown onquarterly
Adjustment
consolidated(Note 1)statement of income(Note 2)

Reportable segment
FashionAnniversaireand Bridal

Karaoke
Facility
Operations

CaféComplexOperations

Total

Sales
External sales
Inter-segment sales
and transfers

76,157

20,892

13,96522,389133,404-

133,404

1

9

4

-

15

(15)

-

Total

76,15820,901

13,96922,389133,420(15)

133,404

Segment profit
(513)
2,371
591
1,381
3,831
428
4,259
(loss)
Notes: 1. The 428 million yen adjustment to segment profit (loss) includes 3,268 million yen in elimination for inter-segment
transactions, and -2,840 million yen in company-wide costs that cannot be allocated to any specific reportablesegments. Company-wide costs mainly include administration expenses of the Company that cannot be attributed toreportable segments.
2. Segment profit (loss) is adjusted with operating profit on the quarterly consolidated statement of income.

2. Information related to impairment losses on fixed assets, or goodwill, etc. for each reportable segment
Material impairment losses related to fixed assets
In the Fashion Business, the Karaoke Facility Operations Business and the Café Complex Operations Business,
impairment losses were recognized for operating stores set to be closed or rebuilt for which there is little
expectation of recovery and had remained in the red; impairment losses of 192 million yen, 206 million yen and
72 million yen were booked respectively in the first nine months of FY3/17.

8

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2018

First nine months of FY3/18 (Apr. 1, 2017 – Dec. 31, 2017)
1. Information related to sales and profit/loss for each reportable segment(Millions of yen)Amounts shown onquarterly
Adjustment
consolidated(Note 1)statement of income(Note 2)

Reportable segment
FashionAnniversaireand Bridal

Karaoke
Facility
Operations

CaféComplexOperations

Total

Sales
External sales
Inter-segment sales
and transfers

76,36821,067

14,07725,573137,088-

137,088

12

10

4

-

27

(27)

-

Total

76,381

21,07814,082

25,573

137,116(27)

137,088

Segment profit
525
2,324
483
1,349
4,683
498
5,182
Notes: 1. The 498 million yen adjustment to segment profit includes 3,187 million yen in elimination for inter-segment
transactions, and -2,688 million yen in company-wide costs that cannot be allocated to any specific reportablesegments. Company-wide costs mainly include administration expenses of the Company that cannot be attributed toreportable segments.
2. Segment profit is adjusted with operating profit on the quarterly consolidated statement of income.

2. Information related to impairment losses on fixed assets, or goodwill, etc. for each reportable segment
Material impairment losses related to fixed assets
In the Fashion Business, the ANNIVERSAIRE and Bridal Business, the Karaoke Facility Operations Businessand the Café Complex Operations Business, impairment losses were recognized for operating stores set to beclosed or rebuilt for which there is little expectation of recovery; impairment losses of 198 million yen, 10
million yen, 291 million yen and 92 million yen were booked respectively in the first nine months of FY3/18.
Subsequent Events
At the Board of Directors meeting held on January 31, 2018, a solution was adopted that the Company will
acquire treasury stock pursuant to Article 156 which is applicable in lieu of Article 165, Paragraph 3 of theCompanies Act.
1. Reason for the acquisition of treasury stock: The Company will purchase treasury stock in order to adopt
timely and flexible financial strategies in response to changes in
the operating environment and to increase shareholder value.
2. Type of shares to be acquired:

Common stock of AOKI Holdings

3. Total number of shares to be acquired:

Up to 1 million shares(1.15% of total shares outstanding, excluding treasury stock)

4. Total value of shares to be acquired:

Up to 2 billion yen

5. Acquisition schedule:

From February 13, 2018 to December 28, 2018

6. Method of acquisition:

Purchase on the Market* This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience ofreaders who prefer an English translation.

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