August 7, 2019

Summary of Consolidated Financial Results
for the First Quarter of the Fiscal Year Ending March 31, 2020(Three Months Ended June 30, 2019)[Japanese GAAP]
Listings: TSE First Section
Company name: AOKI Holdings Inc.
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:
August 8, 2019
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 August 7, 2019 at 15:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Three Months Ended June 30, 2019
(April 1, 2019 – June 30, 2019)(1) Consolidated results of operations
Sales

Operating profit

Million yen%
Million yen%
Three months ended Jun. 30, 201943,334(3.9)
228 (66.1)
Three months ended Jun. 30, 201845,113(3.0)
673 (28.7)
Note: Comprehensive income (million yen) Three months ended Jun. 30, 2019:
Three months ended Jun. 30, 2018:

Three months ended Jun. 30, 2019
Three months ended Jun. 30, 2018

Net income per share
Yen(3.35)(3.43)(Percentages represent year-on-year changes)
Profit attributable toOrdinary profit
owners of parent
Million yen%
Million yen
%
(125)
(288)
165 (80.8)(296)(434) (-%)
(289) (-%)

Diluted net income per share
Yen-(2) Consolidated financial position
Total assets
Net assets
Million yen
Million yen
As of Jun. 30, 2019
231,210
142,568
As of Mar. 31, 2019
232,056
145,671
Reference: Shareholders’ equity (million yen)
As of Jun. 30, 2019:
142,497

Equity ratio
%
61.6
62.7
As of Mar. 31, 2019: 145,595

2. Dividends
1Q-endYen

2Q-endYen

Dividend per share
3Q-endYen-

Year-end
Yen
31.00

Total
Yen

FY3/1929.00
FY3/20FY3/20 (forecasts)
23.00
23.00
Note: Revisions to the most recently announced dividend forecast: None
Breakdown of 2Q-end dividends for FY3/19: Ordinary dividends: 22.00 yen; Commemorative dividends: 7.00 yen
Breakdown of Year-end dividends for FY3/19: Ordinary dividends: 23.00 yen; Commemorative dividends: 8.00 yen

60.00
46.00

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2020 (April 1, 2019 – March 31, 2020)
Sales

Operating profit

Ordinary profit

Million yen%
Million yen%
Million yen
Full year
194,050(0.5)
12,300(8.8)
11,750Note: Revisions to the most recently announced consolidated forecast: None

%
(1.2)

(Percentages represent year-on-year changes)
Profit attributable to
Net income per shareowners of parent
Million yen
%
Yen
5,400
17.3
62.85

* 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 Jun. 30, 2019:

90,649,504 shares

As of Mar. 31, 2019:

90,649,504 shares

As of Mar. 31, 2019:

4,724,330 shares

Three months ended Jun. 30, 2018:

86,501,449 shares

2) Number of shares of treasury stock at the end of the period
As of Jun. 30, 2019:

4,724,448 shares

3) Average number of shares outstanding during the period
Three months ended Jun. 30, 2019:85,925,130 shares

Note 1: The current quarterly summary report is not subject to quarterly review by certified public accountants or auditing firms.
Note 2: Cautionary statement with respect to forecasts and other matters
Cautionary statement with respect to forward-looking statements
Forecasts and forward-looking statements 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) First Quarter of the Fiscal Year Ending March 31, 2020

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

Additional Information

8

Segment and Other Information

8

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AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2020

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In prior years, rent income of real estate and the rent cost of real estate were included in non-operating income,selling, general and administrative expenses, and non-operating expenses. Beginning with the first quarter of thecurrent fiscal year, rent income of real estate and the rent cost of real estate are instead included in sales and cost of
sales. Comparisons and analysis using results of operations in the first quarter of the previous fiscal year are basedon figures that have been restated to conform with this change.
In the first quarter of the current fiscal year, the Japanese economy continued to recover slowly due to improvementsin the labor market and personal income and other reasons. However, the economic outlook remains unclear because
of increasing uncertainty about global events, including the effects of U.S.-China trade friction that began around theend of the previous fiscal year.
The AOKI Group implemented various measures in all business segments as explained below. Sales decreased 3.9%
year-on-year to 43,334 million yen, operating profit decreased 66.1% to 228 million yen. There was an ordinary lossof 125 million yen compared with a profit of 165 million yen one year earlier. Loss attributable to owners of parent
was 288 million yen compared with a loss of 296 million yen one year earlier).
Operating results by segment are as follows.
As AOKI revised its reportable segments in the first quarter of the current fiscal year, a comparative analysis ofsegment performance is presented based on the revised segments.
Fashion Business
At AOKI, there were activities to provide customers with new ideas involving personal order suits as well as an
expansion of the lineup of Cool Biz apparel featuring a variety of functions for comfort during the spring andsummer. AOKI stores also increased activities involving set-up suits (set of jacket, pants and skirts) both for men
and women that can be easily mixed and matched. Three AOKI stores were opened during the first quarter and 39
stores were closed, including stores closed for relocation or conversion to complex cafés and other formats. These
closings are the result of examinations of stores from the standpoint of profitability and AOKI’s dominant areas. At
the end of the first quarter, there were 530 AOKI stores compared with 566 at the end of the previous fiscal year.
ORIHICA enlarged its lineup of No-Iron Series and strengthened the selection and styling of Cool Biz apparel. In
addition, THE THIRD SUITS brand, now in its fifth year, has been expanded to encompass apparel for going to andfrom work and for business travel. There were 131 stores at the end of the first quarter as no stores were opened orclosed.
First quarter sales in this segment decreased 6.5% from one year earlier to 24,181 million yen. This was mainly the
result of the smaller number of stores and sluggish sales at existing stores because of a shift in preferences for stylesof business apparel. The first quarter operating loss was 395 million yen compared with a 204 million yen loss one
year earlier.
Anniversaire and Bridal Business
ANNIVERSAIRE INC., which operates guesthouse-style wedding and reception facilities, took many actions to
attract more customers. This company increased bridal fair activities and expanded its collection of original wedding
dresses. ANNIVERSAIRE also increased the use of social networking services by distributing an official app andsetting up official accounts. Despite these actions, the number of weddings was lower than one year earlier mainly
because of the smaller number of wedding and reception locations and changing market conditions.
Sales decreased 14.7% to 5,592 million yen and there was an operating loss of 35 million yen compared with a profitof 417 million yen one year earlier.

2

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2020

Entertainment Business
KAIKATSU CLUB, a chain of café complexes, completed renovations of 30 locations during the first quarter.
Improvements include a reconfigured booth layout, the addition of karaoke rooms, no-smoking booths and showers,
and other changes. In addition, more cafés now offer a free breakfast buffet and other actions were taken to meet theneeds of customers.
A new business format has been launched by combining a KAIKATSU CLUB with a FiT24 fitness center, whichuses a self-service format and is open 24 hours. Combining a café complex with fitness equipment clearly
differentiates these unique locations from the operations of competitors.
COTE D’AZUR karaoke locations are installing karaoke units with the latest technologies, high-resolution speakers
and making other improvements in order to make existing locations more appealing.
During the first quarter, 13 KAIKATSU CLUBs and three FiT24 fitness centers were opened. Including COTE
D’AZUR, this business segment had 515 locations at the end of the first quarter compared with 499 at the end of theprevious fiscal year.
Sales increased 6.6% to 13,261 million yen due to contributions from new facilities and strong existing-store sales,
and operating profit increased 150.4% to 463 million yen.
Real Estate Leasing Business
Segment sales increased 10.4% to 846 million yen as COTE D’AZUR karaoke locations that were closed in theprevious fiscal year were subleased and other factors. Operating profit decreased 30.8% to 122 million yen due inpart to subleasing losses.
(2) Explanation of Financial Position
Balance sheet position
AssetsTotal assets at the end of the first quarter under review decreased 846 million yen from the end of the previous fiscal
year to 231,210 million yen due to seasonal factors.
Current assets decreased 1,698 million yen from the end of the previous fiscal year. There was a decrease of 5,613
million yen in accounts receivable-trade due to seasonal factors while cash in hand and in banks increased 3,118
million yen due to recovery. Fixed assets increased 852 million yen from the end of the previous fiscal year as
tangible fixed assets increased 410 million yen due to new store openings and other factors.
Liabilities
Current liabilities increased 2,269 million yen from the end of the previous fiscal year. Accounts payable-tradedecreased 3,396 million yen mainly due to seasonal factors while there was a short-term debt of 4,000 million yen
and an increase in current portion of long-term debt of 1,000 million yen. There was no big change in long-term
liabilities.
Net assets
Net assets decreased 3,102 million yen from the end of the previous fiscal year. There was a decrease of 2,951
million yen in retained earnings due to a loss attributable to owners of parent and dividend from surplus.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
In the first quarter of the current fiscal year, sales were less than planned because of slow existing store sales in the
fashion business. But the operating profit was generally consistent with the forecast overall due to contributions fromthe strong existing store sales in the entertainment business and cost cutting measures in all businesses. There are nochanges to the forecast that was announced on May 10, 2019.

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AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2020

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)First quarter of FY3/20(As of Jun. 30, 2019)

FY3/19(As of Mar. 31, 2019)
AssetsCurrent assets
Cash in hand and in banks

26,55829,676

Accounts receivable-trade

11,793

6,180

Inventories

25,57425,352Other current assets

9,061

10,076

Allowance for doubtful accounts

(38)

(35)

72,94871,250Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures, net

60,933

61,275

Land

36,941

36,941Other, net

12,083

12,152

Total tangible fixed assets

109,958

110,368

5,932

6,140

Guarantee deposits

7,881

7,912

Leasehold deposit

20,536

20,502Other investments and other assets

14,83815,075Intangible fixed assets
Investments and other assets

Allowance for doubtful accounts

(40)

(40)

Total investments and other assets

43,21643,450159,107

159,959

232,056

231,210

18,162

14,765

-

4,000

2,650

3,650

579

138

2,078

932

83

21

Other current liabilities

13,624

15,939Total current liabilities

37,17739,447

34,82534,825872

824

Total fixed assets
Total assets
Liabilities
Current liabilities
Accounts payable-trade
Short-term debt
Current portion of long-term debt
Accrued income taxes
Accrued bonuses for employees
Accrued bonuses for directors and statutory auditors

Long-term liabilities
Long-term debt
Accrued costs for customer point program
Retirement benefit liability

1,094

1,113

Asset retirement obligations

6,466

6,483

Other long-term liabilities

5,949

5,947

Total long-term liabilities

49,20849,19386,38588,641

Total liabilities

4

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2020

(Millions of yen)First quarter of FY3/20(As of Jun. 30, 2019)

FY3/19(As of Mar. 31, 2019)
Net assets
Shareholders’ equity
Common stock

23,282

23,282

Capital surplus

27,846

27,846

Retained earnings

100,488

97,536

Treasury stock(6,302)(6,302)

Total shareholders’ equity

145,315

142,363

Unrealized gain on securities

370

209

Remeasurements of defined benefit plans

(89)

(75)

Total accumulated other comprehensive income

280

133

75

71

Accumulated other comprehensive income

Stock acquisition rights
Total net assets
Total liabilities and net assets

5

145,671

142,568

232,056

231,210

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2020

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
IncomeQuarterly Consolidated Statement of Income(For the Three-month Period)First three months of FY3/19(Apr. 1, 2018 – Jun. 30, 2018)(Millions of yen)First three months of FY3/20(Apr. 1, 2019 – Jun. 30, 2019)

Sales

45,11343,334

Cost of sales

26,726

26,101Gross profit

18,386

17,233

Selling, general and administrative expenses

17,71317,005673

228Interest income

28

24

Dividend income

26

27

Other

47

49

Total non-operating profit

102

101

78

68

Operating profit
Non-operating profit

Non-operating expenses
Interest expenses
Loss on disposal of fixed assets

289

222

Other

242

164

Total non-operating expenses

610

455

165

(125)

Gain on sale of fixed assets-

50

Gain on reversal of stock acquisition rights

7

3

Total extraordinary gains

7

53

643

220

Ordinary profit (loss)
Extraordinary gains

Extraordinary losses
Impairment loss

643

220

Loss before income taxes

Total extraordinary losses

(470)

(292)

Current income taxes

190

112

Deferred income taxes

(364)

(116)

Total income taxes

(173)

(4)

Loss

(296)

(288)

Loss attributable to owners of parent

(296)

(288)

6

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2020

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)First three months of FY3/19(Apr. 1, 2018 – Jun. 30, 2018)(Millions of yen)First three months of FY3/20(Apr. 1, 2019 – Jun. 30, 2019)

(296)

(288)

Unrealized gain on securities

(9)

(160)

Remeasurements of defined benefit plans, net of tax

16

13

Total other comprehensive income

7

(146)

(289)

(434)

(289)

(434)

-

-

Loss
Other comprehensive income

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

7

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2020

(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
No reportable information.
Significant Changes in Shareholders’ Equity
First three months of FY3/20 (Apr. 1, 2019 – Jun. 30, 2019)
No reportable information.
Additional Information
Reclassifications
In prior years, rent income of real estate and the rent cost of real estate were included in non-operating income,selling, general and administrative expenses, and non-operating expenses. Beginning with the first quarter of thecurrent fiscal year, rent income of real estate and the rent cost of real estate are instead included in sales and cost of
sales.
This change was made to more properly incorporate the real estate leasing business in the financial statements. Realestate leasing is now positioned as one of the major businesses of AOKI Holdings. Rent income of real estate is aconsistent source of earnings and more growth of this income is expected as the number of leased properties
increases. In addition, the profitability of this business has been properly managed by the relevant department.
Consolidated financial statements for the first quarter of the previous fiscal year have been restated to reflect thesereclassifications.
Accordingly, “rental income on real estate” under “non-operating profit” of 129 million yen, “rent cost of realestate” under “non-operating expenses” of 96 million yen and real estate-related expenses, which was included in“selling, general and administrative expenses,” of 7 million yen in the consolidated statement of income for the first
three months of the previous fiscal year has been reclassified. As a result, sales and cost of sales increased 279
million yen and 253 million yen, respectively.
Segment and Other Information
First three months of FY3/19 (Apr. 1, 2018 – Jun. 30, 2018)
1. Information related to sales and profit/loss for each reportable segment
Reportable segment
AnniversaireEntertainment
and Bridal

Fashion

Real Estate
Leasing

Total(Millions of yen)Amounts shown on
Adjustment quarterly consolidated(Note 1)statement of income(Note 2)

Sales
External sales
Inter-segment sales
and transfers
Total

25,851

6,542

12,439279

45,113-

45,113

1

10

0

487

499

(499)

-

25,852

6,553

12,440766

45,613(499)

45,113

Segment profit (loss)
(204)
417
185
176
574
98
673
Notes: 1. The 98 million yen adjustment to segment profit (loss) includes 890 million yen in elimination for inter-segment
transactions, and -791 million yen in company-wide costs that cannot be allocated to any specific reportable segments.
Company-wide costs mainly include administration expenses of the Company that cannot be attributed to reportablesegments.
2. Segment profit (loss) is adjusted with operating profit on the quarterly consolidated statement of income.

8

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2020

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 and the Entertainment Business, impairment losses were recognized for operating stores set
to be closed, rebuilt or converted for which there is little expectation of recovery and subleasing stores expected toremain in the red; impairment losses of 81 million yen and 561 million yen were booked respectively in the first
three months of FY3/19.
First three months of FY3/20 (Apr. 1, 2019 – Jun. 30, 2019)
1. Information related to sales and profit/loss for each reportable segment
Reportable segment
Anniversaire
Real EstateEntertainment
and Bridal
Leasing

Fashion

Total(Millions of yen)Amounts shown on
Adjustment quarterly consolidated(Note 1)statement of income(Note 2)

Sales
External sales
Inter-segment sales
and transfers
Total

24,181

5,588

13,261

302

43,334-43,334

0

3

0

544

547

(547)

-

24,181

5,592

13,261846

43,882(547)

43,334

Segment profit (loss)
(395)
(35)
463
122
154
73
228
Notes: 1. The 73 million yen adjustment to segment profit (loss) includes 1,052 million yen in elimination for inter-segment
transactions, and -979 million yen in company-wide costs that cannot be allocated to any specific reportable segments.
Company-wide costs mainly include administration expenses of the Company that cannot be attributed to reportablesegments.
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 Entertainment Business and the Real Estate Leasing Business, impairment losses wererecognized for operating stores set to be closed or converted for which there is little expectation of recovery andsubleasing stores expected to remain in the red; impairment losses of 167 million yen, 37 million yen and 14 million
yen were booked respectively in the first three months of FY3/20.
3. Information related to revisions for reportable segments
In the first quarter of FY3/20, the Karaoke Facility Operations Business and Café Complex Operations Businesswere combined to reflect the reorganization of management and the increasing diversity of the operations. The
combined business was renamed the Entertainment Business.
As noted in the section “Additional Information, Reclassifications,” the business related to real estate leasing is
reclassified and presented as a separate segment titled “Real Estate Leasing Business.”
The segment information for the first three months of FY3/19 is prepared and disclosed based on the reportablesegments after the revision.

* 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 of readers
who prefer an English translation.

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