August 3, 2018

Summary of Consolidated Financial Results
for the First Quarter of the Fiscal Year Ending March 31, 2019
(Three Months Ended June 30, 2018)[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 6, 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 August 3, 2018 at 15:30 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Three Months Ended June 30, 2018 (April 1, 2018 – June 30, 2018)(1) Consolidated results of operations
Sales

Operating profit

Million yen%
Million yen%
Three months ended Jun. 30, 201844,834(3.1)
640 (30.0)
46,254(0.1)
914 (44.6)
Three months ended Jun. 30, 2017
Note: Comprehensive income (million yen) Three months ended Jun. 30, 2018:
Three months ended Jun. 30, 2017:

Three months ended Jun. 30, 2018
Three months ended Jun. 30, 2017

Net income per share
Yen(3.43)
3.74(Percentages represent year-on-year changes)
Profit attributable toOrdinary profit
owners of parent
Million yen%
Million yen%
165 (80.8)(296)
862 (47.1)
325 (62.6)(289) (-%)
418 (down 29.1%)

Diluted net income per share
Yen-(2) Consolidated financial position
Total assets
Net assets
Million yen
Million yen
As of Jun. 30, 2018234,407
144,190
As of Mar. 31, 2018
239,068
146,528
Reference: Shareholders’ equity (million yen)
As of Jun. 30, 2018:
144,109

Equity ratio
%
61.5
61.3
As of Mar. 31, 2018: 146,440

2. Dividends
1Q-endYen

2Q-endYen
22.00

Dividend per share
3Q-endYen-

Year-end
Yen
22.00

Total
Yen

44.00
FY3/18
FY3/19
29.00
31.00
60.00
FY3/19 (forecasts)
Note: Revisions to the most recently announced dividend forecast: None
Breakdown of 2Q-end dividends for FY3/19 (forecasts): Ordinary dividends: 22.00 yen; Commemorative dividends: 7.00 yen
Breakdown of Year-end dividends for FY3/19 (forecasts): Ordinary dividends: 23.00 yen; Commemorative dividends: 8.00 yen

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2019 (April 1, 2018 – March 31, 2019)
Sales

Operating profit

Ordinary profit

Million yen%
Million yen%
Million yen
Full year
199,100
0.3
15,0000.9
13,750Note: Revisions to the most recently announced consolidated forecast: None

%
(1.8)

(Percentages represent year-on-year changes)
Profit attributable to
Net income per shareowners of parent
Million yen
%
Yen
7,400
0.3
85.56

* 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:

Yes2) Changes in accounting policies other than 1) above:None3) Changes in accounting-based estimates:

None4) Restatements:

None

Note: Please refer to “Changes in Accounting Policies” on page 8 for further information.

(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, 2018:

90,649,504 shares

As of Mar. 31, 2018:

90,649,504 shares

As of Mar. 31, 2018:

4,085,322 shares

Three months ended Jun. 30, 2017:87,121,313 shares

2) Number of shares of treasury stock at the end of the period
As of Jun. 30, 2018:

4,169,006 shares

3) Average number of shares outstanding during the period
Three months ended Jun. 30, 2018:

86,501,449 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, 2019

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

Changes in Accounting Policies

8

Additional Information

8

Segment and Other Information

9

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AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2019

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first quarter of the current fiscal year, the Japanese economy continued to recover slowly with the support ofpositive trends such as improvements in the labor market and personal income. Consumer spending remained firm
but continues to be somewhat lackluster mainly because rising prices of necessities are making consumers morebudget minded.
In this environment, the AOKI Group implemented various measures in all business segments as explained below.
Sales decreased 3.1% year-on-year to 44,834 million yen, operating profit decreased 30.0% to 640 million yen,ordinary profit decreased 80.8% to 165 million yen and loss attributable to owners of parent was 296 million yen
compared with profit attributable to owners of parent of 325 million yen in the same period of the previous fiscal
year.
Operating results by segment are as follows.
Fashion BusinessIn one step to meet the demand for new spring and summer apparel and for Cool Biz apparel, AOKI sells the Rakudo
Series of suits, jackets, shirts and trousers that are easy to wash and facilitate easy movement. In addition, AOKI
started selling spring and summer apparel in the Hatarakufuku line of working clothes for women. This apparel iseasy to wash, wrinkle resistant, stretches easily and now also features a large variety of variations for mixing andmatching different items. Also, AOKI has started suitsbox, Japan’s first business suit delivery subscription service.
Customers pay a monthly subscription fee to receive one or more complete business outfits (jacket, pants, shirt,
necktie) that match their preferences. During the first quarter, one store was closed. As a result, there were 573
stores at the end of the first quarter compared with 574 stores at the end of the previous fiscal year.
ORIHICA enlarged the lineup of Cool Biz suits and pants in its No-Iron Series. Two new stores were opened, andtwo were closed during the first quarter. As a result, there were 137 stores at the end of the first quarter comparedwith 137 stores at the end of the previous fiscal year.
Overall, first quarter sales were firm for women’s apparel but existing store sales were negatively affected by a shift
in business apparel styles and by unfavorable weather. As a result, sales in this segment decreased 4.8% to 25,852
million yen and there was an operating loss of 215 million yen compared with operating profit of 157 million yen in
the same period of the previous fiscal year.
Anniversaire and Bridal Business
ANNIVERSAIRE INC. operates guesthouse-style wedding and reception facilities. There were marketing and PR
activities centered on the distinctive concept of each location as well as the public’s image of the ANNIVERSAIRE
brand, which are key strengths of this business. In addition, social networking services were used to attract morecustomers. Despite these actions, the number of weddings decreased mainly because of market conditions for thebridal business in Japan.
Sales decreased 5.1% to 6,553 million yen and operating profit decreased 34.9% to 417 million yen.
Karaoke Facility Operations BusinessIn the karaoke business of VALIC Co., Ltd., there were many activities to make existing locations more appealing.
The new grand menu was expanded and more summer menu items were added. VALIC also strengthened activities
for increasing the number of members of the Platinum Club for seniors. During the first quarter, seven karaoke
facilities were closed for conversion into a café complex. As a result, there were 165 karaoke facilities at the end of
the first quarter compared with 172 at the end of the previous fiscal year.
Sales decreased 5.5% to 3,973 million yen and there was an operating loss of 202 million yen compared with anoperating loss of 192 million yen in the same period of the previous fiscal year.

2

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2019

Café Complex Operations BusinessIn the café complex business of VALIC Co., Ltd., cafés introduced a new grand menu and increased activities
involving the Hiyashimen (cold ramen) Fair. In July, cafés started installing high-performance personal computers.
VALIC opened one location and closed one location during the first quarter. As a result, there were 359 café
complexes at the end of the first quarter compared with 359 at the end of the previous fiscal year.
Sales increased 6.1% to 8,466 million yen due to increase in existing-store sales, and operating profit increased
332.3% to 387 million yen.
(2) Explanation of Financial Position
Balance sheet position
Starting with the beginning of the first quarter of the current fiscal year, AOKI Holdings is applying “Partial
Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ)
Statement No. 28, February 16, 2018). Prior-year figures have been adjusted retroactively to conform with thisaccounting standard in order to facilitate comparisons and analysis.
AssetsTotal assets at the end of the first quarter under review decreased 4,660 million yen from the end of the previous
fiscal year to 234,407 million yen due to seasonal factors.
Current assets decreased 4,914 million yen from the end of the previous fiscal year. There was a decrease of 5,414
million yen in accounts receivable-trade due to seasonal factors. Fixed assets increased 253 million yen. Tangible
fixed assets decreased 249 million yen due to amortization and other factors and guarantee deposits and leasehold
deposit decreased 220 million yen due to the return of deposits and other factors. There was an increase of 764
million yen in other under deferred tax assets (investments and other assets).
Liabilities
Current liabilities decreased 828 million yen from the end of the previous fiscal year. There was a decrease of 2,708
million yen in accounts payable-trade due to seasonal factors and an increase of 2,500 million yen in short-term debt.
Long-term liabilities decreased 1,493 million yen mainly due to a decrease of 1,000 million yen in long-term debt
resulting from the transfer of long-term debt to the current portion.
Net assets
Net assets decreased 2,338 million yen from the end of the previous fiscal year. There was a decrease of 2,200
million yen in retained earnings due to a loss attributable to owners of parent and dividend from surplus, and anincrease of 137 million yen in treasury stock due to stock repurchases.
(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 due to cost cutting measures inall businesses. In addition, business format changes to improve efficiency, closings of selected locations and otheractions in the karaoke facility operations business and café complex operations business have resulted in increases in
non-operating expenses and, due to asset impairment charges, in extraordinary losses. However, there are no changes
to the forecast that was announced on May 10, 2018.

3

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2019

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)First quarter of FY3/19(As of Jun. 30, 2018)

FY3/18(As of Mar. 31, 2018)
AssetsCurrent assets
Cash in hand and in banks

32,17530,687

Accounts receivable-trade

11,6596,244

Inventories

26,007

26,172Other current assets

8,431

10,256

Allowance for doubtful accounts

(35)

(37)

78,23873,323

Buildings and structures, net

60,58559,313

Land

36,952

36,952Other tangible fixed assets, net

14,131

15,153

Total tangible fixed assets

111,669

111,420

5,796

5,756

Total current assets
Fixed assets
Tangible fixed assets

Intangible fixed assets
Investments and other assets
Guarantee deposits

7,973

7,889

Leasehold deposit

20,61020,473

Other investments and other assets

14,83015,594

Allowance for doubtful accounts

(50)

(50)

Total investments and other assets

43,36443,907

160,829

161,083

239,068

234,407

19,812

17,104

Total fixed assets
Total assets
Liabilities
Current liabilities
Accounts payable-trade

-

2,500

Current portion of long-term debt

2,650

3,650

Accrued income taxes

2,593

216

Accrued bonuses for employees

1,978

941

Short-term debt

123

27

Other current liabilities

13,592

15,481

Total current liabilities

40,75039,921Long-term debt
Accrued retirement benefits for directors and statutory
auditors
Accrued costs for customer point program

36,47535,475

2,018

-

1,059

955

Net defined benefit liability

1,054

1,075

Asset retirement obligations

6,032

5,949

Other long-term liabilities

5,149

6,840

Total long-term liabilities

51,78950,296

92,53990,217

Accrued bonuses for directors and statutory auditors

Long-term liabilities

Total liabilities

4

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2019

(Millions of yen)First quarter of FY3/19(As of Jun. 30, 2018)

FY3/18(As of Mar. 31, 2018)
Net assets
Shareholders’ equity
Common stock

23,282

23,282

Capital surplus

27,833

27,833Retained earnings

100,299

98,098Treasury stock(5,376)(5,513)

Total shareholders’ equity

146,039

143,701

Unrealized gain on securities

588

578

Remeasurements of defined benefit plans

(187)

(170)

Total accumulated other comprehensive income

401

408

87

80

Accumulated other comprehensive income

Stock acquisition rights
Total net assets
Total liabilities and net assets

5146,528

144,190

239,068

234,407

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2019(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 FY3/18(Apr. 1, 2017 – Jun. 30, 2017)(Millions of yen)First three months of FY3/19(Apr. 1, 2018 – Jun. 30, 2018)46,254

44,834

Sales
Cost of sales

26,937

26,473Gross profit

19,316

18,360

Selling, general and administrative expenses

18,402

17,720914

640Operating profit
Non-operating profit
Interest income

27

28

Dividend income

25

26

Rental income on real estate

141

137

Other

44

39

Total non-operating profit

239

231

Interest expenses

86

78

Expenses on sub-leased real estate

114

114

Loss on disposal of fixed assets

16

289

Other

73

223

Total non-operating expenses

291

706

862

165

Gain on reversal of stock acquisition rights-

7

Total extraordinary gains-

7

Impairment loss

197

643

Total extraordinary losses

197

643

Profit (loss) before income taxes

664

(470)

Current income taxes

298

190

Deferred income taxes

40

(364)

Total income taxes

338

(173)

Profit (loss)

325

(296)

Profit (loss) attributable to owners of parent

325

(296)

Non-operating expenses

Ordinary profit
Extraordinary gains

Extraordinary losses

6

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2019

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)First three months of FY3/18(Apr. 1, 2017 – Jun. 30, 2017)(Millions of yen)First three months of FY3/19(Apr. 1, 2018 – Jun. 30, 2018)

325

(296)

Unrealized gain on securities

66

(9)

Remeasurements of defined benefit plans, net of tax

26

16

Total other comprehensive income

92

7

418

(289)

418

(289)

-

-

Profit (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, 2019(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
No reportable information.
Significant Changes in Shareholders’ Equity
First three months of FY3/19 (Apr. 1, 2018 – Jun. 30, 2018)
Purchase of treasury stock
AOKI Holdings has purchased 83,000 shares of its treasury stock pursuant to the resolution of the Board of
Directors on January 31, 2018. As a result, treasury stock increased 137 million yen during the first three months of
FY3/19 to 5,513 million yen at the end of the first quarter of FY3/19.

Changes in Accounting Policies
AOKI Holdings has decided to apply “Practical Solution on Transactions Granting Employees and Others Stock
Acquisition Rights, which Involve Considerations, with Vesting Conditions, etc.” (ASBJ Practical Issues Task Force(PITF) No. 36, January 12, 2018) from April 1, 2018 and to account for transactions granting employees and others
stock acquisition rights, which involve considerations, with vesting conditions in accordance with the “AccountingStandard for Stock Options” (ASBJ Statement No. 8, December 27, 2005) and related guidance.
However, when applying PITF No. 36, the Company complies with the transitional provisions in Paragraph 10, Item(3) of PITF No. 36 and continues to account for transactions that granted employees and others stock acquisitionrights, which involve considerations, with vesting conditions prior to the date of application of PITF No. 36 inaccordance with the previously adopted accounting procedures.

Additional Information
Application of Partial Amendments to Accounting Standard for Tax Effect Accounting
AOKI Holdings has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ
Statement No. 28, February 16, 2018) at the beginning of the first quarter of the current fiscal year. Accordingly,
deferred tax assets are reclassified and included in the investments and other assets section.
Termination of Directors’ Retirement Benefits
At the AOKI Holdings shareholders meeting in June 2018, shareholders approved a resolution to make final
retirement payments in conjunction with the termination of the retirement benefit program for directors and statutory
auditors of AOKI Holdings and its consolidated subsidiaries.
As a result, all accrued retirement benefits for directors and statutory auditors were reversed and eliminated at theend of the first quarter of the current fiscal year. The planned retirement benefit program termination payments of
1,700 million yen are included in other long-term liabilities.

8

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2019

Segment and Other Information
First three months of FY3/18 (Apr. 1, 2017 – Jun. 30, 2017)
1. Information related to sales and profit/loss for each reportable segment
Reportable segment
Karaoke
Café
Anniversaire
FacilityComplexand Bridal
Operations Operations

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

Total

Sales
External sales
Inter-segment sales
and transfers
Total

27,168

6,899

4,202

7,983

46,254-

46,254

1

2

0

-

4

(4)

-

27,169

6,902

4,203

7,983

46,259(4)

46,254

Segment profit (loss)
157
640
(192)
89
695
218
914
Notes: 1. The 218 million yen adjustment to segment profit (loss) includes 1,063 million yen in elimination for inter-segment
transactions, and -844 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 ANNIVERSAIRE and Bridal Business, the Karaoke Facility Operations Business andthe 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; impairment losses of 87 million yen, 4 million yen, 99
million yen and 6 million yen were booked respectively in the first three months of FY3/18.
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
Karaoke
Café
Anniversaire
FacilityComplexand Bridal
Operations Operations

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

Total

Sales
External sales
Inter-segment sales
and transfers
Total

25,851

6,542

3,973

8,466

44,834-

44,834

1

10

0

-

11

(11)

-

25,852

6,553

3,973

8,466

44,846(11)

44,834

Segment profit (loss)
(215)
417
(202)
387
387
252
640
Notes: 1. The 252 million yen adjustment to segment profit (loss) includes 1,103 million yen in elimination for inter-segment
transactions, and -850 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 Karaoke Facility Operations Business and the Café Complex Operations 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 to remain in the red; impairment losses of 81 million yen,
297 million yen, and 264 million yen were booked respectively in the first three months of FY3/19.
* 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.

9