Earnings Results Briefing for
the First Quarter of the Fiscal YearEnding March 31, 2017
August16 2016
KOMEHYO Co., Ltd.
Securities code: 2780 (Second Section, Tokyo and Nagoya Stock Exchanges)

The IR strategy department

TEL +81-52-249-5366

Note:This document is an English translation of a document prepared in Japanese.
Statements in this document that are not historical facts, including statements concerning thecurrent plans, forecasts, strategies, and beliefs of KOMEHYO Co., Ltd., are forward-looking statements
and subject to various risks and uncertainties.
These statements were prepared based on the assumptions of the management of KOMEHYO Co.,
Ltd. based on information currently available.
The actual results may differ significantly from the forecasts due to a variety of factors, andtherefore investors should not place undue reliance on them.
In addition, this document is not intended to solicit investment. Investors must make investment
decisions at their own discretion.

Overview of Income Statement
Consolidated

FY2016 1Q

FY2017 1Q

ChangeYoY

Net sales

10,374

9,153△1,22088.2％

Gross profit

3,1812,539△64279.8％

Gross profit margin30.7%

27.7%△3.0pt－SG&A expenses

2,488

2,595+106

104.3％

Operating income

692△55△748－

Ordinary income

695△68△764－

Net income attributableto owners of parent387△58△445－(Millions of yen)1

Overview of Income Statement
Non-consolidated

FY2016 1Q

FY2017 1Q

ChangeYoY

Net sales

9,264

8,052

△1,21186.9％

Gross profit

2,754

2,154

△599

78.2％

Gross profit margin

29.7%

26.8%

△2.9pt－SG&A expenses

2,101

2,225+123

105.9％

Operating income

653△70△723－

Ordinary income

668△77△746－

Net income

376△57△434－(Millions of yen)2

Operating income increase anddecrease factor（ Consolidated ）Operating692income(Millions of yen)

Sales amountdecrease

Advertising expenses +76
Personal expenses△２Rents+78△374

Gross profit
margin drop
△2670S, G&A
Expenses
increase△106

FY2016 1Q

Operating income(△748)△55
FY2017 1Q
3By Segment
FY2016 1Q

FY2017 1Q

YoY

9,421

8,181

86.8％

Operating income

686

△39－

Operating margin

7.3％

△0.5％

△7.8ptNet sales

930

948

102.0％

Operating income△1△21－

Operating margin

△0.1％

△2.3%

△2.4ptNet sales

3334

103.8％

Operating income

7573.7％

Operating margin

21.4％

15.2％

△6.2pt(Millions of yen)

Net sales
BrandFashion
Tire andWheel
Others4External Environment Economic Trend
Consumer spending was weak due to significant changes
in the economic environment
Net sales
YoY (%)

Department store net sales(nationwide)

130

Nikkei Stock Average(monthly closing price)

KOMEHYO net sales(non-consolidated)

Stock Price(yen)22,000Brexit shock120

20,000110

18,000100
100

16,00090
80

14,000China shock

12,000Declines in stock prices
Yen’s appreciation

7010,000

FY2017 1Q
608,000（Source：JAPAN DEPARTMENT STORES ASSOCIATION website）

5

Opening of New StoresOpened one store in Q1;planning to open large-scale stores in February and May 2017
【FY2017 1Q store open】【 FY2018 store open (planned)】

KOMEHYO
Purchasing Center
Shinjyuku
Minamiguchi
May28,2016(117m2)

KOMEHYO
Nagoya-eki StoreMay 2017(1,320m2)【FY2017 4Q store open (planned)】

KOMEHYO
Umeda StoreFebruary 2017
(1,318㎡)

6

Purchase from Individual Customers
Acquisition of new customers
through LINE De Satei in the future
Amount of purchasefrom individualcustomers
Purchasing
CenterHome delivery
Purchasing
Total(Millions of yen)

FY2016 1Q

FY2017 1Q

YoY

4,690

4,067

86.7％

22722297.9％

4,917

4,29087.2％【 LINE De Satei 】
started evaluating brand-nameproducts in June 2016
Responding to customer need thatthey want to know valuation first andare hesitant to ask for valuation only
at stores

7

Promotion
Promoted initiatives to increase brand recognition,
as well as sales and purchases focusing mainly on the Kanto area
【 Sponsoring an SNS linked TV Program“#モデる [modeling]” 】
On air from April 3, 2016
Started sponsoring a new TV program by TV
Asahi “#モデる” (Sundays, 23:10-23:15）【TVCM「LINE De Satei」】
On air since June 2016
Promoting LINE De Satei with rap messages→ Average valuations approaching
300 items/day from June 20 to 30

8

Online Sales
Increased sales from other companies’ websites
by promoting cross-border EC and other approaches
Net sales

FY2017 1Q(Millions of yen)

Composition

YoY

KOMEHYO website ※１360

27.2％

85.3％

Back orders

※２781

59.0％

96.2％

Other※３182

13.8％115.8％

1,325

100.0％

95.1％

Total
KOMEHYO apps
App that can be used as a member
card of KOMEHYO Co., Ltd.
Outstanding points, purchasing
history, selling history , and otherinformation can be checked※1 KOMEHYO website
Order/settlement via komehyo.jp※２ Back orders
・Customers specify a store to do back orders online
・Store staff suggest/back order products to suit customer needs※３ Other
Order/payment via other companies’ websites, such as Rakuten
Ichiba, Yahoo!, Amazon, and eBay stores

9Tire and Wheel
Sales for customized car parts (car height control) were strong

FY2017 1Q

Net sales(Millions of yen)

Composition

YoYTires/wheels

749

79.0％

99.6％

Parts

190

20.1％

114.6％

Others

80.9％

72.4％

948

100.0％

102.0％

Segment total

10

Revised H1 plan/FY2017 plan
Plans were revised downwards
in anticipation of challenging conditions continuing
Consolidated(Millions of yen)

Revised H1 planYoY change Revised FY2017 PlanYoY change

Net sales

18,50088.4％

41,50090.4％

Operating income

△143－

1,230

44.1％

Ordinary income

△157－

1,230

44.9％

Net income attributableto owners of parent△160－

840

49.5％

YoY change Revised FY2017 planYoY changeNon-consolidated(Millions of yen)

Revised H1 plan

Net sales

16,50087.7％

36,00088.8％

Operating income

△175－

850

35.0%

Ordinary income

△177－

850

35.4%

Net income

△165－

550

37.2% 11

Future tasks ①
Temporary revision of strategies
in response to changes in the external environment

Expansion/growth
Initiative 1.
Shift focus fromnet sales to grossprofit margin

Increasing profitability

Increasing purchases and sales of products
which are easy to relatively secure a gross margin
Increasing purchases from individual customers
and companies, as well as the accuracy ofinventory control based on data

12Future tasks ②
Temporary revision of strategies
in response to changes in the external environment

Expansion/growth
Initiative 2.
Strengthenacquisitions of
new customers

Increasing profitability

Promotions focusing on LINE De Satei

Enhancing visual product display at stores
Frequent updating of blog on the KOMEHYO website

13Future tasks ③
Temporary revision of strategies
in response to changes in the external environment

Expansion/growth
Initiative 3.
Promote returnvisits by existingcustomers

Increasing profitability

Managing customer information andenhancing relationships with customers
through direct mailings and other approaches
Enhancing customer service approach mainly
for store staff

14

Future tasks ④
Temporary revision of strategies
in response to changes in the external environment

Expansion/growth
Initiative 4.
Increasepurchases fromindividual
customers

Increasing profitability

Assigning experienced buyers to stores
Enhancing OJT to train buyers
Frequently confirming market price with theproduct management department

15