Don Quijote Holdings. Co., Ltd.

1H Results for FY 2016
Earnings Results
July 1 - December 31, 2015

February 5 ,2016

0Earnings summary
Consolidated(Millions of yen)

6 months to Dec. 2015
ActualShare

YoY

6 months to Dec. 2014
ActualShare

Net sales

384,445100.0%

112.3%

342,224100.0%

Gross profit

102,94126.8%

112.3%

91,634

26.8%

SGA

77,37020.1%

113.4%

68,22320.0%

Operating profit

25,571

6.7%

109.2%

23,411

6.8%

Recurring profit

25,873

6.7%

107.6%

24,044

7.0%

Profit attributable toowners of parent

14,2323.7%

103.9%

13,694

4.0%

90.05

-

103.3%87.21-

EPS(Yen)• Consolidated and same store sales went up 12.3% and 5.3% YoY respectively. We enjoyed greater sales in daily necessities asconsumers got more price sensitive reflecting the negative expenditures. We successfully expanded the sales of Halloween goods, andthere were more repeat tourist customers and inbound sales became greater contributor. Stagnant consumption and bad weather
became headwinds for Q2, but we expanded the market share by attracting tourists and domestic family customers.
• GPM was flat YoY. We expanded daily necessities’ sales with low margin and high inventory turnover, and there were aggressive writedowns of slow-moving inventories, however seasonal items such as winter apparels were affected by the bad weather and unusuallyhigh temperature.
• SGA was within our expectation. It increased due to up-front investments for new stores such as personnel, depreciation expenses.
We are increasing the headcount in existing stores to deal with more man-hour triggered by change in sales-mix.
• 1H profits hit all time high.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

1Same-store sales
125.0%

120.0%= Customer traffic= All stores= Customer spending= Existing stores

115.0%

110.0%

105.0%

100.0%

95.0%

90.0%

85.0%
2013
Jun.

Existing stores

2013
Dec.

2014
Jun.

2014
Dec.

2015
Jun.

2015
Dec.

2014 Oct.

Nov.

Dec.

2015 Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Sales

108.3%

107.1%

104.3%

106.7%

109.4%

89.5%

114.2%

108.5%

104.4%

108.1%

107.3%

105.3%

106.8%

102.4%

102.5%Customer traffic

105.2%

103.8%

100.0%

101.2%

105.6%

94.6%

105.3%

103.2%

99.8%

102.0%

101.7%

99.1%

102.8%

98.2%

100.0%

Customer spending

102.9%

103.1%

104.2%

105.4%

103.7%

94.6%

108.5%

105.1%

104.6%

106.0%

105.5%

106.3%

103.9%

104.3%

102.6%

Existing store count

195

196

200

203

204

205

205

207

208

207

209

212

214

216

218

• DQ SSS were up 5.3% for six-month period from July to December, which were better than our guidance.
• Our Sales promotion measures based on the current consumer behavior went quite successful, while ASP rose. Fast-growing inboundtourists’ consumption boosted our sales.

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

2

Sales breakdown by product category
6 months to Dec. 2015

Consolidated(Millions of yen)

ActualShare

YoY

6 months to Dec. 2014
ActualShare

Home electrical appliances

31,2138.1%

106.7%

29,256

8.6%

Miscellaneous household goods

78,33520.4%

115.5%

67,817

19.8%

Foods

118,45130.8%

116.6%

101,604

29.7%

Watches & fashion merchandise

80,29020.9%

106.0%

75,766

22.1%

Sporting goods & leisure goods

29,8997.8%

116.1%

25,745

7.5%

Other products

33,221

8.6%

110.1%

30,173

8.8%

Total retail store business

371,40996.6%

112.4%

330,361

96.6%

Rent income

9,737

2.5%

108.5%

8,972

2.6%

Other business

3,299

0.9%

114.1%

2,892

0.8%

384,445100.0%

112.3%

342,224100.0%

Total

Home appliances : Smart phone accessories and POSA cards took the lead. Personal-care items and white goods were robust.
Household goods : Cosmetics and drugs contributed even better thanks to fast-growing tourists’ sales. Daily consumables became
more popular among families. Kitchen goods such as knives and pans went up.
Foods: All product groups achieved high growth. Daily delivered food became more popular as being price competitive.

Watches & Fashion : Sales were solid in luxury watches though winter apparels were slow because of high temperature.

Bags and shoes were good.
Sports & Leisure ： Halloween costumes surged, workout equipments and toys were strong.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

3

The number of stores(Number of stores)

FY2014FY2015FY2016-1Q

FY2016-2Q

Don Quijote

174183

182

184

MEGA

37363637

New MEGA

28414548Others

30323436Total stores in Japan

269292297

305

Overseas14141414Grand Total

283306311

319

Domestic opening

2233

69

Domestic closure

510

111723

58Net increase• 15 new stores opened in 1H : 3 Don Quijote, 6 New MEGA, 1 MEGA, 1 Picasso, 2 Kyoyasudo, 1 Ekidonki and 1 Doit.
• 2 DQ stores were closed.
• Full year store opening plan is up-revised to 35 stores.

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

4

Key components in SG&A
Consolidated(Millions of yen)

6 months to Dec. 2015
ActualShare

YoY

6 months to Dec. 2014
ActualShare

Net sales

384,445100.0%

112.3%

342,224100.0%

Salary allowance

28,9207.5%

118.9%

24,332

7.1%

Rent

10,2372.7%

111.6%

9,170

2.7%

Commission paid

8,815

2.3%

113.1%

7,791

2.3%

Depreciation and amortization

6,149

1.6%

114.5%

5,370

1.6%

Others23,2496.0%

107.8%

21,560

6.3%

SGA

77,37020.1%

113.4%68,223

20.0%• SGA to sales ratio went down 0.1pts to 20.1%. Cost increased due to initial cost of new store openings such as supplies
expenses and depreciation expenses.
• SGA was within our expectation though personnel cost and depreciation expenses went up, we are increasing theheadcount in existing stores to deal with more man-hour triggered by change in sales-mix.

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

5

Sales and profit by business（Millions of yen）

Sales, profit and loss by segment from Jul. 1, 2015, to Dec. 31, 2015
Consolidated

Retail store

Rent income

371,409

9,737

3,299

7

8,762

Total

371,416

Segment profit

15,393

Sales to external customers
Internal sales or transfers
between segments

Others

Total

Adjusted amount

Consolidated

384,445-

384,445

3,747

12,516(12,516)-

18,4997,046

396,961(12,516)

384,445

7,129

3,266

25,788(217)

25,571（Millions of yen）

Sales, profit and loss by segment from Jul. 1, 2014, to Dec. 31, 2014
Consolidated
Sales to external customers

Retail store

Rent income

330,361

8,972

2,891

7,373

Internal sales or transfers
between segments-

Others

Total

Adjusted amount

Consolidated

342,224-

342,224

2,959

10,332(10,332)

-

Total

330,361

16,3455,850

352,556(10,332)

342,224

Segment profit

14,954

6,041

2,604

23,599(188)

23,411z

Profit in the retail business was 15.4 billion yen which is our mainstay.

• Profit in the tenant leasing business was 7.1 billion yen.
• Profit in other business was 3.3 billion.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

6Sales, profit and asset by subsidiaries（Millions of yen）

Sales, profit and asset by subsidiaries from Jul. 1, 2015, to Dec. 31, 2015
Consolidated

Don Quijote 1)

DoitNagasakiya 2)

Overseas 3)

OthersElimination

Consolidated

Net sales

270,793

8,291

79,453

19,93938,200(32,231)384,445

Operating profit

14,545

452

2,405

819

13,713(6,363)25,571

Total asset

205,606

22,04979,92422,070695,541(464,790)

560,400

Net asset

104,167

18,75245,06015,980331,853(280,841)

234,971

PL/1USD=\121.7
BS/1USD=\120.3（Millions of yen）

Sales, profit and asset by subsidiaries from Jul. 1, 2014, to Dec. 31, 2014
Consolidated

Don Quijote 1)

DoitNagasakiya 2)

Overseas 3)

OthersElimination

Consolidated

Net sales

237,703

9,171

77,14916,481

25,118(23,398)342,224

Operating profit

14,010

333

2,215

672

9,843

(3,662)

23,411

Total asset

181,346

22,20575,877

17,260439,696(246,918)

489,466

Net asset

93,93618,48942,736

13,532

140,594(101,005)

208,2821) According to the change in pure holdings firm, Don Quijote is simply added both Don Quijote and Don Quijote HD by split2) Nagasakiya shows only retail business

PL/1USD=\103.6
BS/1USD=\109.53) Overseas includes DQ USA and MARUKAI• Retail businesses were strong including Don Quijote, Nagasakiya, Doit and Overseas. Profitability of those companies
had improved.

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

7

Balance Sheet

Consolidated
Total current assets（Millions of yen）
As of Dec. 31, Change from2015
Jun. 30, 2015
212,987
37,006

Consolidated
Total current liabilities（Millions of yen）
As of Dec. 31, Change from2015
Jun. 30, 2015
184,704
40,128Cash and deposits

68,685

18,968

Accounts payable

84,167

23,611

Merchandise

107,451

12,871

Short-term liabilities*

56,893

18,295

347,413

17,728

Total noncurrent liabilities

140,725

1,002

276,187

14,060Long-term bonds

56,704(5,986)

Buildings

100,250

4,229

Long-term borrowings

35,156

10,000Land

159,933

9,286

Long-term payables
under fluidity lease receivables

30,463(3,560)17,373(156)

Total liabilities

325,429

41,130

7,191

(218)

Net assets

234,971

13,60453,853

3,824

Total shareholders' equity

221,841

12,15933,517700

Non-controlling interests

10,704

1,691

560,400

54,734

Liabilities and net assets

560,400

54,734

Total noncurrent assets
Total property, plant and equipment

Total intangible assets
Goodwill
Total investments and other assets

Lease and guarantee deposits

Total assets* Short-term liabilities = Short-term loans payable + Current portion of long-term loans payable + Current portion of bonds• Cash & deposits : Outstanding amount was increased by financing through debt for new store openings.
• Merchandise : Inventories increased due to new stores. More inventories had secured for existing stores to avoid opportunity losses
for growing inbound sales and year-end shopping needs.
• Payables associated with the liquidation of receivables : 37.6 billion yen was financed by asset-backed loans.

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

8

Cash flows and Capital expenditure（Millions of yen）

Consolidated Cash Flows

Cash and equivalents at beginning of period
Cash flows from operating activitiies
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in cash and equivalents
Cash and equivalents at end of period

6 months to Dec.
2015

6 months to Dec.
2014

51,29233,605(26,443)
15,902
22,826
74,11844,10523,651(29,558)
5,248
(204)
43,901

Cash flows*
Net increase (decrease)

7,187
9,954
3,115
10,654
22,62230,217（Millions of yen）

Consolidated Capital Expenditures

Capital expenditures

Change6 months to Dec.
2015

6 months to Dec.
2014

23,836
19,314(4,522)

27,23017,940(9,290)Change(3,394)
1,374
4,768

* Cash flows = Net income + Depreciation and amortization + Extraordinary loss - Dividend• Cash flow from operating activities was 33.6 billion yen positive.
Positive factors : 24.9 billion yen of income before income taxes and minority interests, 7.1 billion yen of depreciation andamortization, 23.6 billion yen increase in trade payables. Negative factor : 12.9 billion yen increase in inventory, 10.2 billion yen for tax
payment.
• Cash flow from financing activities was 15.9 billion yen positive driven by 20.8 billion yen of net increase in long and short term loansand 1.5 billion yen of net increase of bonds. 3.8 billion yen of repayments of payables under fluidity lease receivables and 2.4 billion
yen of dividend payment were negative factors.
• Capex was 23.8 billion yen, free cash flow was negative 4.5 billion yen due to aggressive reinvestment.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

9Earnings summary for Q2
Consolidated(Millions of yen)

3 months to Dec. 2015
Actual3 months to Dec. 2014

Share

YoY

ActualShare

Net sales

197,803100.0%

110.9%

178,363100.0%Gross profit

53,26326.9%

112.4%

47,39926.6%

SGA

38,98819.7%

113.2%

34,444

19.3%

Operating profit

14,2757.2%

110.2%

12,955

7.3%

Recurring profit

14,2967.2%

108.1%

13,222

7.4%

Profit attributableto owners of parent

7,751

3.9%

102.6%

7,553

4.2%

EPS(Yen)

49.03-102.0%

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

48.06

10

Sales breakdown by product category for Q2
Consolidated(Millions of yen)

3 months to Dec. 2015
ActualShareYoY

3 months to Dec. 2014
ActualShareHome electrical appliances

16,6548.4%

101.6%

16,386

9.2%

Miscellaneous household goods

39,65820.0%

116.9%

33,914

19.0%

Foods

61,65231.2%

116.7%

52,82929.6%

Watches & fashion merchandise

41,41520.9%

104.7%

39,54522.2%

Sporting goods & leisure goods

15,2097.7%

104.6%

14,537

8.2%

Other products

16,4888.4%

108.8%

15,151

8.4%

Total retail store business

191,07696.6%

110.9%

172,362

96.6%

Rent income

5,018

2.5%

110.9%

4,523

2.5%

Other business

1,709

0.9%

115.6%

1,478

0.8%

197,803100.0%

110.9%

178,363100.0%

Total

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

11

Key components in SG&A for Q2
Consolidated(Millions of yen)

3 months to Dec. 2015
ActualShare

YoY

3 months to Dec. 2014
ActualShare

Net sales

197,803100.0%

110.9%

178,363100.0%

Salary allowance

14,7647.4%

119.5%

12,352

6.9%

Rent

5,084

2.6%

109.9%

4,626

2.6%

Commission paid

4,562

2.3%

110.5%

4,130

2.3%

Depreciation and amortization

3,171

1.6%

114.8%

2,762

1.6%

Others

11,4075.8%

107.9%

10,574

5.9%

SGA

38,98819.7%

113.2%

34,44419.3%

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

12Full year forecast for fiscal June 2016
Consolidated

FY2016 Revised forecast(Millions of yen)

Plan

Share

YoY

FY2016 Previous forecast
Plan

ShareNet sales

750,000

100.0%

109.7%

730,000

100.0%

Gross profit

200,000

26.7%

110.0%

196,800

27.0%

SGA

159,000

21.2%

111.5%

157,000

21.5%

Operating profit

41,0005.5%

104.9%

39,800

5.5%

Recurring profit

41,5005.5%

103.3%

40,8005.6%

Net profit23,400

3.1%

101.1%

23,300

3.2%

EPS(Yen)148.00-100.7%

147.55-

Capital expenditure

40,000-133.7%

40,000-Depreciation

12,8001.7%

109.7%

12,8001.8%• Full year forecast revised upward for 7 consecutive years. Sales : 750 billion yen, up 20 billion and 9% YoY. OP : 41billion, up 4%, RP : 41.5 billion, up 3%, NP : 23.4 billion, up 1%.
• Don Quijote SSS forecast : +2.7% YoY for full year, +5.3% YoY for 1H, flat for 2H.

Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

13