Don Quijote Holdings. Co., Ltd.

Results for FY 2016
Earnings Results
July 1, 2015 - June 30, 2016

August 17, 2016

0Earnings summary
Consolidated(Millions of yen)

12 months to Jun. 2016
ActualShare

YoY

12 months to Jun. 2015
ActualShare

Net sales

759,592

100.0%

111.1%

683,981100.0%

Gross profit

201,89326.6%

111.1%

181,741

26.6%

SGA

158,70820.9%

111.3%

142,638

20.9%

Operating profit

43,1855.7%

110.4%

39,103

5.7%

Recurring profit

43,7975.8%

109.1%

40,160

5.9%

Profit attributable toowners of parent

24,938

3.3%107.7%

23,148

3.4%

EPS(Yen)

157.76-107.3%

147.09-• Consolidated and same store sales went up 11.1% and 4.5% YoY respectively. We avoided opportunity losses by expanding daily
necessities because customers became more price-conscious after autumn 2015. We successfully increased the wallet share of family
customers by being price competitive in each catchment area.
• GPM was flat YoY. Product mix shift boosted SSS, but it dampened GPM temporarily. Sales growth brought GP increase as we planned.
Spot procurement and precise price control contributed to improve GPM. Write-downs of slow-moving inventories went smoothly.
• Aggressive new store openings triggered the rise in personnel, supplies expense and depreciation. We increased the headcount to deal
with sales-mix shift and tax-free procedure for tourists. The rise of cost, however, was more than offset by the sales growth and excellent
cost management.
• Sales and OP went up by 10.4%, beat the consensus estimate, marking the 27th consecutive sales and OP growth.
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
Dec.

Existing stores

2014
Jun.

2014
Dec.

2015
Jun.

2015
Dec.

2016
July.

2015 May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

2016 Jan.

Feb.

Mar.

Apr.

May.

June.

July.

Sales

108.5%

104.4%

108.1%

107.3%

105.3%

106.8%

102.4%

102.5%

105.9%

105.8%

101.9%

105.4%

101.3%

102.4%

103.7%

Customer traffic

103.2%

99.8%

102.0%

101.7%

99.1%

102.8%

98.2%

100.0%

102.0%

102.6%

99.2%

101.1%

98.2%

99.9%

101.9%

Customer spending

105.1%

104.6%

106.0%

105.5%

106.3%

103.9%

104.3%

102.6%

103.9%

103.1%

102.8%

104.2%

103.1%

102.5%

101.8%

Existing store count

207

208

207

209

212

214

216

218

221

220

222

223

226

232

236

• DQ SSS went up 4.5%, traffic +0.5% and spending +3.9% for FY June 2016.
• Domestic customers became more price conscious. Chinese professional buyers decelerated inbound consumption.
MD structure change and localization strengthened customer base.

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

2

Sales breakdown by product category
12 months to Jun. 2016

Consolidated(Millions of yen)

ActualShare

YoY

12 months to Jun. 2015
ActualShare

Home electrical appliances

60,9788.0%

107.3%

56,842

8.3%

Miscellaneous household goods

157,28820.7%

114.6%

137,260

20.1%

Foods

242,21531.9%

116.1%

208,541

30.5%

Watches & fashion merchandise

154,183

20.3%

104.6%

147,462

21.6%

Sporting goods & leisure goods

51,7226.8%

109.3%

47,310

6.9%

Other products

66,9478.8%

107.1%

62,516

9.1%

Total retail store business

733,33396.5%

111.1%

659,931

96.5%

Rent income

19,781

2.6%

108.7%

18,200

2.7%

Other business

6,478

0.8%

110.7%

5,850

0.8%

759,592

100.0%

111.1%

683,981100.0%

Total

Home appliances : POSA cards and smart phone accessories were the two biggest earners. Headsets and mobile appliances were strong.
Household goods : Consumables attracted domestic customers while cosmetic and drugs were popular among tourists.
Foods: Daily delivered food such as eggs and milk took the lead. Product groups across the board achieved high growth.

Watches & Fashion : Slow broker purchase decelerated luxury watches in tax-free sales. Domestic consumption for high-end items hadbottomed out. All-season items such as bags and shoes were robust.
Sports & Leisure ： Sales skyrocketed thanks to seasonal event goods such as party costumes. Workout equipments greatly contributed.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

3

The number of stores(Number of stores)

FY2014FY2015FY2016

Don Quijote174183

194

MEGA373639New MEGA

284155

Others30

32

39

Total stores in Japan

269

292

327

Overseas141414Grand Total

283

306

341

Domestic opening

223340

Domestic closure5105172335

Net increase• A record 40 new stores were opened : 15 Don Quijote, 13 New MEGA , 3 MEGA, 2 Kyoyasudo, 2 Doit and 5 small format.
• 5 stores were closed. 3 closed for lease termination, 1 for format conversion and 1 for renewal construction.
• The number of new stores was more than initially planned backed by the greater-than-expected vacated properties.

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

4

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

12 months to Jun. 2016
ActualShare

YoY

12 months to Jun. 2015
ActualShare

Net sales

759,592

100.0%

111.1%

683,981100.0%

Salary allowance

59,2397.8%

115.8%

51,158

7.5%

Rent

20,8382.7%

109.2%

19,088

2.8%

Commission paid

18,3092.4%

110.5%

16,563

2.4%

Depreciation and amortization

13,3011.8%

114.0%

11,672

1.7%

Others47,021

6.2%

106.5%

44,157

6.5%

SGA

158,70820.9%

111.3%

142,63820.9%• SGA to sales ratio was flat YoY.
• Aggressive new store openings triggered the rise in personnel, supplies expense and depreciation.
We increased the headcount to deal with sales-mix shift and tax-free procedure for tourists.
The rise of cost, however, was more than offset by the sales growth and excellent cost management.

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 Jun. 30, 2016
Consolidated

Retail storeRent income733,333

19,781

6,478

16

18,026

Total

733,349

Segment profit

22,746

Sales to external customers
Internal sales or transfers
between segments

Others

Total

Adjusted amount

Consolidated

759,592-

759,592

8,486

26,528(26,528)-

37,807

14,964

786,120(26,528)

759,592

14,1596,733

43,638(453)

43,185（Millions of yen）

Sales, profit and loss by segment from Jul. 1, 2014, to Jun. 30, 2015
Consolidated

Retail store

Rent income

659,931

18,2005,850

315,796

Total

659,934

Segment profit

21,417

Sales to external customersInternal sales or transfers
between segmentszOthers

Total

Adjusted amount

Consolidated

683,981-

683,981

6,308

22,107(22,107)-

33,996

12,158706,088(22,107)683,981

12,714

5,372

39,503(400)

39,103

Profit in the retail business was 22.7 billion yen which is our mainstay.

• Profit in the tenant leasing business was 14.2 billion yen.
• Profit in other business was 6.7 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 Jun. 30, 2016
Consolidated

Don Quijote 1)

Doit

Nagasakiya 2)

Overseas 3)

Accretive 4)

JAM 4)

Consolidated

Net sales

532,671

16,403

157,101

40,706

4,834

16,940759,592

Operating profit

20,431

1,004

3,923

2,281

1,911

6,970

43,185

Total asset

225,968

22,63875,635

21,455

21,911109,027

560,568

Net asset

109,295

18,907

46,242

16,061

8,216

14,734

244,547

PL/1USD=\119.99
BS/1USD=\112.69（Millions of yen）

Sales, profit and asset by subsidiaries from Jul. 1, 2014, to Jun. 30, 2015
Consolidated

Don Quijote 1)

Doit

Nagasakiya 2)

Overseas 3)

Accretive 4)

JAM 4)

Consolidated

Net sales

471,542

17,438150,639

36,4493,800

14,228683,981

Operating profit

20,225

566

3,984

1,647

1,580

5,843

39,103

Total asset

182,387

21,78072,82421,751

23,15293,003505,666

Net asset

98,78818,48344,254

15,525

6,238

9,000

221,367

1) Figures show the results of retail business at DQ. 2) Nagasakiya shows only retail business3) Overseas includes DQ USA and MARUKAI

PL/1USD=\110.64
BS/1USD=\120.284) Sales and OP for Accretive and JAM are the results in the year ended June 2016. Total and net asset figures are as of June 30,2016.

• The rise in cost was more than offset by the sales growth in Don Quijote, Nagasakiya with finely-tuned cost management.
• Doit and Overseas improved profitability as being more efficient.

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

7

Balance Sheet（Millions of yen）
As of Jun. 30, Change from2016
Jun. 30, 2015
195,977
19,996

Consolidated
Total current assets

Consolidated
Total current liabilities（Millions of yen）
As of Jun. 30, Change from2016
Jun. 30, 2015
147,995
3,419

Cash and deposits

42,894(6,823)

Accounts payable

70,194

9,638

Merchandise

117,400

22,820

Short-term liabilities*

32,924(5,674)

364,591

34,906

Total noncurrent liabilities

168,026

28,303292,052

29,925Long-term bonds

76,471

13,781

Buildings

108,114

12,093Long-term borrowings

45,082

19,926

Land

165,185

14,538Long-term payables
under fluidity lease receivables

26,876(7,147)

17,005(524)

Total liabilities

316,02131,722

6,852(557)

Net assets

244,547

23,18055,534

5,505

Total shareholders' equity

231,788

22,10635,645

2,828

Non-controlling interests

12,996

3,983

560,568

54,902

Liabilities and net assets

560,568

54,902

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 : Aggressive new store openings were financed by bank borrowings and straight bonds while trying to improvegroup-wide cash efficiency.
• Merchandise: Inventories increased as record 40 new store opened and 108 thousand square meters were added.
Sales opportunities expanded by having more inventories.

• Payables associated with the liquidation of receivables : 34.0 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
12 months to Jun.
2016Cash 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

12 months to Jun.
2015

51,292
29,110(52,197)
17,148(6,796)44,49644,10542,520(52,641)
16,176
7,187
51,292

12 months to Jun.
2016
Cash flows*
Net increase (decrease)

7,187(13,410)444
972(13,983)(6,796)（Millions of yen）

Consolidated Capital Expenditures

Capital expenditures

Change12 months to Jun.
2015

51,57036,881(14,689)

52,72734,646(18,081)

Change(1,157)
2,235
3,392

* Cash flows = Net income + Depreciation and amortization + Extraordinary loss - Dividend• Cash flow from operating activities was 29.1 billion yen positive.
Positive factors : 42.1 billion yen of income before income taxes and minority interests, 15.1 billion yen of depreciation and amortization,
9.7 billion yen increase in trade payables. Negative factors : 23 billion yen more in inventories and 17.8 billion yen for tax payment.
• Cash flow from financing activities was 17.1 billion yen positive driven by 20.8 billion yen of net increase of long-term borrowings and7.5 billion yen of corporate bond issued. 3.2 billion yen of dividend payment were negative factors.
• Capex was 51.6 billion yen to acquire properties for new stores for this year and years afterwards.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

9

Earnings summary for Q4
Consolidated(Millions of yen)

3 months to Jun. 2016
Actual3 months to Jun. 2016

Share

YoY

ActualShare

Net sales

190,045100.0%

109.2%

174,061100.0%

Gross profit

49,75926.2%

112.6%

44,20925.4%

SGA

41,51121.8%

107.0%

38,794

22.3%

Operating profit

8,248

4.3%

152.3%

5,415

3.1%

Recurring profit

8,548

4.5%

159.6%

5,357

3.1%

Profit attributableto owners of parent

5,206

2.7%

169.9%

3,065

1.8%

EPS(Yen)

32.93-

170.1%

19.36-

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

10

Sales breakdown by product category for Q4
Consolidated(Millions of yen)

3 months to Jun. 2016
ActualShare

3 months to Jun. 2015
YoY

ActualShareHome electrical appliances

14,3157.5%

108.9%

13,151

8.6%

Miscellaneous household goods

40,55921.3%

100.8%

40,251

19.8%

Foods

62,96433.1%

114.7%

54,91831.0%

Watches & fashion merchandise

37,97620.0%

108.2%

35,108

20.8%

Sporting goods & leisure goods

11,634

6.1%

123.5%

9,424

5.9%

Other products

15,9588.4%

105.4%

15,136

10.2%

Total retail store business

183,406

96.5%

109.2%

167,988

96.5%

Rent income

5,090

2.7%

109.9%

4,632

2.7%

Other business

1,549

0.8%

107.5%

1,441

0.8%

190,045100.0%

109.2%

174,061

100.0%

Total

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

11

Key components in SG&A for Q4
Consolidated(Millions of yen)

3 months to Jun. 2016
ActualShare

YoY

3 months to Jun. 2015
ActualShare

Net sales

190,045100.0%

109.2%

174,061

100.0%

Salary allowance

15,1838.0%

108.5%

13,988

8.0%

Rent

5,423

2.9%

107.5%

5,044

2.9%

Commission paid

4,959

2.6%

102.4%

4,841

2.8%

Depreciation and amortization

3,741

2.0%

114.9%

3,257

1.9%

Others

12,2066.4%

104.6%

11,664

6.7%

SGA

41,51121.8%

107.0%

38,79422.3%

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

12Forecast for fiscal June 2017
FY2017 Forecast

Consolidated(Millions of yen)Plan

FY2017 1H Forecast

Share

YoY

Plan

Share

YoY

Net sales

820,000

100.0%

108.0%

415,000

100.0%

107.9%

Gross profit

220,000

26.8%

109.0%

111,500

26.9%

108.3%

SGA

175,000

21.3%

110.3%

85,50020.6%

110.5%

Operating profit

45,0005.5%

104.2%

26,0006.3%

101.7%

Recurring profit

45,5005.5%

103.9%

26,2006.3%

101.3%Net profit

26,8003.3%

107.5%

14,5003.5%

101.9%EPS(Yen)169.50-107.5%

91.71-

101.8%

Capital expenditure

45,000-

87.3%

--

-

Depreciation

14,7001.8%

110.5%---• Full year forecast : Sales 820 billion yen, OP : 45 billion, RP : 45.5 billion, NP : 26.8 billion.
• Don Quijote SSS forecast : DQ SSS forecast : -0.5% in 1H, +0.6% in 2H and flat for full year.

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

13