Pan Pacific International Holdings Corporation
Results for FY 2019
Earnings Results
July 1, 2018 – June 30, 2019
August 13, 2019

Earnings summary
12 months to June 2019

Consolidated(Millions of yen)

Actual12 months to June 2018

Share

YoY

ActualShare

Net sales

1,328,874

100.0%

141.1%

941,508

100.0%

Gross profit

370,52727.9%

151.9%

243,991

25.9%

SGA

307,41723.1%

159.8%

192,423

20.4%

Operating profit

63,1104.7%

122.4%

51,568

5.5%

Recurring profit

68,2405.1%

119.3%

57,218

6.1%

Profit attributable toowners of parent

48,253

3.6%

132.5%36,405

3.9%

EPS(Yen)304.93–132.5%

230.14-z Consumption environment clearly changed in October 2018 with sluggish consumer sentiment and a series of unfavorable weather.
PPIH focused on being more competitive in each commercial area to prepare the upcoming consumption tax hike.
Tax-free sales delivered very strong momentum beating the last year’s sales for 57 consecutive months.
SSS for Don Quijote went up by 1.2% (0.2pts came from domestic, 1.0pt from tax-free). Nagasakiya SSS: +0.4pts, UNY SSS:0.7%.
● Gross profit and margin went up due mainly to the consolidation of UNY group. Right pricing strategy was executed to deal
with the consumers’ price-consciousness.
● SG&A went up due in part to rise in personnel cost and commission paid. The consolidation of UNY pushed up total SG&A.ratio.
z Operating profit and net profit surged. Net profit grew for 10 consecutive years while sales and OP grew for 30 years.

1Same-store sales (Don Quijote Co., Ltd.)
110.0%

Same Store Sales
Spending
Traffic

105.0%

100.0%

95.0%
2017.Jan.

2017.Jul.

Comparable stores
Sales (%)
Customer traffic (%)

2018Jan.

2017.Dec.

2018.Jun.

2018.Dec.

2019.Jun.

Nov.

Dec.

2019
Jan.

Feb.

Jun.

Jul.

103.0 103.6 105.2 103.1 101.6 104.4 100.0 101.4 103.5 100.4 100.5

98.8

99.7

101.6 104.1 102.1 102.2 100.9

95.7

101.3 101.3 102.5 101.1

Feb.

Mar.

Apr.

May.

Oct.

Mar.

Apr.

May.

97.7

99.7

100.5 102.2 101.3 103.1 101.0

96.5

Customer spending (%)

101.6 102.3 102.6 101.9 102.2 103.5 101.2 101.5 105.0

98.7

101.0 101.1

99.9

101.0 101.8 100.9

99.2

99.9

99.1

Comparable store count278291294301

301

296

297

297

283

283

288

99.9

Sep.

99.6

280

98.9

Aug.

101.7

278

100.9

Jul.

98.6

278

99.4

Jun.

291

283

299

301

295

z DQ SSS went up 1.2% (0.2 pts came from domestic sales and 1.0pts came from tax-free sales), traffic went up 0.3% and spending
went up 0.9% for FY June 2019, beat the high bar of last year (4.1% growth yoy).
z A series of natural disasters and unusual temperature affected the traffic and sales for seasonal items, however, the sales for
consumable items delivered a strong sales momentum.

2

Sales breakdown by product category
12 months to June 2019

Consolidated(Millions of yen)

ActualShare

12 months to June 2018
YoY

ActualShare

Other products

80,125
231,835
350,897
162,397
55,88915,44896,99622,337

6.0%
17.5%
26.4%
12.2%
4.2%
1.2%
7.3%
1.7%

104.5%
106.7%
112.6%
101.6%
101.7%
95.3%
148.1%
106.5%

76,698217,257
311,565
159,904
54,946
16,21665,48020,976

8.1%
23.1%
33.1%
17.0%
5.8%
1.7%
7.0%
2.2%

Total discount store business(Former Don Quijote HD stores)

1,015,924

76.5%

110.1%

923,04298.0%

Clothings
Household goods

35,71932,378

2.7%
2.4%

―
―

―
―

―
―

Foods

185,532

14.0%

―

―

―

Other products

12,429

0.9%

―

―

―

Total GMS business(Former UNY group stores)

266,058

20.0%

―

―

―

Tenant leasing business

39,1322.9%

224.6%

17,420

1.9%

Other business

7,760

0.6%

741.9%

1,046

0.1%

Total sales

1,328,874

100.0%

141.1%

941,508

100.0%

Home electrical appliances
Miscellaneous household goods
Foods
Watches & fashion merchandiseSporting goods & leisure goods
DIY goods
Overseas3Sales breakdown by product category
Home electrical appliances
Miscellaneous household goods
Foods

POSA cards and wireless headsets were gainers. Seasonal appliances wereencouraged by temperature change.
Daily necessities such as detergents and hair care items attracted the domestic
customers. Cosmetics and drugs went up due to strong tourists’ shopping appetite.
Processed food (eg. snacks, instant noodles), alcohols and dairies were strong.
MEGA stores had strong sales for meat and ready-made meals.

Watches & fashion merchandise Though luxury items were stagnant, sporting wear and inner wear were contributors.
Sporting goods & leisure goods Outdoor goods were affected by bad weather. Toys and souvenir goods were popular.
Exterior and gardening goods were weak because of unstable temperature and badweather. Small parts and consumable items were good.
Processed foods, meat, ready-made meals, fruits and vegetables(incl. sweet potatoes).
Overseas
took the lead for the rise in sales. (1USD:110.71yen, 1SGD:81.73yen, 1THB:3.43yen)

DIY goods

Total discount store business Foods and daily consumables drove the domestic sales, drugs were the leader of(Former Don Quijote HD stores) strong tax-free sales.
Ladies’ outer wear and casual wear for kids grew. Sales promotion worked well forshoes and bags.
Seasonal home appliances such as fans and heaters as well as storage goods wereHousehold goods
strong.

ClothingFoods Small-sized packaged food were popular. Processed foods and dairies took the lead.
Total GMS business Clothing and household goods were gainers. Processed food sales offset the weak(Former UNY group stores) fresh food sales.

4The number of stores(stores)

Breakdown by format
FY2017FY2018FY2019Don Quijote

198

209

212

MEGA404344

New MEGA

728088MEGA DQ UNY

―

―

16

Apita / Piago

―

―

176

Picasso

21

23

21

Kyo-yasu-do

444

mini Piago

―

―

73

Doit

17

18

15

Nagasakiya

222Total stores in Japan

354

379

651

Overseas143942Global Total

368

418

693

Domestic opening

3255

255

Domestic closure

5520

Net increase

2750275(Conversion Store)* Opening store count is included both organic new store openings and M&A.

5The number of stores
Breakdown by company(stores)
FY2017

Don Quijote Co., Ltd.

FY2018FY2019292313322

Nagasakiya Co., Ltd. (MEGA)

404344

UD Retail Co., Ltd.

―

―

16

UNY Co., Ltd. (Apita, Piago)

―

―

176

Lirack Co., Ltd. (Kyo-yasu-do)

44499 Ichiba Co., Ltd. (mini-piago)

―

―

73

Doit Co., Ltd. (Doit)

1718

15

Daishin Co., Ltd. (MEGA Omori sanno)

111354379651

DQ USA (Stores in Hawaii)

344MARUKAI (California)

11910QSI (Hawaii)―2424

PPRM (Singapore)―

23

DONKI Thonglor (Thailand)

―

―

1

Overseas Total

143942Global Total

368

418

693

(DQ,New MEGA and small format)(MEGA UNY;conversion store from UNY)

Domestic Total

6

Key components in SG&A
12 months to June 2019

Consolidated(Millions of yen)

Actual12 months to June 2018

Share

YoY

ActualShare

Net sales

1,328,874

100.0%

141.1%

941,508

100.0%

Salary allowance

111,4858.4%

155.0%

71,941

7.6%

Rent

42,131

3.2%

148.7%

28,3303.0%

Commission paid

43,772

3.3%

190.7%

22,957

2.4%

Depreciation andamortization

20,0121.5%

135.1%

14,815

1.6%

Others90,017

6.8%

165.5%

54,380

5.8%

SG&A

307,41723.1%

159.8%

192,423

20.4%

z The consolidated SG&A went up by 59.8% largely due to UNY consolidation. Personnel cost and commission paid
increased by expanding the business scale rapidly. One-off cost related to UNY consolidation and initial cost for new stores
were added.
z SG&A for former Don Quijote group stood at 21.0% as a percentage of sales, while that of UNY was 30.4%.

7Sales and profit by business
Sales, profit and loss by segment from Jul.1, 2018, to June.30, 2019
Consolidated

Tenant leasing

Others

Total(Millions of yen)

Discount store

GMS

Adjusted

Consolidated

Sales to externalcustomers

1,015,924

266,058

39,1327,760 1,328,874

Internal sales or transfers
between segments

3,567

551

1,762

3,153

Total

1,019,491

266,609

40,894

10,913 1,337,907 (9,033) 1,328,874

Segment profit

49,589

7,039

7,795

(1,240)― 1,328,874

9,033 (9,033)

63,183(73)

Sales, profit and loss by segment from Jul.1, 2017, to June.30, 2018Consolidated

Discount store

GMS

Tenant leasing

OthersTotal―

63,110(Millions of yen)

Adjusted

Consolidated

Sales to externalcustomers

923,042―

17,4201,046

941,508―

941,508

Internal sales or transfers
between segments

2,581

―

1,874

―

4,455

（4,455）―

Total

925,623―

19,294

1,046

945,963（4,455）

941,508

Segment profit

51,508―2,768(2,691)

51,585（17）

51,568z Disclosed business segments were changed from Q3 FYJune 2019 (March quarter).
z Segment profit for discount store business stood at 49.6 billion yen, 7 billion yen for GMS business and 7.8 billion
yen for tenant leasing business.

8New segment category
Retail business

Tenant leasing business

Other business

Before（MajorSubsidiaries）

Don NagasaDoit
Quijote kiya

*２

※２

DQ USAMARUKAI

QSI

PPRM

JAM

JCE

D-One

RealitPPIH

PPLAUNY Group

UDR

99 Ichiba

UNY

UCS

*１

After（MajorSubsidiaries）

Discount store business

GMS business

Tenant leasing business

Other business*1. Disclosed business segments were changed from Q3 FYJune 2019 (March quarter).
*2．JAM (Japan Asset Marketing) and Realit are included in “Discount store business”.

9Balance Sheet
Consolidated(Millions of yen)

As of June 30,2019

Change from
June 30, 2018

(Millions of yen)

Consolidated

As of June 30,2019

Change from
June 30, 2018

Total current assets

496,405

259,792

Total current liabilities

337,985

166,099

Cash and deposits

172,673

100,700

Accounts payable

159,064

66,03467,41767,417

Short-term liabilities*

42,66021,256Merchandise

188,51052,729Total noncurrent liabilities

211,997

264,698

Total noncurrent assets

782,162

587,095

Long-term bonds

610,880262,967

238,458

147,184

Total property, plan and equipment

Buildings

262,955

129,540

Long-term borrowings

256,777

56,109Land

315,047

126,181

4,703(7,401)

Total intangible assets

37,602

9,355

Total liabilities

925,080

430,797

Goodwill

17,216(384)

Net assets

353,487

40,992

133,680(60,325)

Total shareholders’ equity

329,296

37,95980,44333,949Non-controlling interests

23,2171,430

1,278,567

471,789

Liabilities and net assets

1,278,567

471,789

Installment account receivable

Total investments and other assets

Lease and guarantee deposits
Total assets

Long-term payables under fluidity
lease receivables* Short-term liabilities = Short-term loans payable + Current portion of long-term loans payable + Current portion of bondsz Assets: Major reasons for increase in assets were cash and deposits (+100.7 billion yen), notes receivable andaccount receivable (+5.9 bil yen), installment account receivable (+67.4 bil yen), merchandise inventory (+52.7 bil yen),tangible assets (+263 bil yen), intangible assets (+9.4 bil yen) and lease and guarantee deposits (+33.9 bil yen).
On the other hand, long-term loan receivable decreased by 92.9 billion yen.

z Liabilities: 400.8 billion yen of liability for UNY and its subsidiaries were consolidated. Total liabilities went up 430.8 billion yen
mostly came from UNY.

10

Cash flows and Capital expenditure
12 months to June
2019

Consolidated Cash Flows
Cash and equivalents at beginning of period
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in cash and equivalents
Cash and equivalents at end of period75,883
101,978(37,113)43,456109,253
185,136

12 months to June
2018

78,09446,081(164,443)
116,083(2,211)75,883(Millions of yen)

Change(2,211)
55,897
127,330(72,627)
111,464
109,253(Millions of yen)

Consolidated Capital Expenditures
Capital expenditures
Cash flows*
Net increase (decrease)

12 months to June
2019

49,90876,13826,230

12 months to June
2018

56,061
48,603(7,458)Change(6,153)
27,53533,688* Cash flows = Net income + Depreciation and amortization + Extraordinary loss - Dividendz Cash flow from operating activities was 102 billion yen positive. Positive factors : 67.5 billion yen of income before income taxes,
23.7 billion yen of depreciation and amortization and 59.7 billion yen of decrease in installment account receivable.
Negative factors : 9.3 billion yen of gain on negative goodwill, 6 billion yen of investment gain from equity affiliates, 14.5 billion yen
increase in inventory and 27.5 billion yen for corporate tax payment.
z Cash flow from financing activities was 43.5 billion yen positive. 165 billion yen of net increase in long-term bonds, 106.6 billionyen of net decrease of long-term loans and 5.9 billion yen of dividend payment were major factors.
z Capex was 49.9 billion yen. (DQ:16.2 bil, Nagasakiya:3.2 bil, UNY:1.4 bil, UDR:1.9 bil JAM: 10.8bil). Free cash flow was 26.2
billion yen positive.

11

Earnings summary for Q4
3 months to June 2019

Consolidated(Millions of yen)

ActualShare

3 months to June 2018
YoY

ActualShare

Net sales

409,884

100.0%

172.0%

238,352

100.0%

Gross profit

118,41028.9%

186.8%

63,376

26.6%

SGA

101,632

24.8%195.9%

51,868

21.8%

Operating profit

16,7784.1%

145.8%

11,5084.8%

Recurring profit

16,482

4.0%

119.6%

13,777

5.8%

Profit attributable toowners of parent

11,201

2.7%

121.2%

9,242

3.9%

EPS(Yen)

70.76-

121.1%

58.42

-

12

Sales breakdown by product category for Q4
3 months to June 2019

Consolidated(Millions of yen)

ActualShare

3 months to June 2018
YoY

ActualShare

Other products

18,23959,672
93,27340,504
13,3183,906
24,727
5,836

4.4%
14.6%
22.8%
9.9%
3.2%
1.0%
6.0%
1.4%109.0%
108.9%
118.3%
107.3%
107.4%
91.0%
104.2%
113.4%

16,72854,77578,82037,751
12,3984,290
23,739
5,148

7.0%
23.0%
33.1%
15.8%
5.2%
1.8%
10.0%
2.2%

Total discount store business(Former Don Quijote HD stores)

259,475

63.3%

102.5%

233,649

98.0%

Clothings

4.5%
3.2%
22.7％

―
―
―

1.9%

―
―
―
―

―
―
―

Other products

18,27413,00893,032
7,792

Total GMS business(Former UNY group stores)

132,106

32.2%

―

――

Tenant leasing business

14,976

3.7%

337.6%

4,436

1.9%

Other business

3,327

0.8%

1,246.1%

267

0.1%

Total sales

409,884

100.0%

172.0%

238,352

100.0%

Home electrical appliances
Miscellaneous household goods
Foods
Watches & fashion merchandiseSporting goods & leisure goods
DIY goods
Overseas

Household goods
Foods

13

Key components in SG&A for Q4
3 months to June 2019

Consolidated(Millions of yen)

ActualShare

3 months to June 2018
YoY

ActualShare

Net sales

409,884

100.0%

172.0%

238,352

100.0%

Salary allowance

35,9788.8%

187.9%

19,1508.0%

Rent

13,5363.3%

180.8%

7,485

3.1%

Commission paid

15,4283.8%

239.6%

6,439

2.7%

Depreciation andamortization

6,210

1.5%

152.3%

4,078

1.7%

Others

30,4807.4%

207.1%

14,716

6.2%

SG&A

101,63240.2%

317.4%

51,86821.8%

14Forecast for fiscal June 2020
FY2020 forecast

Consolidated(Millions of yen)

FY2020 1H forecast

PlanShare

YoYPlanShare

Net sales

1,650,000

100.0%

124.2%

830,000

100.0%

Gross profit

466,000

26.2%

125.8%

234,000

28.2%

SGA

400,000

24.2%

130.1%

200,000

24.1%

Operating profit

66,0004.0%

104.6%

34,000

4.1%

Recurring profit

66,000

4.0%

96.7%

34,000

4.1%

Net profit

45,000

2.7%

93.3%

21,0002.5%

EPS (Yen)

71.06

―

93.2%

33.16

―

Dividend per share

11.00

―

110.0%

2.50―

Capital expenditure

40,000

―

80.1%

―

―

Depreciation

25,0001.5%

124.9%――z All items in “Vision 2020” (medium-term goals for FY 2020 set in 2015) was accomplished one year before the target year.
z SSS forecasts for Don Quijote and UNY are both flat from a year ago.
z Capex is likely to be 40 billion yen with 20 plus organic new stores and 25 plus UNY conversion stores.

15