Don Quijote Holdings. Co., Ltd.

Q1 Results for FY 2017
Earnings Results
July 1, 2016 - September 30, 2016

November 4, 2016

0Earnings summary
Consolidated(Millions of yen)

3 months to Sep. 2016
Actual3 months to Sep. 2015

Share

YoY

ActualShare

Net sales

201,327100.0%

107.9%

186,642100.0%

Gross profit

54,22426.9%

109.2%

49,678

26.6%

SGA

41,69220.7%

108.6%

38,382

20.6%

Operating profit

12,5326.2%

110.9%

11,296

6.0%

Recurring profit

12,7886.4%

110.5%

11,578

6.2%

Profit attributableto owners of parent

8,127

4.0%

125.4%

6,482

3.5%

EPS(Yen)

51.40-

125.3%

41.02-• Consolidated and same store sales went up 7.9% and 1.9% YoY respectively. Consumer sentiment had become sluggish.
Budged-minded customers started to choose what to buy more carefully. Bad weather decelerated customer traffic and seasonal items
sales. Under such circumstances, our existing stores attracted more family customers by responding to the local needs swiftly.
• GPM was up 0.3pts. Our finely-tuned price setting on daily necessities drove up GPM.
• Aggressive new store openings triggered the rise in personnel cost, rent and depreciation.
The rise in personnel cost in existing stores, however, is slowing down as the organization structure change in 2015 is bearing fruit.
• OP went up by 10.9%, Profit attributable to owners of parent was up 25.4%, both beat our guidance.
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%
2014
Mar.

Existing stores

2014
Sep.

2015
Mar.

2015
Sep.

2016
Mar.

2016
Sep.

2015 Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

2016 Jan.

Feb.

Mar.

Apr.

May.

June.

July.

Aug.

Sep.

Sales

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%

99.6%

102.6%

Customer traffic

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%

98.9%

101.2%

Customer spending

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%

100.7%

101.3%

Existing store count

207

209

212

214

216

218

221

220

222

223

226

232

236

239236• DQ SSS went up 1.9%, traffic +0.6% and spending +1.3% in Q1(July-September).
• Macro consumption expenditure data were stagnant. Our rich assortment and competitive price in daily necessities successfully
expanded the domestic customers’ wallet share.
Tax free sales for inbound customers trended quite nicely and contributed to the overall results.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

2Sales breakdown by product category
3 months to Sep. 2016

Consolidated(Millions of yen)

ActualShare

3 months to Sep. 2015

YoY

ActualShare

Home electrical appliances

16,4798.2%

113.2%

14,5597.8%

Miscellaneous household goods

43,14821.4%

111.6%

38,677

20.7%

Foods

63,87431.7%

112.5%

56,79930.4%

Watches & fashion merchandise

40,881

20.3%

105.2%

38,874

20.8%

Sporting goods & leisure goods

15,016

7.5%

102.2%

14,690

7.9%

Other products

15,055

7.5%

90.0%

16,734

9.0%

Total retail store business194,453

96.6%

107.8%

180,333

96.6%

Rent income

5,114

2.5%

108.3%

4,720

2.5%

Other business

1,760

0.9%

110.7%

1,589

0.9%

201,327100.0%

107.9%

186,642100.0%

Total

Home appliances : POSA cards and smart phone accessories were strong. Headsets, air-conditioners and TVs were contributors.
Household goods : High temperature encouraged seasonal consumables. Tourists’ sales in cosmetics and drugs grew rapidly.
Foods: Snacks took the lead. Daily delivered food showed stable growth. MEGA store enjoyed the sales growth in delis.

Watches & Fashion : Sales in luxury watches plummeted as there was a change in consumption patterns for inbound tourists.
Rainwear, shoes and bags were good.
Sports & Leisure ： Summer outdoor goods made a satisfying growth such as tents. Workout equipments and toys contributed.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

3

The number of stores(Number of stores)

FY2014FY2015FY2016FY2017-1Q

Don Quijote

174

183

194

195

MEGA373639

39

New MEGA284155

61

Others30323939Total stores in Japan

269292327334Overseas

14141414Grand Total

283306341348

Domestic opening

22334010

Domestic closure510531723357Net increase• 10 new stores opened in Q1 : 6 Don Quijote, 4 New MEGA.
• 3 DQ stores closed for relocation and renovation.
• Thirty or more new stores will be opened in FY2017, including 15 Don Quijote, 13 New MEGA and other formats
backed by our aggressive store opening strategy.

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

4

Key components in SG&AConsolidated(Millions of yen)

3 months to Sep. 2016
ActualShare

YoY

3 months to Sep. 2015
ActualShare

Net sales

201,327100.0%

107.9%

186,642100.0%

Salary allowance

16,0498.0%

113.4%

14,155

7.6%

Rent

5,638

2.8%

109.4%

5,153

2.8%

Commission paid

4,362

2.2%

102.6%

4,254

2.3%

Depreciation and amortization

3,338

1.6%

112.1%

2,977

1.6%

Others12,305

6.1%

103.9%

11,843

6.3%

SGA

41,69220.7%

108.6%

38,382

20.6%• SGA to sales ratio went up 0.1pts to 20.7%. Cost increased due to initial cost of new store openings such as personnel cost,rent and depreciation expenses.
zThe rise in personnel cost in existing stores, however, is slowing down as the organization structure change in 2015is bearing fruit.

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

5Balance Sheet（Millions of yen）
As of Sep. 30, Change from2016
Jun. 30, 2016
200,298
4,321

Consolidated
Total current assets

Consolidated
Total current liabilities（Millions of yen）
As of Sep. 30, Change from2016
Jun. 30, 2016
137,523(10,472)

Cash and deposits

44,003

1,109

Accounts payable71,272

1,078

Merchandise

118,877

1,477

Short-term liabilities*

24,423(8,501)

394,484

29,893

Total noncurrent liabilities

202,686

34,660296,690

4,638

Long-term bonds

82,748

6,277

Buildings

110,753

2,639

Long-term borrowings

75,88130,799Land

166,184

999

Long-term payables
under fluidity lease receivables

24,740(2,136)

16,965(40)

Total liabilities

340,20924,188

6,572

(280)

Net assets

254,573

10,02680,82925,295

Total shareholders' equity

239,887

8,099

36,7891,144

Non-controlling interests

16,631

3,635

594,782

34,214

Liabilities and net assets

594,782

34,214

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 : We financed long-term bank borrowing for capital investment.
• Merchandise: Inventory increased for 10 new stores and greater sales in existing stores.

• Payables associated with the liquidation of receivables : 31.8 billion yen was financed by asset-backed loans.

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

6

Cash flows and Capital expenditure（Millions of yen）

Consolidated Cash Flows
3 months to Sep.
2016
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

3 months to Sep.
2015

44,496
9,378(31,344)
23,383
1,021
45,51751,292
12,099(19,983)
21,043
12,99264,2843 months to Sep.
2016
Cash flows*
Net increase (decrease)(6,796)(2,721)(11,361)
2,340(11,971)(18,767)（Millions of yen）

Consolidated Capital Expenditures

Capital expenditures

Change3 months to Sep.
2015

12,5808,856(3,275)18,8797,487(11,392)

Change(6,299)
1,369
7,667

* Cash flows = Net income + Depreciation and amortization + Extraordinary loss - Dividend• Cash flow from operating activities was 2.7 billion yen negative.
Positive factors : 13.0 billion yen of income before income taxes and minority interests, 3.8 billion yen of depreciation and amortization.
Negative factors : 1.7 billion yen more in inventories and 5.1 billion yen for tax payment.
• Cash flow from financing activities was 23.4 billion yen positive driven by 22.4 billion yen of net increase of short and long-termborrowings and 6.6 billion yen of corporate bond issued. 2.7 billion yen of dividend payment were negative factors.
• Capex was 12.6 billion yen (DQ: 7.2 bil, Nagasakiya: 0.5 bil, JAM: 4.1bil). Free cash flow was negative 3.7 billion yen.
Copyright (c) 2016 Don Quijote Holdings Co.,Ltd. All rights reserved.

7Forecast for fiscal June 2017
Consolidated(Millions of yen)

FY2017 1H Revised forecast
Plan

Share

YoY

FY2016 1H Previously
announced forecast
Plan

FY2017 Forecast

Share

ActualShare

Net sales

41,500100.0%

107.9%

415,000

100.0%

820,000

100.0%

Gross profit

111,500

26.9%

108.3%

111,500

26.9%

220,000

26.8%

SGA

85,50020.6%

110.5%

85,50020.6%

175,000

21.3%

Operating profit

26,0006.3%

101.7%

26,0006.3%

45,0005.5%

Recurring profit

26,2006.3%

101.3%

26,2006.3%

45,500

5.5%

Profit attributableto owners of parent

16,0003.9%

112.4%

14,5003.5%

26,800

3.3%

EPS(Yen)101.18-112.4%

91.71-

169.50-Depreciation

6,800

1.6%

110.6%

6,800

1.6%

14,7001.8%• First half forecast revised upward. Net profit up 1.5 billion, against our initial forecast.
• Don Quijote SSS forecast : DQ SSS forecast : +0.5% in 1H, +0.6% in 2H and +0.5% for full year.

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

8