Don Quijote Holdings. Co., Ltd.

Q1 Results for FY 2016
Earnings Results
July 1 - September 30, 2015

November 5 ,2015

0Earnings summary
Consolidated(Millions of yen)

3 months to Sep. 2015
Actual3 months to Sep. 2014

Share

YoY

ActualShare

Net sales

186,642100.0%

113.9%

163,861

100.0%

Gross profit

49,67826.6%

112.3%

44,23527.0%

SGA38,382

20.6%

113.6%

33,779

20.6%

Operating profit

11,2966.0%

108.0%

10,456

6.4%

Recurring profit

11,5786.2%

107.0%

10,822

6.6%

6,482

3.5%

105.6%

6,141

3.7%

41.02

104.8%

Profit attributableto owners of parentEPS(Yen)

39.15• Consolidated and same store sales went up 13.9% and 7.0% YoY respectively. We faced some negative external factors such as slow
growth in disposal income and consumer expenditure as well as bad weather. We carried out flexible sales promotion measures in atimely manner by seizing the needs in each commercial area. Those measures successfully brought in strong sales for us in Q1.
Sales in daily necessities increased, pushing up family-customer loyalty. We became even more competitive due to tourists’ sales.

• Traffic was strong as we offered more affordably priced items mainly in daily necessities to meet sentiment of more price-sensitive
consumers. GPM fell 0.4pts due to the write-downs of slow-moving inventories. Gross profit was better than expected thanks toincrease in sales.
• SGA went up due mainly to up-front investments for new stores. They included personnel, depreciation and office supplies expenses.
Cost increase in existing stores was because of the increase in man-hour triggered by change in sales-mix and better tourists’sales. The rise of cost, however, was more than offset by the sales growth.
• OP, RP and NP were better YoY, beating our forecast.
Copyright (c) 2015 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
Mar.

Existing stores

2013
Sep.

2014
Mar.

2014
Sep.

2015
Mar.

2015
Sep.

2014 Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

2015 Jan.

Feb.

Mar.

Apr.

MayJun.

Jul.

Aug.

Sep.

Sales

101.4%

102.3%

105.0%

108.3%

107.1%

104.3%

106.7%

109.4%

89.5%

114.2%

108.5%

104.4%

108.1%

107.3%

105.3%

Customer traffic

101.7%

100.6%

103.5%

105.2%

103.8%

100.0%

101.2%

105.6%

94.6%

105.3%

103.2%

99.8%

102.0%

101.7%

99.1%

Customer spending

99.8%

101.7%

101.5%

102.9%

103.1%

104.2%

105.4%

103.7%

94.6%

108.5%

105.1%

104.6%

106.0%

105.5%

106.3%

Existing store No.

196

196

196

195

196

200

203

204

205

205

207

208

207

209

212

• DQ SSS were up 7.0% for three-month period from July to September, supported by fast-growing overseas tourists’ sales(4pts)
and increase in domestic family wallet share(3pts).
• CPI rose, but disposal income and consumer expenditure remained stagnant. Given such an environment, customers highly
appreciated our assortment and pricing. Fast-growing inbound tourists’ consumption boosted our sales.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

2

Sales breakdown by product category
3 months to Sep. 2015

Consolidated(Millions of yen)

ActualShareYoY

3 months to Sep. 2014
ActualShare

Home electrical appliances

14,5757.8%

113.1%

12,884

7.9%

Miscellaneous household goods

43,291

23.2%

120.2%

36,011

22.0%

Foods

56,58130.3%

116.0%

48,773

29.8%

Watches & fashion merchandise

37,60920.1%

110.3%

34,09920.8%

Sporting goods & leisure goods

11,883

6.4%

106.0%

11,208

6.8%

Other products

16,3948.8%

109.1%

15,024

9.2%

Total retail store business

180,333

96.6%

114.1%

157,999

96.4%

Rent income

4,720

2.5%

106.1%

4,448

2.7%

Other business

1,589

0.9%112.4%

1,414

0.9%

186,642100.0%

113.9%

163,861

100.0%

Total

Home appliances : Smart phone accessories and POSA cards took the lead. Extremely hot summer encouraged seasonal items sales
such as air-conditioners and fans. Personal-care items were robust including hair-irons and shavers.
Household goods : Cosmetics and drugs contributed even better thanks to fast-growing tourists’ sales. Daily consumables became
more popular among families. Better sales in kitchen goods came from both domestic and overseas customers.
Foods: All product groups achieved high growth, proving the expansion in family wallet share.

Watches & Fashion : Sales were solid in luxury watches though super brand bags sales were soft. Travel bags were good.

Sports & Leisure ：Outdoor sporting goods were weak due to unstable temperature. Indoor goods performed well.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

3

The number of stores(Number of stores)

FY2013

FY2014FY2015FY2016-1Q

Don Quijote

165

174

183

182

MEGA35373636

New MEGA

21284145

Others31303234

Total stores in Japan

252269292297

Overseas3141414Grand Total

255

283306311

Domestic opening

162233

6

Domestic closure

351011317235Net increase• 6 new stores opened in Q1 : 1 Don Quijote, 3 New MEGA, 1 Picasso and 1 Kyoyasudo.
• 1 DQ store closed because of the termination of rental contract.
• Thirty or more new stores will be opened in FY2016, including 15 Don Quijote, 12 New MEGA and other formats
backed by our aggressive store opening strategy.

Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

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

3 months to Sep. 2015
ActualShareYoY

3 months to Jun. 2014
ActualShare

Net sales

186,642100.0%

113.9%

163,861

100.0%

Salary allowance

14,155

7.6%

118.2%

11,980

7.3%

Rent

5,153

2.8%

113.4%

4,544

2.8%

Commission paid

4,254

2.3%

116.2%

3,661

2.2%

Depreciation and amortization

2,977

1.6%

114.2%

2,608

1.6%

Others

11,843

6.3%

107.8%

10,986

6.7%

SGA

38,382

20.6%

113.6%

33,779

20.6%• SGA to sales ratio went down 0.05pts to 20.6%. Cost increased due to initial cost of new store openings such as supplies
expenses and depreciation expenses.
z

Personnel cost went up mainly due to an increase in man-hour triggered by the expansion in our shares in daily necessities
and tourists’ sales. The cost increase was more than offset by overall sales growth.

Copyright (c) 2015 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 Sep. 30, 2015
Consolidated
Sales to external customers

Retail storeRent income

180,333

4,720

1,589

3

4,318

180,3366,686Internal sales or transfers
between segments
Total
Segment profit

Others

Total

Adjusted amount

Consolidated

186,642-

186,642

1,773

6,094

(6,094)

9,038

3,362

192,736(6,094)

186,642

3,255

1,563

11,504(208)

11,296（Millions of yen）

Sales, profit and loss by segment from Jul. 1, 2014, to Sep. 30, 2014
Consolidated
Sales to external customers

Retail store

Rent income

157,999

4,448

1,414

3,587

157,9996,486Internal sales or transfers
between segments
TotalSegment profitz--

Others

Total

Adjusted amount

Consolidated

163,861-

163,861

1,329

4,916

(4,916)

8,035

2,743

168,777(4,916)

163,861

2,853

1,190

10,529(73)10,456-

Profit in the retail business was 6.7 billion yen which is our mainstay.

• Profit in the tenant leasing business was 3.3 billion yen.
• Profit in other business was 1.6 billion.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

6Balance Sheet（Millions of yen）
As of Sep. 30, Change from2015
Jun. 30, 2015
186,931
10,950Consolidated
Total current assets

Consolidated
Total current liabilities（Millions of yen）
As of Sep. 30, Change from2015
Jun. 30, 2015
151,477
6,901

Cash and deposits

62,904

13,187

Accounts payable

62,6972,141

Merchandise

92,712(1,868)

Short-term liabilities*

50,787

12,189342,711

13,026

Total noncurrent liabilities

151,742

12,019273,933

11,806Long-term bonds

65,504

2,814

Buildings

99,2463,225

Long-term borrowings

35,83010,674

Land

159,602

8,955

Long-term payables
under fluidity lease receivables

32,246(1,777)

17,432(97)Total liabilities

303,219

18,920

7,343

(66)

Net assets

226,423

5,056

51,346

1,317

Total shareholders' equity

214,089

4,407

32,8225

Non-controlling interests

9,581

568

529,642

23,976

Liabilities and net assets

529,642

23,976

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 : Long-term fund was financed from financial institutions for capex in FY2016.
• Merchandise: Inventories increased due to 6 new stores, but it was well-controlled in existing stores because of the successful
measures for better turnover.

• Payables associated with the liquidation of receivables : 39.3 billion yen was financed by asset-backed loans.

Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

7

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

3 months to Sep.
2015

3 months to Sep.
2014

51,292
12,099(19,983)
21,043
12,99264,284

44,105
1,324(16,609)
2,976(12,291)
31,814

7,187
10,755(3,374)18,06725,28332,470（Millions of yen）

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

Change3 months to Sep.
2015

3 months to Sep.
2014

18,8797,487(11,392)

14,787
6,819(7,968)Change4,092668
3,424* Cash flows = Net income + Depreciation and amortization + Extraordinary loss - Dividend• Cash flow from operating activities was 12.1 billion yen positive.
Positive factors : 11.5 billion yen of income before income taxes and minority interests, 3.5 billion yen of depreciation and amortization,
1.9 billion yen decrease in inventories, 2.1 billion yen increase in trade payables. Negative factor : 1.1 billion yen increase in tradereceivables, 8.5 billion yen for tax payment.
• Cash flow from financing activities was 21.0 billion yen positive driven by 23.3 billion yen of net increase in long and short term loans and2.3 billion yen of net increase of bonds. 1.9 billion yen of repayments of payables under fluidity lease receivables and 2.4 billion yen of
dividend payment were negative factors.
• Capex was 18.9 billion yen to acquire properties for new stores for this year and years afterwards.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

8Full year forecast for fiscal June 2016
Consolidated(Millions of yen)FY2016 1H Revised forecast
Plan

Share

YoY

FY2016 1H Previous forecast

Plan

Share

FY2016 Forecast
ActualShare

Net sales

383,000

100.0%

111.9%

368,000

100.0%

730,000

100.0%

Gross profit

102,800

26.8%

112.2%

100,000

27.2%

196,800

27.0%

SGA

78,30020.4%

114.8%

76,50020.8%

157,000

21.5%

Operating profit

24,5006.4%

104.7%

23,5006.4%

39,800

5.5%

Recurring profit

25,1006.6%

104.4%

24,1006.5%

40,800

5.6%

Profit attributableto owners of parent

14,2003.7%

103.7%

13,7003.7%

23,300

3.2%

EPS(Yen)89.81-

103.0%

86.76-

147.55-Depreciation

6,100

1.6%

113.6%

5,900

1.6%

12,8001.8%• First half forecast revised upward. Sales : up 15 billion yen, OP : up 1 billion, RP : up 1 billion, against our initial forecast.
• Don Quijote SSS forecast : +2.0% year-over-year for full year, up-revised 1.5pts from the previous forecast, +4.0% for 1H
up 3pts, and flat for 2H.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

9