February 9, 2017

Summary of Consolidated Financial Results
for the Third Quarter of the Fiscal Year Ending March 31, 2017
(Nine Months Ended December 31, 2016)[Japanese GAAP]
Company name: AOKI Holdings Inc.
Listings: TSE First Section
Stock code:
8214
URL: http://www.aoki-hd.co.jp/
Representative:
Akihiro Aoki, President
Contact:
Haruo Tamura, Executive Vice President
Tel: +81-45-941-1388
Scheduled date of filing of Quarterly Report:
February 10, 2017
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting:
None
Note: The original disclosure in Japanese was released on February 9, 2017 at 15:30 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2016
(April 1, 2016 – December 31, 2016)(Percentages represent year-on-year changes)(1) Consolidated results of operations
Sales

Operating profit

Million yen%
Million yen%
Nine months ended Dec. 31, 2016
133,404
1.8
4,259 (48.7)
131,030
2.8
8,311
(3.2)
Nine months ended Dec. 31, 2015
Note: Comprehensive income (million yen) Nine months ended Dec. 31, 2016:
Nine months ended Dec. 31, 2015:

Nine months ended Dec. 31, 2016
Nine months ended Dec. 31, 2015

Net income per share
Yen
25.67
52.19

Ordinary income
Million yen%
3,972 (51.3)
8,164
(4.2)
2,538 (down 46.5%)
4,744 (down 16.7%)

Profit attributable toowners of parent
Million yen%
2,271 (51.9)
4,720
(5.7)

Diluted net income per share
Yen-(2) Consolidated financial position
Total assets
Net assets
Million yen
Million yen
As of Dec. 31, 2016
229,935
139,375
As of Mar. 31, 2016
230,363
142,926
Reference: Shareholders’ equity (million yen)
As of Dec. 31, 2016:
139,287

Equity ratio
%
60.6
62.0
As of Mar. 31, 2016: 142,838

2. Dividends
1Q-endYen

2Q-end
Yen
20.00
21.00

FY3/16
FY3/17
FY3/17 (forecasts)
Note: Revisions to the most recently announced dividend forecast: None

Dividend per share
3Q-endYen-

Year-end
Yen
20.00
22.00

Total
Yen
40.00
43.00

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2017 (April 1, 2016 – March 31, 2017)
Sales

Operating profit

Ordinary income

Million yen%
Million yen%
Million yen%
Full year
196,270
4.1
15,800(11.2)
15,500(12.1)
Note: Revisions to the most recently announced consolidated forecast: None

(Percentages represent year-on-year changes)
Profit attributable to
Net income per shareowners of parent
Million yen
%
Yen
8,800
(9.4)
99.73

* Notes(1) Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None
(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others:

Yes2) Changes in accounting policies other than 1) above:None3) Changes in accounting-based estimates:

None4) Restatements:

None

Note: Please refer to “2. Matters Related to Summary Information (Notes)” on page 4 for further information.

(4) Number of shares outstanding (common shares)
1) Number of shares outstanding (including treasury stock) at the end of the period
As of Dec. 31, 2016:

90,649,504 shares

As of Mar. 31, 2016:

90,649,504 shares

As of Mar. 31, 2016:

984,762 shares

2) Number of shares of treasury stock at the end of the period
As of Dec. 31, 2016:

3,167,662 shares

3) Average number of shares outstanding during the period
Nine months ended Dec. 31, 2016:

88,461,871 shares

Nine months ended Dec. 31, 2015:

90,439,736 shares

Note 1: Information regarding the implementation of quarterly review procedures
The current quarterly summary report is not subject to the quarterly review procedures based on the Financial Instruments andExchange Act. At the time of disclosure, the review procedures for the quarterly consolidated financial statements have not been
completed.

Note 2: Cautionary statement with respect to forecasts and other matters
Cautionary statement with respect to forecasts
Forecasts regarding future performance in these materials are based on assumptions judged to be valid and information available
to the Company at the time the materials were created. These materials are not promises by the Company regarding future
performance. Actual performance may differ significantly from these forecasts for a number of reasons. Please refer to “(3)Explanation of Consolidated Forecast and Other Forward-looking Statements” on page 3 of the attachments regarding
preconditions or other related matters for the forecast shown above.

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2017

Contents of Attachments
Pages
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

3

2. Matters Related to Summary Information (Notes)

4

Changes in Accounting Policies and Accounting-based Estimates, and Restatements

4

3. Quarterly Consolidated Financial Statements

5(1) Quarterly Consolidated Balance Sheet

5(2) Quarterly Consolidated Statement of Income andQuarterly Consolidated Statement of Comprehensive Income

7

Quarterly Consolidated Statement of Income

7

Quarterly Consolidated Statement of Comprehensive Income

8(3) Notes to Quarterly Consolidated Financial Statements

9

Going Concern Assumption

9

Significant Changes in Shareholders’ Equity

9

Segment and Other Information

9

Subsequent Events

10

1

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2017

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first nine months of the current fiscal year, the Japanese economy recovered slowly along with improvements
in corporate earnings, jobs and personal income. However, consumer spending remained sluggish mainly because
consumers are reluctant to spend money. The outlook for the economy is unclear in part due to overseas political andeconomic events.
During the first nine months, the AOKI Group implemented various measures in all business segments as discussed
below. Sales increased 1.8% year-on-year to 133,404 million yen, but operating profit decreased 48.7% to 4,259
million yen. Ordinary income decreased 51.3% to 3,972 million yen and profit attributable to owners of parent
decreased 51.9% to 2,271 million yen.
Operating results by segment are as follows.
Fashion Business
AOKI strengthened personal-order apparel operations, which use a new system, and expanded Size Max for selling
apparel in large sizes. To further enlarge the lineup of apparel, AOKI introduced the New Jacket Biz Style ideal foralmost any workplace environment, and the Elegance Line of women’s apparel. All these activities were aimed atincreasing sales at existing stores. In addition, store reopening sales that attracted large numbers of customers were
held at about 100 locations following the completion of major renovations. Twelve new stores were opened, while
five stores were closed for relocation and other reasons. As a result, there were 574 stores at the end of the third
quarter compared with 567 stores at the end of the previous fiscal year.
ORIHICA launched its second TV commercial, used social networking and gave its e-commerce website a new lookin order to increase recognition of the ORIHICA brand. In addition, ORIHICA continued to develop original apparel,such as THE 3rd SUITS and the Platinum Line Series. Four new stores were opened while two stores were closed.
As a result, there were 146 stores at the end of the third quarter compared with 144 stores at the end of the previous
fiscal year.
Although new stores and sales at stores reopened after remodeling contributed to sales, earnings were impacted by adecline in the gross profit margin caused by these sales and by higher selling, general and administrative expenses
caused by store renovations and other activities. As a result, sales increased 3.1% to 76,158 million yen andoperating loss was 513 million yen, compared with a profit of 1,852 million yen in the same period of the previous
fiscal year.
Anniversaire and Bridal Business
ANNIVERSAIRE INC. operates guesthouse-style wedding and reception facilities. To add more ways to attract
customers, we are strengthening activities involving the Proposal Plan and conducting marketing activities thatutilize the powerful ANNIVERSAIRE brand. In addition, we replaced our core IT system to improve operating
efficiency. Despite all these activities, affected in part by adverse market conditions, the number of couples marriedat ANNIVERSAIRE wedding facilities decreased.
Sales decreased 11.1% to 20,901 million yen and operating profit decreased 32.4% to 2,371 million yen.
Karaoke Facility Operations Business
VALIC Co., Ltd., which operates karaoke facilities, offered a wide variety of party packages for the year-end party
season, and conducted marketing campaigns using tie-ups with popular characters. Furthermore, the latest karaokesystem was introduced to reinvigorate existing locations. During the first nine months, the number of locations
increased by seven to 190 as we opened eight locations and closed one location.

2

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2017

Although the new locations contributed to sales, market conditions and intense competition impacted theperformance of existing karaoke facilities. As a result, sales increased 1.7% to 13,969 million yen and operating
profit decreased 49.7% to 591 million yen.
Café Complex Operations Business
VALIC Co., Ltd., which also operates café complexes, continued to work on improving the performance of existing
locations. A number of cafés were renovated by adding sections exclusively for women and improving the boothconfiguration. In addition, personal computers at cafés were upgraded and Wi-Fi convenience was improved. We
opened 33, including AOKI’s first locations in Tottori and Okinawa, and closed one due to the termination of acontract during the first nine months, raising the number of cafés from 295 to 327 at the end of the third quarter.
Sales increased 12.1% to 22,389 million yen due to the newly opened cafés, but operating profit decreased 17.0% to
1,381 million yen because of higher expenses for new café openings.
(2) Explanation of Financial Position
Balance sheet position
AssetsTotal assets at the end of the third quarter under review decreased 427 million yen from the end of the previous
fiscal year to 229,935 million yen.
Current assets decreased 4,467 million yen from the end of the previous fiscal year. There were decreases of 5,534
million yen in cash in hand and in banks mainly due to capital expenditures and payment of income taxes, and 3,600
million yen in accounts receivable-trade due to seasonal reasons and other factors, while there were increases of
1,812 million yen in inventories due to new store openings, and 2,845 million yen in other current assets which
include income taxes receivable. Fixed assets increased 4,040 million yen from the end of the previous fiscal year as
tangible fixed assets increased 4,936 million yen due to new store openings, renewals and other factors, while otherinvestments and other assets decreased 1,162 million yen due mainly to sales of investment securities.
Liabilities
Current liabilities increased 1,084 million yen from the end of the previous fiscal year. Short-term debt increased
5,000 million yen, while there were decreases of 2,319 million yen in accrued income taxes due to the payment ofincome taxes among other reasons, and 746 million yen in accrued bonuses for employees due to the payment ofbonuses to employees among other reasons. Long-term liabilities increased 2,038 million yen due mainly to anincrease of 1,175 million yen in long-term debt due to new loans, scheduled repayment and other factors.
Net assets
Net assets decreased 3,550 million yen from the end of the previous fiscal year. There was a decrease of 1,260
million yen in retained earnings due to a profit attributable to owners of parent and dividend from surplus, and anincrease of 2,557 million yen in treasury stock due to the purchase.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
Results of operations in the first nine months under review were less than the forecast. However, we havemaintained the forecast that was announced on November 10, 2016, because of the tendency for the Fashion
Business to record the majority of its earnings in the fourth quarter.

3

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2017

2. Matters Related to Summary Information (Notes)
Changes in Accounting Policies and Accounting-based Estimates, and Restatements
Changes in Accounting Policies
The Company has adopted the “Implementation Guidance on Recoverability of Deferred Tax Assets” (AccountingStandards Board of Japan (ASBJ) Statement No. 26, March 28, 2016) starting with the first quarter of the current
fiscal year and partially revised its accounting method for determining the recoverability of deferred tax assets.
The Company has applied this implementation guidance in accordance with the transitional accounting treatments
set forth in Paragraph 49 (4) of this implementation guidance. Accordingly, the differences between deferred tax
assets and deferred tax liabilities determined by applying the applicable provisions of Paragraph 49 (3), Items 1
through 3 of the implementation guidance at the beginning of the first quarter of the current fiscal year and deferred
tax assets and deferred tax liabilities at the end of the previous fiscal year are added to retained earnings at the
beginning of the first quarter of the current fiscal year.
The result was an increase of 110 million yen each in deferred tax assets (investments and other assets) and retained
earnings at the beginning of the first quarter of the current fiscal year.

4

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2017

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheet(Millions of yen)
Third quarter of FY3/17(As of Dec. 31, 2016)

FY3/16(As of Mar. 31, 2016)
AssetsCurrent assets
Cash in hand and in banks

27,56022,026

Accounts receivable-trade

9,437

5,836

Inventories

27,83529,648Other current assets

9,111

11,956

Allowance for doubtful accounts

(45)

(36)

73,89969,431

Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures, net

58,90063,079Land

36,93436,953

Other tangible fixed assets, net

12,01012,749Total tangible fixed assets

107,846

112,782

6,680

6,444

Guarantee deposits

8,307

8,266

Leasehold deposit

20,57621,120

Other investments and other assets

13,093

11,930Intangible fixed assets
Investments and other assets

Allowance for doubtful accounts

(40)

(40)

Total investments and other assets

41,936

41,277

156,464

160,504

230,363

229,935

18,021

17,604-5,000

Current portion of long-term debt

4,050

4,150

Accrued income taxes

2,669

349

Accrued bonuses for employees

1,708

961

98

86

Total fixed assets
Total assets
Liabilities
Current liabilities
Accounts payable-trade
Short-term debt

Accrued bonuses for directors and statutory auditors
Other current liabilities

11,70011,180Total current liabilities

38,24839,33336,27537,450

1,845

1,915

1,014

973

Long-term liabilities
Long-term debt
Accrued retirement benefits for directors and statutory
auditors
Accrued costs for customer point program
Net defined benefit liability

853

899

Asset retirement obligations

5,109

5,424

Other long-term liabilities

4,090

4,563

Total long-term liabilities

49,18751,22687,43690,560Total liabilities

5

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2017

(Millions of yen)
Third quarter of FY3/17(As of Dec. 31, 2016)

FY3/16(As of Mar. 31, 2016)
Net assets
Shareholders’ equity
Common stock

23,282

23,282

Capital surplus

27,833

27,833Retained earnings

92,92991,669Treasury stock(1,436)(3,994)

Total shareholders’ equity

142,609

138,791

Unrealized gain on securities

612

792

Remeasurements of defined benefit plans

(383)

(296)

Total accumulated other comprehensive income

229

496

87

87

Accumulated other comprehensive income

Stock acquisition rights
Total net assets
Total liabilities and net assets

6

142,926

139,375

230,363

229,935AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2017(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income
Quarterly Consolidated Statement of Income(For the Nine-month Period)First nine months of FY3/16(Apr. 1, 2015 – Dec. 31, 2015)(Millions of yen)First nine months of FY3/17(Apr. 1, 2016 – Dec. 31, 2016)

Sales

131,030

133,404

Cost of sales

71,85476,374Gross profit

59,17557,030

Selling, general and administrative expenses

50,864

52,770Operating profit

8,311

4,259

Non-operating profit
Interest income

8074

Dividend income

122

91

Rental income on real estate

456

458

Other

233

209

Total non-operating profit

893

834

248

237

Non-operating expenses
Interest expenses
Expenses on sub-leased real estate

409

382

Loss on disposal of fixed assets

219

255

Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of investment securities
Total extraordinary gains

163

245

1,040

1,121

8,164

3,972

41

545

41

545

390

471

Extraordinary losses
Impairment loss
Loss on disaster-102

Litigation settlement439-

Total extraordinary losses

829

574

Profit before income taxes

7,376

3,944

Current income taxes

2,019

1,783

Deferred income taxes

636

(110)

Total income taxes

2,656

1,673

Profit

4,720

2,271

Profit attributable to owners of parent

4,720

2,271

7

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2017

Quarterly Consolidated Statement of Comprehensive Income(For the Nine-month Period)First nine months of FY3/16(Apr. 1, 2015 – Dec. 31, 2015)(Millions of yen)First nine months of FY3/17(Apr. 1, 2016 – Dec. 31, 2016)

4,720

2,271

(43)

179

ProfitOther comprehensive income
Unrealized gain on securities
Remeasurements of defined benefit plans, net of tax

66

87

Total other comprehensive income

23

267

4,744

2,538

4,744

2,538

-

-

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

8

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2017(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
No reportable information.
Significant Changes in Shareholders’ Equity
First nine months of FY3/17 (Apr. 1, 2016 – Dec. 31, 2016)
Purchase of treasury stock
The Company has purchased 2,182,000 shares of its treasury stock pursuant to the resolution of the Board of
Directors on February 15, 2016. As a result, treasury stock increased 2,557 million yen during the first nine months
of FY3/17 to 3,994 million yen.
Segment and Other Information
First nine months of FY3/16 (Apr. 1, 2015 – Dec. 31, 2015)
1. Information related to sales and profit/loss for each reportable segment(Millions of yen)
Reportable segment
FashionAnniversaireand Bridal

Karaoke
Facility
Operations

CaféComplexOperations

Amounts shown on
Adjustment quarterly consolidated
statement of income(Note 1)
(Note 2)

Total

Sales
External sales
Inter-segment sales
and transfers

73,83723,496

13,72819,967131,030-

131,030

4

24

2

0

31

(31)

-

Total

73,842

23,52013,73019,968131,061(31)

131,030

1,852
3,508
1,175
1,663
8,200
110
8,311
Segment profit
Notes: 1. The 110 million yen adjustment to segment profit includes 3,290 million yen in elimination for inter-segment
transactions, and -3,179 million yen in company-wide costs that cannot be allocated to any specific reportablesegments. Company-wide costs mainly include administration expenses of the Company that cannot be attributed toreportable segments.
2. Segment profit is adjusted with operating profit on the quarterly consolidated statement of income.

2. Information related to impairment losses on fixed assets, or goodwill, etc. for each reportable segment
Material impairment losses related to fixed assets
In the Fashion Business, the Karaoke Facility Operations Business and the Café Complex Operations Business,
impairment losses were recognized for operating stores set to be closed for which there is little expectation ofrecovery and had remained in the red; impairment losses of 109 million yen, 133 million yen and 147 million yen
were booked respectively in the first nine months of FY3/16.

9

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2017

First nine months of FY3/17 (Apr. 1, 2016 – Dec. 31, 2016)
1. Information related to sales and profit/loss for each reportable segment(Millions of yen)
Reportable segment
FashionAnniversaireand Bridal

Karaoke
Facility
Operations

CaféComplexOperations

Amounts shown on
Adjustment quarterly consolidated
statement of income(Note 1)
(Note 2)

Total

Sales
External sales
Inter-segment sales
and transfers

76,157

20,892

13,96522,389133,404-

133,404

1

9

4

-

15

(15)

-

Total

76,15820,901

13,96922,389133,420(15)

133,404

(513)
2,371
591
1,381
3,831
428
4,259
Segment profit (loss)
Notes: 1. The 428 million yen adjustment to segment profit (loss) includes 3,268 million yen in elimination for inter-segment
transactions, and -2,840 million yen in company-wide costs that cannot be allocated to any specific reportablesegments. Company-wide costs mainly include administration expenses of the Company that cannot be attributed toreportable segments.
2. Segment profit (loss) is adjusted with operating profit on the quarterly consolidated statement of income.

2. Information related to impairment losses on fixed assets, or goodwill, etc. for each reportable segment
Material impairment losses related to fixed assets
In the Fashion Business, the Karaoke Facility Operations Business and the Café Complex Operations Business,
impairment losses were recognized for operating stores set to be closed or rebuilt for which there is little expectationof recovery and had remained in the red; impairment losses of 192 million yen, 206 million yen and 72 million yen
were booked respectively in the first nine months of FY3/17.
Subsequent Events
The Company decided at a Board of Directors meeting held on February 9, 2017 to purchase its own shares to adopt
timely and flexible financial strategies in response to changes in the operating environment and to increase
shareholder value.
For details, please see “Notice of Decision to Acquire Treasury Shares” released the same day.

* This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers
who prefer an English translation.

10