February 7, 2019

Summary of Consolidated Financial Results
for the Third Quarter of the Fiscal Year Ending March 31, 2019
(Nine Months Ended December 31, 2018)[Japanese GAAP]
Listings: TSE First Section
Company name: AOKI Holdings Inc.
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 8, 2019
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 7, 2019 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, 2018
(April 1, 2018 – December 31, 2018)(1) Consolidated results of operations
Sales

Operating profit

Million yen%
Million yen%
Nine months ended Dec. 31, 2018
133,607(2.5)
4,471 (13.7)
Nine months ended Dec. 31, 2017
137,088
2.8
5,182
21.6
Note: Comprehensive income (million yen) Nine months ended Dec. 31, 2018:
Nine months ended Dec. 31, 2017:

Nine months ended Dec. 31, 2018
Nine months ended Dec. 31, 2017

Net income per share
Yen
2.76
25.72

(Percentages represent year-on-year changes)
Profit attributable toOrdinary profit
owners of parent
Million yen%
Million yen%
3,259 (28.5)
238 (89.3)
4,557
14.7
2,237
(1.5)
(36) (-%)
2,543 (up 0.2%)

Diluted net income per share
Yen-(2) Consolidated financial position
Total assets
Net assets
Million yen
Million yen
As of Dec. 31, 2018
228,828
141,152
As of Mar. 31, 2018
239,068
146,528
Reference: Shareholders’ equity (million yen)
As of Dec. 31, 2018:
141,077

Equity ratio
%
61.7
61.3
As of Mar. 31, 2018: 146,440

2. Dividends
1Q-endYen

2Q-end
Yen
22.00
29.00

Dividend per share
3Q-endYen-

Year-end
Yen
22.00

Total
Yen

44.00
FY3/18
FY3/1931.00
60.00
FY3/19 (forecasts)
Note: Revisions to the most recently announced dividend forecast: None
Breakdown of 2Q-end dividends for FY3/19: Ordinary dividends: 22.00 yen; Commemorative dividends: 7.00 yen
Breakdown of Year-end dividends for FY3/19 (forecasts): Ordinary dividends: 23.00 yen; Commemorative dividends: 8.00 yen

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2019 (April 1, 2018 – March 31, 2019)
Sales

Operating profit

Ordinary profit

Million yen%
Million yen%
Million yen
196,280(1.1)
15,0000.9
13,750
Full year
Note: Revisions to the most recently announced consolidated forecast: None

%
(1.8)

(Percentages represent year-on-year changes)
Profit attributable to
Net income per shareowners of parent
Million yen
%
Yen
7,000
(5.1)
81.12

* 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 “Changes in Accounting Policies” on page 8 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, 2018:

90,649,504 shares

As of Mar. 31, 2018:

90,649,504 shares

As of Mar. 31, 2018:

4,085,322 shares

Nine months ended Dec. 31, 2017:

86,977,232 shares

2) Number of shares of treasury stock at the end of the period
As of Dec. 31, 2018:

4,724,084 shares

3) Average number of shares outstanding during the period
Nine months ended Dec. 31, 2018:

86,395,860 shares

Note 1: The current quarterly summary report is not subject to quarterly review by certified public accountants or auditing firms.
Note 2: Cautionary statement with respect to forecasts and other matters
Cautionary statement with respect to forward-looking statements
Forecasts and forward-looking statements 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, 2019

Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance

Pages
2

(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. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statement of Income andQuarterly Consolidated Statement of Comprehensive Income

6

Quarterly Consolidated Statement of Income

6

Quarterly Consolidated Statement of Comprehensive Income

7(3) Notes to Quarterly Consolidated Financial Statements

8

Going Concern Assumption

8

Significant Changes in Shareholders’ Equity

8

Changes in Accounting Policies

8

Additional Information

8

Segment and Other Information

9

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AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2019

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 continued to recover slowly with thesupport of positive trends such as improvements in the labor market and personal income. However, the outlook
is still unclear mainly because of the global economic slowdown caused mainly by U.S.-China trade friction andother issues.
The AOKI Group implemented various measures in all business segments as explained below. Sales decreased
2.5% year-on-year to 133,607 million yen, operating profit decreased 13.7% to 4,471 million yen. Ordinary profit
decreased 28.5% to 3,259 million yen due to expenses for events to celebrate AOKI’s 60th anniversary and anincrease in loss on disposal of fixed assets for the replacement of computers. Profit attributable to owners ofparent decreased 89.3% to 238 million yen as there was an increase in the impairment loss mainly because of thedecision to conduct store relocations, closures and conversions to different formats earlier than originallyplanned.
Operating results by segment are as follows.
Fashion Business
AOKI stores expanded the lineup of men’s personal order suits and apparel with specific functions, including
Cho-taikyu Suits (super-tough suits) and Cho-hassui Coat (super water-repellent coat). AOKI stores also launched
the ANNIVERSAIRE brand for a new line of casual apparel created for active seniors. For women, stores started
selling fall and winter apparel in the Haratakufuku line of clothes for the workplace and the new AOKI Women’s
Style line of comfortable apparel with attractive silhouette primarily for women in their 40s and 50s. During thefirst nine months, four new stores were opened and five stores were closed or relocated to improve the efficiency
of AOKI’s operations. As a result, there were 573 stores at the end of the third quarter compared with 574 storesat the end of the previous fiscal year.
At ORIHICA, major activities included the introduction of THE TRAVEL EDIT brand for business travel apparelthat can be easily mixed and matched and a line of WARM FABRIC Shirts that are ideal for the Warm Biz
campaign. ORIHICA also continued to enlarge its selection of formal wear. Two new stores were opened, andfour were closed. As a result, there were 135 stores at the end of the third quarter compared with 137 stores at theend of the previous fiscal year.
Although there were numerous initiatives during the first nine months of the fiscal year, existing store sales weresluggish because of the diversification of sales channels for suits, unfavorable weather and other reasons.
As a result, sales in this segment decreased 4.0% to 73,313 million yen and there was an operating loss of 749
million yen compared with an operating profit of 525 million yen in the same period of the previous fiscal year.
Anniversaire and Bridal Business
ANNIVERSAIRE INC. operates guesthouse-style wedding and reception facilities. ANNIVERSAIRE conductednumerous marketing and public relations activities that leveraged the strength of the ANNIVERSAIRE brand. In
addition, the company’s website was redesigned and social networking services were used to attract customers.
There were also activities to upgrade products and services, including measures involving the Proposal Plan andjewelry sales. Despite these actions, the number of weddings decreased mainly because of market conditions forthe bridal business in Japan. ANNIVERSAIRE FUKUOKA was closed during the first nine months, and there
were 13 locations at the end of the third quarter compared with 14 at the end of the previous fiscal year.
Sales decreased 5.4% to 19,944 million yen and operating profit decreased 23.5% to 1,778 million yen.
Karaoke Facility Operations Business
The karaoke business of VALIC Co., Ltd. offered a wide variety of party packages for the year-end party season
and conducted a marketing campaign using tie-ups with popular characters. Furthermore, there were activities toincrease corporate members and Platinum Club members. During the first nine months, one karaoke facility was
opened and 12 were closed, including eight closed for conversion into café complexes. As a result, there were 161
karaoke locations at the end of the third quarter compared with 172 at the end of the previous fiscal year.

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AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2019

There was steady progress in improving operating efficiency. Sales decreased 6.6% to 13,147 million yen andoperating profit increased 70.5% to 824 million yen due to reduced cost of sales and selling, general andadministrative expenses.
Café Complex Operations BusinessIn the café complex business of VALIC Co., Ltd., there were many activities to invigorate existing locations.
Some locations were renovated by reconfiguring the layout of booths and adding karaoke rooms, no-smoking
booths and showers. A new grand menu and the addition of seasonal winter menu items also made cafés more
appealing. VALIC opened 15 locations and closed seven during the first nine months. As a result, there were 367
café complexes at the end of the third quarter compared with 359 at the end of the previous fiscal year.
Sales increased 6.4% to 27,222 million yen due to contributions from new cafés and a steady increase inexisting-store sales, and operating profit increased 48.8% to 2,007 million yen.
(2) Explanation of Financial Position
Balance sheet position
Starting with the beginning of the first quarter of the current fiscal year, AOKI Holdings is applying “Partial
Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ)
Statement No. 28, February 16, 2018). Prior-year figures have been adjusted retroactively to conform with thisaccounting standard in order to facilitate comparisons and analysis.
AssetsTotal assets at the end of the third quarter under review decreased 10,239 million yen from the end of the previous
fiscal year to 228,828 million yen due to seasonal factors.
Current assets decreased 9,878 million yen from the end of the previous fiscal year. There were decreases of
9,509 million yen in cash in hand and in banks due to the payment of income taxes among other reasons, and5,392 million yen in accounts receivable-trade due to seasonal factors, while there was an increase of 2,604
million yen in inventories due to seasonal reasons. Fixed assets decreased 361 million yen as tangible andintangible fixed assets decreased 370 million yen mainly due to depreciation and amortization.
Liabilities
Current liabilities decreased 3,329 million yen from the end of the previous fiscal year. Although there was a
short-term debt of 6,500 million yen, there were decreases of 3,807 million yen in accounts payable-trade due toseasonal factors among other reasons, 2,565 million yen in accrued income taxes due to the payment of income
taxes, 1,041 million yen in accrued bonuses for employees due to the payment of bonuses to employees among
other reasons, and 1,356 million yen in other current liabilities mainly due to a decrease in accounts payable-other.
Long-term liabilities decreased 1,533 million yen mainly due to decreases of 325 million yen in long-term debt
for the scheduled repayment and other reasons, and 201 million yen in accrued costs for customer point program.
Net assets
Net assets decreased 5,375 million yen from the end of the previous fiscal year. There was a decrease of 4,174
million yen in retained earnings due to a profit attributable to owners of parent and dividend from surplus, and anincrease of 926 million yen in treasury stock due to stock repurchases.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
In the first nine months of the current fiscal year, sales were less than planned because of slow existing store sales
in the fashion business. But the operating profit was generally consistent with the forecast due to contributions
from the café complex business and cost cutting measures in all businesses. In the fashion business, karaoke
facility operations business and café complex operations business, the decision to change locations to different
formats and close other locations earlier than originally planned in order to improve efficiency resulted inincreases in non-operating expenses and, due to asset impairment charges, extraordinary losses. However, there
are no changes to the forecast that was announced on November 8, 2018.

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AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2019

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)
Third quarter of FY3/19(As of Dec. 31, 2018)

FY3/18(As of Mar. 31, 2018)
AssetsCurrent assets
Cash in hand and in banks

32,17522,665

Accounts receivable-trade

11,6596,267

Inventories

26,00728,612Other current assets

8,431

10,851

Allowance for doubtful accounts

(35)

(36)

78,23868,360

Buildings and structures, net

60,58561,887

Land

36,952

36,952Other tangible fixed assets, net

14,131

12,630Total tangible fixed assets

111,669

111,470

5,796

5,624

7,973

7,861

Total current assets
Fixed assets
Tangible fixed assets

Intangible fixed assets
Investments and other assets
Guarantee deposits
Leasehold deposit

20,61020,560

Other investments and other assets

14,83014,991

Allowance for doubtful accounts

(50)

(40)

Total investments and other assets

43,36443,373160,829

160,468

239,068

228,828

19,812

16,004-

6,500

Current portion of long-term debt

2,650

1,650

Accrued income taxes

2,593

27

Accrued bonuses for employees

1,978

937

123

65

Other current liabilities

13,592

12,235

Total current liabilities

40,75037,420Long-term debt
Accrued retirement benefits for directors and statutory
auditors
Accrued costs for customer point program

36,47536,150

2,018

-

1,059

857

Net defined benefit liability

1,054

1,113

Asset retirement obligations

6,032

5,931

Other long-term liabilities

5,149

6,202

Total long-term liabilities

51,78950,256

92,53987,676

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

Accrued bonuses for directors and statutory auditors

Long-term liabilities

Total liabilities

4

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2019

(Millions of yen)
Third quarter of FY3/19(As of Dec. 31, 2018)

FY3/18(As of Mar. 31, 2018)
Net assets
Shareholders’ equity
Common stock

23,282

23,282

Capital surplus

27,833

27,846

Retained earnings

100,299

96,124

Treasury stock(5,376)(6,302)

Total shareholders’ equity

146,039

140,951

588

263

(187)

(137)

401

125

87

75

146,528

141,152

239,068

228,828

Accumulated other comprehensive income
Unrealized gain on securities
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Stock acquisition rights
Total net assets
Total liabilities and net assets

5

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2019(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
IncomeQuarterly Consolidated Statement of Income(For the Nine-month Period)First nine months of FY3/18(Apr. 1, 2017 – Dec. 31, 2017)(Millions of yen)First nine months of FY3/19(Apr. 1, 2018 – Dec. 31, 2018)

137,088

133,607

Sales
Cost of sales

79,55778,041Gross profit

57,531

55,566

Selling, general and administrative expenses

52,34951,094

Operating profit

5,182

4,471

Interest income

71

69

Dividend income

5962

Non-operating profit

Rental income on real estate

422

414

Other

126

146

Total non-operating profit

680

692

252

227

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

366

351

Loss on disposal of fixed assets
Expenses for events to celebrate AOKI’s 60th
anniversary
Other

205

474

120

450

359

400

1,305

1,904

4,557

3,259

Gain on sale of fixed assets-

160

Gain on sales of investment securities-

27

Total non-operating expenses
Ordinary profit
Extraordinary gains

Gain on reversal of stock acquisition rights-

12

Total extraordinary gains-

200

Impairment loss

593

2,284

Loss on sales of fixed assets

38-

Loss on liquidation of subsidiaries and associates-

444

Loss on disaster-

49

Extraordinary losses

632

2,777

Profit before income taxes

Total extraordinary losses

3,925

682

Current income taxes

1,298

483

Deferred income taxes

389

(39)

Total income taxes

1,687

444

Profit2,237

238

Profit attributable to owners of parent

2,237

238

6

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2019

Quarterly Consolidated Statement of Comprehensive Income(For the Nine-month Period)First nine months of FY3/18(Apr. 1, 2017 – Dec. 31, 2017)(Millions of yen)First nine months of FY3/19(Apr. 1, 2018 – Dec. 31, 2018)

2,237

238

Unrealized gain on securities

227

(324)

Remeasurements of defined benefit plans, net of tax

78

49

ProfitOther comprehensive income

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

7

305

(275)

2,543

(36)

2,543

(36)

-

-

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2019(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
No reportable information.
Significant Changes in Shareholders’ Equity
First nine months of FY3/19 (Apr. 1, 2018 – Dec. 31, 2018)
Purchase of treasury stock
AOKI Holdings has purchased 683,000 shares of its treasury stock pursuant to the resolution of the Board of
Directors on January 31, 2018, and sold 45,000 shares for restricted stock compensation for directors pursuant to
the resolution of the Board of Directors on June 27, 2018. As a result, treasury stock increased 926 million yen
including shares resulting from purchase of odd-lot shares during the first nine months of FY3/19 to 6,302 million
yen at the end of the third quarter of FY3/19.

Changes in Accounting Policies
AOKI Holdings has decided to apply “Practical Solution on Transactions Granting Employees and Others Stock
Acquisition Rights, which Involve Considerations, with Vesting Conditions, etc.” (Accounting Standards Boardof Japan (ASBJ) Practical Issues Task Force (PITF) No. 36, January 12, 2018) from April 1, 2018 and to accountfor transactions granting employees and others stock acquisition rights, which involve considerations, withvesting conditions in accordance with the “Accounting Standard for Stock Options” (ASBJ Statement No. 8,
December 27, 2005) and related guidance.
However, when applying PITF No. 36, the Company complies with the transitional provisions in Paragraph 10,
Item (3) of PITF No. 36 and continues to account for transactions that granted employees and others stockacquisition rights, which involve considerations, with vesting conditions prior to the date of application of PITF
No. 36 in accordance with the previously adopted accounting procedures.

Additional Information
Application of Partial Amendments to Accounting Standard for Tax Effect Accounting
AOKI Holdings has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ
Statement No. 28, February 16, 2018) at the beginning of the first quarter of the current fiscal year. Accordingly,
deferred tax assets are reclassified and included in the investments and other assets section.
Termination of Directors’ Retirement Benefits
At the AOKI Holdings shareholders meeting in June 2018, shareholders approved a resolution to make final
retirement payments in conjunction with the termination of the retirement benefit program for directors andstatutory auditors of AOKI Holdings and its consolidated subsidiaries.
As a result, all accrued retirement benefits for directors and statutory auditors were reversed and eliminated. The
planned retirement benefit program termination payments of 1,680 million yen are included in other long-term
liabilities.

8

AOKI Holdings Inc. (8214) Third Quarter of the Fiscal Year Ending March 31, 2019

Segment and Other Information
First nine months of FY3/18 (Apr. 1, 2017 – Dec. 31, 2017)
1. Information related to sales and profit/loss for each reportable segment(Millions of yen)Amounts shown onquarterly
Adjustment
consolidated(Note 1)statement of income(Note 2)

Reportable segment
FashionAnniversaireand Bridal

Karaoke
Facility
Operations

CaféComplexOperations

Total

Sales
External sales
Inter-segment sales
and transfers

76,36821,067

14,07725,573137,088-

137,088

12

10

4

-

27

(27)

-

Total

76,381

21,07814,082

25,573

137,116(27)

137,088

Segment profit
525
2,324
483
1,349
4,683
498
5,182
Notes: 1. The 498 million yen adjustment to segment profit includes 3,187 million yen in elimination for inter-segment
transactions, and -2,688 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 ANNIVERSAIRE and Bridal Business, the Karaoke Facility Operations Businessand the Café Complex Operations Business, impairment losses were recognized for operating stores set to beclosed or rebuilt for which there is little expectation of recovery; impairment losses of 198 million yen, 10
million yen, 291 million yen and 92 million yen were booked respectively in the first nine months of FY3/18.
First nine months of FY3/19 (Apr. 1, 2018 – Dec. 31, 2018)
1. Information related to sales and profit/loss for each reportable segment

Fashion

Reportable segment
Karaoke
Café
Anniversaire
FacilityComplexand Bridal
Operations Operations

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

Sales
External sales
73,311
19,92613,14727,222
133,607
133,607
Inter-segment sales
2
17
0
20
(20)
and transfers
Total
73,313
19,944
13,14727,222
133,628(20)
133,607
Segment profit
(749)
1,778
824
2,007
3,861
610
4,471
(loss)
Notes: 1. The 610 million yen adjustment to segment profit (loss) includes 3,359 million yen in elimination for inter-segment
transactions, and -2,749 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 and subleasing stores set to be closed, relocated orconverted, or expected to remain in the red; impairment losses of 423 million yen, 1,469 million yen, and 390
million yen were booked respectively in the first nine months of FY3/19.
* 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 ofreaders who prefer an English translation.

9