Consolidated Financial Results
for the Nine Months Ended November 30, 2017
[Japanese GAAP]
January 10, 2018 Company name: PAL GROUP Holdings CO., LTD.
Stock exchange listing: Tokyo Stock Exchange Code number: 2726
URL: http://www.palgroup.holdings
Representative: Ryuta Inoue, President and Representative Director
Contact: Yukio Utsunomiya, Managing Officer and General Manager of Finance and Accounting Department Phone: +81-6-6227-0308
Scheduled date of filing quarterly securities report: January 12, 2018 Scheduled date of commencing dividend payments: ―
Availability of supplementary briefing material on quarterly financial results: Not available Schedule of quarterly financial results briefing session: Not scheduled
(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Nine Months Ended November 30, 2017 (March 1, 2017 to November 30, 2017)
(1) Consolidated Operating Results (% indicates changes from the previous corresponding period.) Net sales Operating income Ordinary income Profit attributable to
owners of parent million yen % million yen % million yen % million yen % Nine months ended
November 30, 2017 91,459 5.4 6,224 23.3 6,144 24.0 3,310 20.2
Nine months ended
November 30, 2016 86,810 2.8 5,046 0.2 4,953 (0.4) 2,755 (4.9)
(Note) Comprehensive income: Nine Months ended November 30, 2017: ¥3,402 million [24.9%] Nine Months ended November 30, 2016: ¥2,723 million [(4.7)%]
Basic earnings per share
Diluted earnings per share
yen yen
Nine months ended
November 30, 2017 150.49 ―
Nine months ended
November 30, 2016 125.25 ―
(2) Consolidated Financial Position
Total assets Net assets Equity ratio
million yen million yen %
As of November 30,
2017 86,068 39,274 45.6
As of February 28,
2017 77,083 37,590 48.8
2. Dividends
Annual dividends
1st quarter-end 2nd quarter-end 3rd quarter-end Year-end Total
yen yen yen yen yen
Fiscal year ended
February 28, 2017 ― 0.00 ― 70.00 70.00
Fiscal year ending
February 28, 2018 ― 0.00 ―
Fiscal year ending February 28, 2018 (Forecast)
70.00 70.00
(Note) Revision of dividend forecast: No
3. Consolidated Financial Results Forecast for the Fiscal Year Ending February 28, 2018 (March 1, 2017 to February 28, 2018)
(% indicates changes from the previous corresponding period.)
Net sales Operating
income Ordinary income
Profit attributable to owners of
parent
Basic earnings per share million yen % million yen % million yen % million yen % yen
Full year 123,880 6.4 8,020 30.1 7,850 29.9 4,060 32.2 184.55
(Note) Revision of consolidated financial results forecast: No
* Notes
(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): No
(2) Adoption of special accounting methods for preparing quarterly consolidated financial statement: No
(3) Changes in accounting policies, changes in accounting estimates and corrections of errors 1) Changes in accounting policies due to the revision of accounting standards: No 2) Any changes other than 1) above: No
3) Changes in accounting estimates: No 4) Corrections of errors: No
(4) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares): As of November 30, 2017 23,136,000 shares
As of February 28, 2017 23,136,000 shares 2) Total number of treasury shares at the end of the period:
As of November 30, 2017 1,137,057 shares As of February 28, 2017 1,136,865 shares 3) Average number of shares during the period:
*These quarterly consolidated financial results are not covered by the quarterly review.
* Explanation of the proper use of financial results forecast and other notes
1 Appendix
1. Qualitative Information on Consolidated Financial Results for the Period under Review 2
(1) Explanation of Operating Results 2
(2) Explanation of Financial Position 2
(3) Explanation of Consolidated Financial Results Forecast and Other Future Projections 2
2. Consolidated Financial Statements and Primary Notes 3
(1) Consolidated Balance Sheets 3
(2) Consolidated Statements of Income and Comprehensive Income 5
(3) Notes to Consolidated Financial Statements 7
(Notes on Going Concern Assumption) 7
(Notes in Case of Significant Changes in Shareholders’ Equity) 7
3. Additional Information 8
(1) Sales Results by Segment (Consolidated) 8
2
1. Qualitative Information on Consolidated Financial Results for the Period under Review (1) Explanation of Operating Results
During the nine months ended November 30, 2017 (March 1, 2017 to November 30, 2017), the Japanese economy remained on a gradual recovery trend driven mainly by improved corporate profit and the employment environment.
Under such a business environment, the Corporate Group made every effort to expand its operations and improve management efficiency by proactively keeping its business conditions entrenched and promoting the opening of new stores, while at the same time revitalizing existing stores by switching businesses and withdrawing unprofitable stores.
In the Apparel Business, the Group conducted proactive brand promotions while further pressing ahead with the reform of merchandising (MD) and improving the freshness of merchandise through agile introduction of items in stores. As a result, net sales increased by 4.5% year on year to ¥65,789 million. In the Miscellaneous Goods/Accessories Business, we opened 28 new stores in response to robust demand for opening stores reflecting our rising visibility. As a result, net sales increased by 7.9 % year on year to ¥25,591 million.
As a result of the above, net sales for the nine months ended November 30, 2017 increased by 5.4% year on year to ¥91,459 million.
In terms of profit, the gross profit margin increased by 0.3 points year on year to 57.0% through the further reform of merchandising (MD), etc. Operating income increased by ¥1,177 million year on year to ¥6,224 million, ordinary income increased by ¥1,190 million year on year to ¥6,144 million, and profit before income taxes increased by ¥869 million year on year to ¥5,547 million. Profit attributable to owners of parent increased by ¥555 million year on year to ¥3,310 million.
(2) Explanation of Financial Position (Assets)
Current assets increased by ¥9,093 million compared with the end of the previous fiscal year, due mainly to increases in cash and deposits by ¥2,412 million, notes and accounts receivable - trade by ¥2,751 million and merchandise and finished goods by ¥2,725 million.
Non-current assets decreased by ¥108 million compared with the end of the previous fiscal year, due primarily to a decrease in property, plant and equipment by ¥438 million, despite an increase in intangible assets by ¥345 million.
(Liabilities)
Current liabilities increased by ¥4,332 million compared with the end of the previous fiscal year, due mainly to an increase in notes and accounts payable - trade by ¥3,727 million, despite a decrease in income taxes payable by ¥1,425 million.
Non-current liabilities increased by ¥2,968 million compared with the end of the previous fiscal year, due primarily to an increase in long-term loans payable by ¥3,591 million.
(Net assets)
Net assets increased by ¥1,683 million compared with the end of the previous fiscal year, due mainly to an increase in retained earnings by ¥1,593 million.
(3) Explanation of Consolidated Financial Results Forecast and Other Future Projections
3 2. Consolidated Financial Statements and Primary Notes (1) Consolidated Balance Sheets
(Millions of yen)
As of February 28, 2017 As of November 30, 2017
Assets
Current assets
Cash and deposits 35,959 38,371
Notes and accounts receivable - trade 5,178 7,930
Merchandise and finished goods 8,592 11,317
Other 1,560 2,764
Allowance for doubtful accounts (2) (1)
Total current assets 51,288 60,382
Non-current assets
Property, plant and equipment
Buildings and structures, net 7,496 7,316
Other, net 2,406 2,148
Total property, plant and equipment 9,903 9,464
Intangible assets 398 743
Investments and other assets
Guarantee deposits 13,414 13,169
Other 2,153 2,381
Allowance for doubtful accounts (74) (73)
Total investments and other assets 15,492 15,477
Total non-current assets 25,794 25,685
Total assets 77,083 86,068
Liabilities
Current liabilities
Notes and accounts payable - trade 12,610 16,337
Short-term loans payable 3,287 4,591
Current portion of long-term loans payable 2,917 2,495
Income taxes payable 1,543 117
Provision for bonuses 1,255 835
Provision 167 200
Other 5,902 7,438
Total current liabilities 27,685 32,017
Non-current liabilities
Long-term loans payable 6,786 10,378
Net defined benefit liability 756 804
Provision 262 282
Asset retirement obligations 1,702 1,719
Other 2,299 1,592
Total non-current liabilities 11,807 14,776
4
(Millions of yen)
As of February 28, 2017 As of November 30, 2017
Net assets
Shareholders’ equity
Capital stock 3,181 3,181
Capital surplus 4,469 4,469
Retained earnings 31,927 33,520
Treasury shares (2,087) (2,088)
Total shareholders’ equity 37,491 39,083
Accumulated other comprehensive income Valuation difference on available-for-sale
securities 142 235
Foreign currency translation adjustment (5) (4)
Remeasurements of defined benefit plans (38) (40)
Total accumulated other comprehensive
income 99 190
Total net assets 37,590 39,274
5
(2) Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income
(Millions of yen) Nine months ended
November 30, 2016
Nine months ended November 30, 2017
Net sales 86,810 91,459
Cost of sales 37,552 39,297
Gross profit 49,257 52,162
Selling, general and administrative expenses 44,211 45,938
Operating income 5,046 6,224
Non-operating income
Interest income 1 1
Rent income 5 9
Share of profit of entities accounted for using
equity method 0 －
Other 70 45
Total non-operating income 77 56
Non-operating expenses
Interest expenses 100 88
Provision for loss on guarantees 38 17
Other 31 30
Total non-operating expenses 170 135
Ordinary income 4,953 6,144
Extraordinary losses
Loss on retirement of non-current assets 89 162
Impairment loss 185 434
Total extraordinary losses 275 596
Profit before income taxes 4,678 5,547
Income taxes - current 1,825 2,093
Income taxes - deferred 97 143
Total income taxes 1,922 2,236
Profit 2,755 3,310
6 Consolidated Statements of Comprehensive Income
(Millions of yen) Nine months ended
November 30, 2016
Nine months ended November 30, 2017
Profit 2,755 3,310
Other comprehensive income
Valuation difference on available-for-sale
securities 13 93
Remeasurements of defined benefit plans, net of
tax (28) (2)
Foreign currency translation adjustment (7) 0
Share of other comprehensive income of entities
accounted for using equity method (8) 0
Total other comprehensive income (31) 91
Comprehensive income 2,723 3,402
Comprehensive income attributable to
Comprehensive income attributable to owners of
parent 2,723 3,402
Comprehensive income attributable to
7 (3) Notes to Consolidated Financial Statements
(Notes on Going Concern Assumption) Not applicable.
8 3. Additional Information
(1) Sales Results by Segment (Consolidated) Nine months ended November 30, 2016
Nine months ended November 30, 2017
Changes from the previous corresponding period
Apparel Business
million yen 62,986
million yen 65,789
% 104.5 Miscellaneous Goods/
Accessories Business 23,711 25,591 107.9
Other 111 77 69.6
Total 86,810 91,459 105.4
(2) Status of Stores (Consolidated)
Nine months ended November 30, 2017 Number of stores as of February 28, 2017 923 stores
Number of new stores 54 stores
Number of closed stores 51 stores
