Quarterly trends and results

Quarterly results

Cumulative		FY03/22				FY03/23				FY03/23		FY03/23
(JPYmn)		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	% of Est.	1H Est.	% of Est.	FY Est.
Sales		51,991	103,386	157,751	208,084	52,506				49.8%	105,500	24.2%	216,800
	YoY	6.9%	6.2%	5.1%	3.7%	1.0%					2.0%		4.2%
Gross profit		22,473	44,775	68,387	90,262	22,469
	YoY	7.4%	6.5%	5.3%	3.8%	0.0%
	Gross profit margin	43.2%	43.3%	43.4%	43.4%	42.8%
SG&A expenses		17,207	34,255	51,767	69,344	18,096
	YoY	8.5%	5.8%	6.0%	5.5%	5.2%
	SG&A ratio	33.1%	33.1%	32.8%	33.3%	34.5%
Operating profit		5,265	10,520	16,620	20,918	4,372				50.8%	8,600	25.0%	17,500
	YoY	3.7%	8.6%	3.2%	-1.7%	-17.0%					-18.3%		-16.3%
	Operating profit margin	10.1%	10.2%	10.5%	10.1%	8.3%					8.2%		8.1%
Recurring profit		5,279	10,636	16,895	21,347	4,394				51.1%	8,600	25.1%	17,500
	YoY	2.9%	9.3%	4.5%	0.0%	-16.8%					-19.1%		-18.0%
	Recurring profit margin	10.2%	10.3%	10.7%	10.3%	8.4%					8.2%		8.1%
Net income		3,526	7,155	11,404	14,301	2,969				51.2%	5,800	24.9%	11,900
	YoY	1.1%	8.4%	4.0%	-2.9%	-15.8%					-18.9%		-16.8%
	Net margin	6.8%	6.9%	7.2%	6.9%	5.7%					5.5%		5.5%
Quarterly		FY03/22				FY03/23
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales		51,991	51,395	54,365	50,333	52,506
	YoY	6.9%	5.4%	3.1%	-0.5%	1.0%
Gross profit		22,473	22,302	23,612	21,875	22,469
	YoY	7.4%	5.6%	3.2%	-0.8%	0.0%
	Gross profit margin	43.2%	43.4%	43.4%	43.5%	42.8%
SG&A expenses		17,207	17,048	17,512	17,577	18,096
	YoY	8.5%	3.2%	6.4%	4.1%	5.2%
	SG&A ratio	33.1%	33.2%	32.2%	34.9%	34.5%
Operating profit		5,265	5,255	6,100	4,298	4,372
	YoY	3.7%	14.1%	-5.1%	-16.7%	-17.0%
	Operating profit margin	10.1%	10.2%	11.2%	8.5%	8.3%
Recurring profit		5,279	5,357	6,259	4,452	4,394
	YoY	2.9%	16.4%	-2.7%	-14.2%	-16.8%
	Recurring profit margin	10.2%	10.4%	11.5%	8.8%	8.4%
Net income		3,526	3,629	4,249	2,897	2,969
	YoY	1.1%	16.5%	-2.7%	-22.9%	-15.8%
	Net margin	6.8%	7.1%	7.8%	5.8%	5.7%

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.

Sales by segment

Cumulative			FY03/22				FY03/23
(JPYmn)			Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Sales			51,991	103,386	157,751	208,084	52,506
	YoY		6.9%	6.2%	5.1%	3.7%	1.0%
	Directly managed stores		51,192	101,845	155,474	205,110	51,766
		YoY	7.2%	6.3%	5.3%	3.8%	1.1%
		% of total	98.5%	98.5%	98.6%	98.6%	98.6%
	Franchised stores		538	1,052	1,593	2,076	515
		YoY	-16.8%	-12.2%	-10.6%	-9.3%	-4.3%
		% of total	1.0%	1.0%	1.0%	1.0%	1.0%
	Other		261	488	684	896	224
		YoY	17.6%	29.1%	4.0%	1.4%	-14.2%
		% of total	0.5%	0.5%	0.4%	0.4%	0.4%
Quarterly			FY03/22				FY03/23
(JPYmn)			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales			51,991	51,395	54,365	50,333	52,506
	YoY		6.9%	5.4%	3.1%	-0.5%	1.0%
	Directly managed stores		51,192	50,653	53,629	49,636	51,766
		YoY	7.2%	5.4%	3.4%	-0.4%	1.1%
		% of total	98.5%	98.6%	98.6%	98.6%	98.6%
	Franchised stores		538	514	541	483	515
		YoY	-16.8%	-6.7%	-7.2%	-4.9%	-4.3%
		% of total	1.0%	1.0%	1.0%	1.0%	1.0%
	Other		261	227	196	212	224
		YoY	17.6%	45.5%	-30.0%	-6.2%	-14.2%
		% of total	0.5%	0.4%	0.4%	0.4%	0.4%

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.

Sales by product category

Cumulative			FY03/22				FY03/23
(JPYmn)			Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Sales			51,991	103,386	157,751	208,084	52,506
	YoY		6.9%	6.2%	5.1%	3.7%	1.0%
	Sundries		51,364	102,207	155,733	204,988	51,850
		YoY	7.6%	6.7%	5.5%	4.0%	0.9%
		% of total	98.8%	98.9%	98.7%	98.5%	98.8%
	Foods and snacks		575	1,074	1,859	2,886	603
		YoY	-35.3%	-29.6%	-22.1%	-17.2%	4.9%
		% of total	1.1%	1.0%	1.2%	1.4%	1.1%
	Other		52	104	158	209	52
		YoY	271.4%	62.5%	32.8%	22.9%	0.0%
		% of total	0.1%	0.1%	0.1%	0.1%	0.1%
Quarterly			FY03/22				FY03/23
(JPYmn)			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales			51,991	51,395	54,365	50,333	52,506
	YoY		6.9%	5.4%	3.1%	-0.5%	1.0%
	Sundries		51,364	50,843	53,526	49,255	51,850
		YoY	7.6%	5.8%	3.3%	-0.3%	0.9%
		% of total	98.8%	98.9%	98.5%	97.9%	98.8%
	Foods and snacks		575	499	785	1,027	603
		YoY	-35.3%	-21.7%	-8.7%	-6.7%	4.9%
		% of total	1.1%	1.0%	1.4%	2.0%	1.1%
	Other		52	52	54	51	52
		YoY	271.4%	4.0%	-1.8%	0.0%	0.0%
		% of total	0.1%	0.1%	0.1%	0.1%	0.1%

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.

Comparable store sales at directly managed stores

Cumulative		FY03/22				FY03/23
		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Comparable-store sales (directly managed)		-0.6%	-0.6%	-1.0%	-2.1%	-3.6%
	Customer count	2.2%	0.2%	-0.3%	-1.4%	-2.4%
	Customer spend	-2.7%	-0.8%	-0.6%	-0.6%	-1.2%

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.

Store openings and closures

Cumulative		FY03/22				FY03/23
(stores)		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Net increase in directly managed stores		28	33	77	91	23
	Openings	39	57	106	137	33
	Closures	11	24	29	46	10
Net increase in franchise stores		-1	-	-2	-2	-1
	Openings	-	1	1	1	-
	Closures	1	1	3	3	1
Quarterly		FY03/22				FY03/23
(stores)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Net increase in directly managed stores		28	5	44	14	23
	Openings	39	18	49	31	33
	Closures	11	13	5	17	10
Net increase in franchise stores		-1	1	-2	-	-1
	Openings	-	1	-	-	-
	Closures	1	-	2	-	1

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.

Number of stores

		FY03/22				FY03/23
(stores)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Directly managed stores		1,770	1,775	1,819	1,833	1,856
	YoY	6.9%	5.2%	5.4%	5.2%	4.9%
	Color the Days	-	1,339	-	1,404
	Other than Color the Days	-	436	-	429
Franchised stores		44	45	43	43	42

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.

(Reference) Can Do quarterly results

Store count			May 2021	Aug 2021	Nov 2021	Feb 2022	May 2022	Aug 2022	Nov 2022	Feb 2022
Store count			1,128	1,141	1,180	1,197	1,214
	YoY		8.0%	9.1%	10.8%	10.9%	7.6%
	Directly managed stores		719	733	771	785	807
		YoY	1.3%	4.0%	8.6%	10.4%	12.2%
		Net increase	8	14	60	74	22
		Openings	13	20	64	64	28
		Closures	5	6	12	12	6
Cumulative (JPYmn)			Mar–May/21	Mar–Aug/21	Mar–Nov/21	Mar/21–Feb/22	Mar–May/22	Mar–Aug/22	Mar–Nov/22	Mar/22–Feb/23
Sales			18,514	36,281	54,291	72,435	18,728
	YoY		2.2%	-0.2%	0.0%	-1.0%	1.2%
Gross profit			7,051	13,866	20,774	27,739	7,092
	YoY		2.5%	0.1%	0.1%	-0.8%	0.6%
	Gross profit margin		38.1%	38.2%	38.3%	38.3%	37.9%
SG&A expenses			6,635	13,481	20,438	27,170	6,850
	YoY		2.5%	4.0%	3.8%	3.4%	3.2%
	SG&A ratio		35.8%	37.2%	37.6%	37.5%	36.6%
Operating profit			417	386	337	570	242
	YoY		2.2%	-56.8%	-68.7%	-66.5%	-42.0%
	Operating profit margin		2.3%	1.1%	0.6%	0.8%	1.3%
Quarterly (JPYmn)			Mar–May/21	Jun–Aug/21	Sep–Nov/21	Dec/21–Feb22	Mar–May/22	Jun–Aug/22	Sep–Nov/22	Dec/22–Feb/23
Sales			18,514	17,767	18,010	18,144	18,728
	YoY		2.2%	-2.5%	0.2%	-3.7%	1.2%
Gross profit			7,051	6,815	6,908	6,965	7,092
	YoY		2.5%	-2.3%	0.1%	-3.4%	0.6%
	Gross profit margin		38.1%	38.4%	38.4%	38.4%	37.9%
SG&A expenses			6,635	6,846	6,957	6,732	6,850
	YoY		2.5%	5.5%	3.5%	2.2%	3.2%
	SG&A ratio		35.8%	38.5%	38.6%	37.1%	36.6%
Operating profit			417	-31	-49	233	242
	YoY		2.2%	-	-	-62.8%	-42.0%
	Operating profit margin		2.3%	-	-	1.3%	1.3%

Source: Shared Research based on Can Do materials
Note: Figures may differ from company data due to differences in rounding methods.
Note: In order to enable comparisons with the company’s results, cumulative results are calculated based on the sum of quarterly results of three-month periods from March to February of the following year.

(Reference) Watts quarterly results

Store count			May 2021	Aug 2021	Nov 2021	Feb 2022	May 2022	Aug 2022	Nov 2022	Feb 2022
Store count			1,330	1,364	1,563	1,579	1,621
	YoY		7.8%	10.0%	23.2%	22.1%	21.9%
	Directly managed stores		1,307	1,341	1,536	1,554	1,598
		YoY	8.2%	10.4%	23.5%	22.6%	22.3%
		Net increase	39	34	268	286	44
		Openings	49	91	297	328	57
		Closures	10	18	29	42	13
Cumulative (JPYmn)			Mar–May/21	Mar–Aug/21	Mar–Nov/21	Mar/21–Feb/22	Mar–May/22	Mar–Aug/22	Mar–Nov/22	Mar/22–Feb/23
Sales			12,730	25,084	38,810	53,591	14,970
	YoY		-6.6%	-6.4%	-1.8%	2.2%	17.6%
Gross profit			4,893	9,744	15,047	20,658	5,723
	YoY		-5.4%	-5.5%	-1.2%	2.3%	17.0%
	Gross profit margin		38.4%	38.8%	38.8%	38.5%	38.2%
SG&A expenses			4,522	9,160	14,186	19,437	5,455
	YoY		-4.2%	-1.9%	3.1%	7.2%	20.6%
	SG&A ratio		35.5%	36.5%	36.6%	36.3%	36.4%
Operating profit			371	584	861	1,221	268
	YoY		-18.3%	-40.5%	-41.6%	-40.9%	-27.7%
	Operating profit margin		2.9%	2.3%	2.2%	2.3%	1.8%
Quarterly (JPYmn)			Mar–May/21	Jun–Aug/21	Sep–Nov/21	Dec/21–Feb22	Mar–May/22	Jun–Aug/22	Sep–Nov/22	Dec/22–Feb/23
Sales			12,730	12,354	13,726	14,780	14,970
	YoY		-6.6%	-6.3%	8.1%	14.4%	17.6%
Gross profit			4,893	4,851	5,303	5,611	5,723
	YoY		-5.4%	-5.7%	7.9%	12.9%	17.0%
	Gross profit margin		38.4%	39.3%	38.6%	38.0%	38.2%
SG&A expenses			4,522	4,638	5,027	5,250	5,455
	YoY		-4.2%	0.5%	13.7%	20.0%	20.6%
	SG&A ratio		35.5%	37.5%	36.6%	35.5%	36.4%
Operating profit			371	213	277	360	268
	YoY		-18.3%	-59.6%	-43.7%	-39.3%	-27.7%
	Operating profit margin		2.9%	1.7%	2.0%	2.4%	1.8%

Source: Shared Research based on Watts materials
Note: Figures may differ from company data due to differences in rounding methods.
Note: In order to enable comparisons with the company’s results, cumulative results are calculated based on the sum of quarterly results of three-month periods from March to February of the following year.

(Reference) Comparable store sales

Source: Shared Research based on each company material
Note: YoY changes in comparable store sales are calculated based on comparisons with simple three-month averages from the previous financial year.

(Reference) OPM

Source: Shared Research based on each company’s data
Note: Accounting periods between the company and Can Do and Watts vary by one month. For example, OPM from March–May at Can Do and Watts has been displayed alongside OPM at the company from April–June.

(Reference) Average sales and service wages in Tokyo, Osaka, and Nagoya areas

(JPY)		Apr–Jun/21	Jul–Sep/21	Oct–Dec/21	Jan–Mar/22	Apr–Jun/21
Sales and services		1,066	1,081	1,092	1,084	1,085
	YoY	2.2%	3.9%	3.9%	3.0%	1.8%
All categories		1,101	1,110	1,116	1,116	1,123
	YoY	1.4%	2.4%	1.7%	1.4%	2.1%

Source: Shared Research based on Recruit Jobs Co., Ltd. “Survey of Average Wages for Part- time Workers at Time of Recruitment”

Q1 FY03/23 results

Sales: JPY52.5bn (+1.0% YoY)
Operating profit: JPY4.4bn (-17.0% YoY)
Recurring profit: JPY4.4bn (-16.8% YoY)
Net income: JPY3.0bn (-15.8% YoY)

Initiatives

Under the theme of “overcoming difficulties to be a leader,” the company enacted the following measures.

Focused on the development of low-cost products to contain rising costs.

Strengthened relationships with corporate partners that can lead to multiple-store projects and focused store openings in new areas.

Improved efficiency throughout the company through enhanced system utilization. Installed self-checkout registers at 121 stores in Q1 FY03/23, with the self-checkout registers now present at 379 stores. The rate of usage increased at these stores.

Store openings and closures, store count, and comparable store sales at directly managed stores

Seria moved forward with store openings and closures while monitoring profitability. In Q1 FY03/23, the company opened 33 directly managed stores (39 in Q1 FY03/22) and closed 10 directly managed stores (11). Meanwhile, the company opened no franchised stores (none) and closed one (one). As of end-Q1 FY03/23, Seria had 1,856 directly managed stores (1,770 at end-Q1 FY03/22) and 42 franchised stores (44), totaling 1,898 stores (1,814).

Comparable store sales at directly managed stores fell 3.6% YoY, in line with the company projection. This was in reaction to an increase in stay-at-home demand that boosted sales in Q1 FY03/22.

Performance

Sales came to JPY52.5bn (+1.0% YoY).

Sales at directly managed stores were JPY51.8bn (+1.1% YoY). Directly managed stores accounted for 98.6% of total sales (+0.1pp YoY). Franchised store sales were JPY515mn (-4.3% YoY), accounting for 1.0% of total sales (-0.1pp YoY).

By sales category, sales of sundries came to JPY51.9bn (+0.9% YoY), making up 98.8% of total sales, the same level as in Q1 FY03/22. Sales of foods and snacks were JPY603mn (+4.9% YoY), accounting for 1.1% of total sales, the same level as in Q1 FY03/22.

Gross profit was JPY22.5bn (-0.0% YoY), with GPM at 42.8% (-0.4pp YoY). The decline in GPM was due to the yen's depreciation and a rise in the prices of raw materials.

SG&A expenses were JPY18.1bn (+5.2% YoY). The SG&A expense ratio rose 1.4pp YoY to 34.5%. This was due to a YoY decline in comparable store sales.

As a result, operating profit totaled JPY4.4bn (-17.0% YoY), recurring profit JPY4.4bn (-16.8 YoY), and net income JPY3.0bn (-15.8% YoY).

Seria 2782