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H2O Retailing Corporation 8242

エイチ・ツー・オー リテイリング
H2O Retailing Corporation
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8-7 Kakuda-cho, Kita-ku, Osaka, 530-0017
https://www.h2o-retailing.co.jp/ja/index.html
06-6365-8120
Summary
H2O is a retailer that mainly operates department stores (Hankyu Department Stores and Hanshin Department Stores) and supermarkets (such as Izumiya and Hankyu Oasis)
Food & Staples RetailingMultiline Retail
Key dates
2020-04-30
Coverage initiation
Full Report
2021-12-01
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Executive summary

Business overview

H2O Retailing Corporation is a retailer that operates department stores (Hankyu Department Stores and Hanshin Department Stores), supermarkets (such as Izumiya and Hankyu Oasis), and shopping centers mainly in the Kansai area. The company operates 16 department stores in Japan, mainly along the Hankyu Railway and Hanshin Electric Railway lines. It also has 151 supermarkets in the Kansai region (as of June 2021). The company follows an area dominance strategy targeting the Kansai region. Kansai has around 20mn consumers and includes the prefectures of Osaka (population of 8.8mn), Hyogo (5.5mn), and Kyoto (2.6mn). H2O’s strategy is to have consumers make as many of their everyday purchases as possible at its supermarkets and enjoyable, non-routine shopping at its department stores. While being affected by a structural decline in department store sales amid competition from specialist stores and shopping centers, the company aims to make the retail spaces at its department stores unique. In this way, H2O aims to attract more customers in the Kansai region (primarily through its Hankyu Main Store and Hanshin Umeda Main Store), as well as to increase the number of visitors from other parts of Japan and overseas. To secure a new earnings base during a difficult period for expansion in the domestic department store market, the company opened Ningbo Hankyu (located in Zhejiang, China; company stake of 33.3%), its first overseas department store, in April 2021.

H2O was created through the 2007 merger of Hankyu Department Stores and Hanshin Department Stores. Their respective predecessor companies were the Hankyu Market (now Hankyu Main Store), which opened in Osaka’s Umeda district in 1925, and Hanshin Mart (now Hanshin Umeda Main Store), which opened in 1933. Hanshin Electric Railway is H2O’s largest shareholder, with an 11.9% stake, followed by Hankyu Hanshin Holdings (TSE1: 9042), which holds an 8.4% stake. Effectively, Hankyu Hanshin Holdings, the parent company of Hanshin Electric Railway, therefore holds a 20.3% stake in H2O (making it an equity-method affiliate). H2O, Hankyu Hanshin Holdings, and Toho (TSE1: 9602) together form the Hankyu Hanshin Toho Group. The group’s business interests span urban transport, real estate, hotels, department stores, supermarkets, and entertainment.

H2O has four business segments: the Department Store, Supermarket, Shopping Center, and Other businesses. In FY03/21, the Department Store business accounted for 47.1% of the company’s gross sales, while the Supermarket business accounted for 39.6%, the Shopping Center business 8.8%, and the Other business 4.6%. The operating loss in FY03/21 amounted to JPY4.4bn. The Department Store business generated JPY1.9bn in operating loss, while the Supermarket business produced operating profit of JPY4.2bn. Previously, the company had maintained solid performance in the Department Store segment with sales growth driven by its Hankyu Main Store. However, this trend was broken as the company reported an operating loss in the same segment due to impact from the COVID-19 pandemic. On the other hand, the company reported operating profit in the Supermarket segment, in part because it transferred the Izumiya non-food operations, which had generally been generating operating losses, to the Shopping Center business. The company is currently implementing structural reforms, including cost restructuring for its department stores, operational streamlining at supermarkets, and conversion of Izumiya general merchandise stores into shopping centers.

Trends and outlook

In FY03/21, the company reported gross sales of JPY739.2bn (-17.6% YoY), an operating loss of JP4.4bn (versus profit of JPY11.2bn in FY03/20), and a net loss (attributable to owners of the parent) of JPY24.8bn (versus a loss of JPY13.2bn in FY03/20). Despite recording operating profit in the Supermarket segment, the company reported overall operating loss due mainly to the sharp downturn at its mainstay department store business, which took an especially hard hit the first half of the year as the measures implemented in the wake of the pandemic forced it to suspend operations at some department stores, reduce operating hours at key stores, and cut back on sales promotion. The company booked extraordinary gains of JPY3.0bn, and extraordinary losses of JPY24.2bn in FY03/21. The extraordinary losses mainly stemmed from JPY14.8bn of impairment losses and JPY5.4bn of pandemic-related losses. The annual dividend for FY03/21 is JPY25 per share.

Company forecast for FY03/22: For FY03/22, the company forecasts gross sales of JPY765.0bn (+3.5% YoY), sales of JPY500.0bn, an operating loss of JPY1.0bn, a recurring loss of JPY2.0bn, and net income attributable to owners of the parent of JPY5.0bn. For the Department Store business, the company forecasts gross sales of JPY390.0bn (+12.1% YoY) and operating profit of JPY500mn (versus an operating loss of JPY1.9bn in FY03/21), while for the Supermarket business it forecasts gross sales of JPY297.0bn (+1.5% YoY) and operating profit of JPY4.5bn (+10.1% YoY). For the Shopping Center business, the company projects gross sales of JPY40.0bn (-38.5% YoY) and an operating loss of JPY500mn. The full-year forecast assumes a fifth wave of COVID-19 cases and a subsequent re-issuing of a state of emergency declaration by the Japanese government, but not the temporary closure of any stores. The forecast for the Department Store business assumes a gradual recovery in domestic demand from November 2021, but no remarkable recovery in tax-free sales during FY03/22.

Medium-term management plan: The company’s new medium-term management plan, covering the years between FY03/22 and FY03/24, is aimed at recovering operating profit to the level seen prior to the spread of COVID-19 and includes the following strategies: rebuild the Department Store business by reforming the cost structure and establishing the OMO business style; establish the Supermarket business as a second earnings pillar by restructuring the business, integrating food manufacturing and processing with sales, and bolstering capacity through alliances; (as part of its effort to establish businesses that will ensure future growth) work to make Ningbo Hankyu the leading department store in the region, develop related businesses, and launch and expand the customer service business centered on online support; and promote the advancement of IT and digitalization.

Strengths and weaknesses

Shared Research believes H2O has three key strengths: 1) an ability to create retail spaces that attract consumers (in Kansai, from outside the region, and from overseas) without relying excessively on retailer tenant revenues; 2) highly convenient, attractive locations; and 3) an ability to make the best use of its Hankyu and Hanshin brand, well known in Kansai region.

We believe its weaknesses are: 1) significant lags between decision-making and results due to the time it takes to build and rebuild department stores; 2) the lack of competitive advantage in the shopping center business format operated under the Shopping Center business; and 3) little experience of business development overseas. (See the Strengths and weaknesses section for details.)

Key financial data

Income statementFY03/13FY03/14FY03/15FY03/16FY03/17FY03/18FY03/19FY03/20FY03/21FY03/22
(JPYmn)Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Est.
Gross sales525,154576,852844,819915,690901,221921,871926,872897,289739,198765,000
YoY3.9%9.8%46.5%8.4%-1.6%2.3%0.5%-3.2%-17.6%3.5%
Sales---------500,000
YoY---------
Gross profit142,529156,949241,417266,363263,384266,224266,235256,035211,903
YoY2.2%10.1%53.8%10.3%-1.1%1.1%0.0%-3.8%-17.2%
Gross profit margin27.1%27.2%28.6%29.1%29.2%28.9%28.7%28.5%28.7%
SG&A expenses131,859139,636220,059242,538240,842243,459245,813244,864216,341
YoY1.8%5.9%57.6%10.2%-0.7%1.1%1.0%-0.4%-11.6%
SG&A ratio25.1%24.2%26.0%26.5%26.7%26.4%26.5%27.3%29.3%
Operating profit10,67017,31321,35823,82522,54222,76520,42211,171-4,438-1,000
YoY7.2%62.3%23.4%11.6%-5.4%1.0%-10.3%-45.3%--
Operating profit margin2.0%3.0%2.5%2.6%2.5%2.5%2.2%1.2%-0.6%-
Recurring profit11,33818,16021,21923,06021,72524,27221,37611,831-2,907-2,000
YoY10.0%60.2%16.8%8.7%-5.8%11.7%-11.9%-44.7%--
Recurring profit margin2.2%3.1%2.5%2.5%2.4%2.6%2.3%1.3%-0.4%-
Net income6,20029511,58614,05314,29814,6362,162-13,150-24,7915,000
YoY486.6%-95.2%-21.3%1.7%2.4%-85.2%---
Net margin1.2%0.1%1.4%1.5%1.6%1.6%0.2%-1.5%-3.4%0.7%
Per-share data (split-adjusted; JPY)
Shares outstanding (ex. treasury shares; year-end, mn)388.3388.3123.3123.4123.5123.5123.6123.6123.7
EPS (JPY)63.93.098.1113.9115.8118.517.5-106.4-177.940.4
EPS (fully diluted; JPY)63.73.097.6113.4115.3117.917.4--
Dividend per share (JPY)12.512.525.035.040.040.040.040.025.025.0
Book value per share (JPY)1,9031,8582,0332,0392,1322,2642,2521,9681,844
Balance sheet (JPYmn)
Cash and cash equivalent15,13535,40244,38148,52183,48167,15055,22925,95849,991
Total current assets65,41892,027139,905145,570178,318160,167150,003112,116139,291
Tangible fixed assets123,312120,484255,093253,461258,961280,661284,860273,165261,386
Investments and other assets145,834150,108217,049180,280185,721200,884209,710182,455208,539
Intangible assets24,75915,09719,83017,73017,54317,87018,76219,16816,729
Total assets359,323377,716631,877597,041640,543659,582663,335586,904625,945
Short-term debt58535,48815,70211,04030,26043,32528,95034,01047,324
Total current liabilities90,700141,603173,826157,225189,202201,569174,092158,139184,531
Long-term debt41,2105,501135,666125,014126,299116,106145,404132,419155,016
Total fixed liabilities82,20153,836206,392187,229187,018177,206209,640184,131212,137
Total liabilities172,901195,439380,218344,454376,220378,775383,732342,270396,668
Shareholders' equity184,746180,407250,764251,556263,222279,570278,364243,318228,135
Total net assets186,422182,277251,659252,587264,323280,807279,603244,634229,277
Total interest-bearing debt41,79540,989151,368136,054156,559159,431174,354166,429202,340
Cash flow statement (JPYmn)
Cash flows from operating activities24,53333,41525,46824,53938,74232,73915,39210,03912,755
Cash flows from investing activities-23,925-9,628-49,1625,852-25,325-35,492-36,682-22,619-20,761
Cash flows from financing activities-3,422-3,55724,161-26,20721,703-13,8129,581-16,44031,859
Financial ratio
ROA (RP-based)3.3%4.9%4.2%3.8%3.5%3.7%3.2%1.9%-0.5%
ROE3.5%0.2%5.4%5.6%5.6%5.4%0.8%-5.0%-10.5%
Equity ratio51.4%47.8%39.7%42.1%41.1%42.4%42.0%41.5%36.4%
Source: Shared Research based on company data. Per-share data have been adjusted for stock splits.
Note: Figures may differ from company materials due to differences in rounding methods.
Note: The company conducted a reverse stock split (1-for-2) on September 1, 2014.
Note: The company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) in FY03/22. The full-year FY03/22 forecast in this table is based on the application of this standard. “Sales” through FY03/21 are stated as “gross sales” in the table.
Note: Gross profit margin, SG&A expense ratio, operating profit margin, recurring profit margin, and net margin have been calculated using gross sales as a denominator.

Recent updates

Monthly sales data (flash report) for November 2021

2021-12-01

On December 1, 2021, H2O Retailing Corporation announced monthly sales data (flash report) for November 2021.

Monthly gross sales

FY03/2020192020
AprMayJunJulAugSepOctNovDecJanFebMar
Consolidated-0.2%-0.3%-0.7%-2.2%0.7%15.3%-9.1%-2.9%-3.0%-2.4%-5.9%-21.4%
Department Store1.1%0.2%1.8%1.0%2.5%21.6%-13.7%-5.5%-4.5%-1.7%-12.9%-36.9%
Hankyu Hanshin Dept. StoresAprMayJunJulAugSepOctNovDecJanFebMar
Hankyu Main Store4.6%0.4%7.6%3.8%6.7%29.5%-15.8%-5.8%-5.5%-1.4%-18.1%-41.3%
Hanshin Umeda Main Store-15.1%0.5%-20.9%-4.1%-3.4%21.7%-15.1%-6.6%-5.8%-2.6%-19.9%-42.5%
Total branch stores1.2%-0.3%2.0%-2.1%-2.2%7.2%24.7%33.7%36.1%32.2%35.8%-0.6%
All stores1.1%0.2%1.8%1.0%2.5%21.3%-2.5%7.4%8.0%10.2%-1.8%-28.0%
Comparable stores-------14.5%-5.4%-4.6%-1.8%-14.3%-38.0%
All stores ex. Hanshin Umeda Main Store3.4%0.1%5.4%
IzumiyaAprMayJunJulAugSepOctNovDecJanFebMar
Gross sales
All stores-3.6%-0.5%-0.4%-9.6%-2.1%1.1%-11.9%-6.8%-7.9%-8.9%0.5%-3.5%
Comparable stores-5.4%-2.8%-3.5%-12.1%-4.3%-0.8%-13.5%-6.9%-9.2%-9.3%-0.4%-2.8%
Hankyu OasisAprMayJunJulAugSepOctNovDecJanFebMar
Gross sales
All stores-5.6%-6.4%-5.3%-7.3%-4.4%-2.8%-4.5%-0.8%-2.0%-1.9%3.0%5.0%
Comparable stores-3.0%-5.1%-5.9%-8.4%-7.8%-6.0%-7.5%-4.8%-5.9%-5.8%-0.7%2.6%
FY03/2120202021
AprMayJunJulAugSepOctNovDecJanFebMar
Consolidated-47.3%-39.1%-12.5%-15.0%-15.1%-25.2%-4.1%-13.5%-13.6%-19.4%-10.9%8.8%
Department Store-79.4%-68.7%-22.1%-23.6%-26.5%-36.1%3.7%-14.1%-17.1%-30.1%-12.0%33.5%
Hankyu Hanshin Dept. StoresAprMayJunJulAugSepOctNovDecJanFebMar
Hankyu Main Store-85.9%-74.4%-21.9%-24.6%-29.5%-38.2%-1.1%-13.8%-17.9%-29.9%-7.2%44.8%
Hanshin Umeda Main Store-81.0%-72.7%-36.1%-31.9%-36.9%-55.8%-10.4%-31.4%-33.7%-44.6%-33.1%9.5%
Total branch stores-58.5%-43.9%15.4%12.6%16.7%8.2%-3.0%-9.8%-10.8%-26.0%-11.1%24.5%
All stores-76.5%-64.1%-10.9%-13.2%-15.0%-27.0%-2.8%-13.7%-16.5%-29.6%-11.6%32.6%
Comparable stores-80.5%-69.5%-22.5%-23.9%-26.9%-36.3%------
IzumiyaAprMayJunJulAugSepOctNovDecJanFebMar
Gross sales
All stores7.2%5.4%-0.9%2.9%5.2%1.0%3.2%1.8%0.6%5.4%-2.0%-7.4%
Comparable stores6.8%6.1%-0.2%3.5%5.2%0.5%2.0%-0.4%1.6%5.4%-2.0%-7.7%
Hankyu OasisAprMayJunJulAugSepOctNovDecJanFebMar
Gross sales
All stores7.7%4.3%0.3%4.4%5.7%-0.3%-0.1%-4.7%1.6%7.4%-2.4%-8.1%
Comparable stores6.0%3.3%-1.4%1.8%4.9%-1.5%-0.8%-3.8%2.9%8.1%-2.2%-8.6%
FY03/2220212022
AprMayJunJulAugSepOctNovDecJanFebMar
Consolidated38.8%-1.6%-0.3%3.8%-10.7%-5.4%4.5%
Department Store216.6%2.0%3.2%11.4%-15.4%-6.4%4.5%
Hankyu Hanshin Dept. StoresAprMayJunJulAugSepOctNovDecJanFebMar
Hankyu Main Store322.9%-34.3%8.6%18.8%-13.7%-3.2%7.8%19.3%
Hanshin Umeda Main Store151.9%-21.1%-17.6%-14.3%-68.2%-42.2%-9.5%14.6%
Total branch stores158.6%32.3%-0.9%6.8%-8.6%-5.1%1.9%2.2%
All stores213.6%1.3%2.5%11.0%-15.6%-6.9%3.7%11.5%
Comparable stores------
IzumiyaAprMayJunJulAugSepOctNovDecJanFebMar
Gross sales
All stores-7.1%-1.3%-0.4%-1.2%-6.1%-1.6%-2.2%-6.8%
Comparable stores-7.1%-0.6%0.7%-0.8%-5.7%-0.4%-0.5%
Hankyu OasisAprMayJunJulAugSepOctNovDecJanFebMar
Gross sales
All stores-5.3%0.9%5.5%0.7%-0.2%0.5%0.3%-1.1%
Comparable stores-5.8%0.7%6.3%2.3%1.9%2.4%1.5%
Source: Shared Research based on company data
Note: The company has been applying the Accounting Standard for Revenue Recognition since the beginning of FY03/22. However, monthly flash reports regarding sales and sales overviews use trading volume (gross sales), the metric applied by the company prior to the application of this standard.
Monthly20202021
DecJanFebMarAprMayJunJulAugSepOctNov
Consolidated-13.6%-19.4%-10.9%8.8%38.8%-1.6%-0.3%3.8%-10.7%-5.4%4.5%
Department Store-17.1%-30.1%-12.0%33.5%216.6%2.0%3.2%11.4%-15.4%-6.4%4.5%
Hankyu Hanshin Dept. StoresDecJanFebMarAprMayJunJulAugSepOctNov
Hankyu Main Store-17.9%-29.9%-7.2%44.8%322.9%-34.3%8.6%18.8%-13.7%-3.2%7.8%19.3%
Hanshin Umeda Main Store-33.7%-44.6%-33.1%9.5%151.9%-21.1%-17.6%-14.3%-68.2%-42.2%-9.5%14.6%
Total branch stores-10.8%-26.0%-11.1%24.5%158.6%32.3%-0.9%6.8%-8.6%-5.1%1.9%2.2%
All stores-16.5%-29.6%-11.6%32.6%213.6%1.3%2.5%11.0%-15.6%-6.9%3.7%11.5%
Comparable stores------------
All stores ex. Hanshin Umeda Main Store
Customer count
All stores-33.2%-40.7%-28.8%12.8%114.1%22.8%-2.5%0.3%-21.4%-16.7%-3.1%
Comparable stores-----------
Branch stores
Senri Hankyu-6.6%-16.6%-5.7%17.9%82.3%-16.3%-2.5%5.8%-12.0%-1.1%1.2%
Takatsuki Hankyu-1.3%-7.9%-2.9%17.9%95.9%-23.2%-5.9%4.1%-14.2%-3.4%-5.8%
Kawanishi Hankyu-9.9%-20.5%-10.3%10.4%78.6%8.0%-9.2%-1.8%-13.2%-9.4%-1.5%
Takarazuka Hankyu-2.4%-9.0%-5.3%22.6%32.1%15.6%6.9%5.3%8.5%-8.2%3.7%
Nishinomiya Hankyu-6.0%-21.5%-5.5%32.2%158.2%30.5%-7.8%3.3%-10.2%-0.5%3.1%
Sanda Hankyu-4.3%-17.5%-14.7%7.9%279.7%53.1%60.0%55.7%-85.9%--
Kobe Hankyu-8.9%-26.0%-14.8%20.3%193.4%40.7%-1.3%7.4%-10.7%-13.5%-7.5%
Hakata Hankyu-17.5%-37.6%-17.9%39.9%1,017.4%165.9%7.3%15.8%-3.8%-3.8%15.9%
Hankyu Men's Tokyo-21.7%-41.0%-21.7%24.3%705.1%170.5%-5.6%-0.2%-14.0%0.5%1.7%
Oi Hankyu Food Hall0.3%0.3%-5.1%7.7%-3.7%-4.1%3.0%0.4%-4.6%1.4%0.1%
Tsuzuki Hankyu-39.4%-50.7%3.2%15.4%22.5%27.5%8.1%6.1%2.1%7.4%8.9%
Amagasaki Hanshin-0.2%-1.6%-4.7%13.7%23.3%5.5%3.1%1.4%6.7%7.5%4.0%
Hanshin Nishinomiya-5.2%-10.9%-6.7%15.2%14.9%2.1%3.7%0.9%3.8%4.6%6.5%
Hanshin Mikage-7.9%-6.6%-10.5%19.1%32.3%16.6%12.7%0.8%2.1%-0.5%16.0%
All store sales by product
Menswear and goods-24.1%-39.3%-21.0%19.9%571.3%-35.3%-11.2%4.1%-21.5%-4.9%-2.0%
Womenswear and goods-26.2%-42.6%-12.2%33.0%652.6%-19.9%-1.5%8.1%-24.1%-8.5%6.9%
Children's wear and goods-22.6%-40.6%-12.1%46.5%432.5%-25.6%-10.9%8.7%-18.0%-20.5%0.1%
Other apparel-16.5%-33.5%-13.4%29.0%493.2%-35.7%-7.8%17.5%-30.0%-19.2%-4.5%
Apparel-24.4%-40.6%-15.2%29.6%584.6%-27.1%-6.1%7.8%-23.3%-9.4%2.4%
Personal items-13.6%-29.5%-7.4%63.8%699.1%-11.0%8.6%13.8%-11.7%-0.1%11.0%
Household goods-14.5%-20.3%5.0%34.8%420.5%-24.8%-0.3%23.0%3.4%-2.7%-4.1%
Food-11.4%-19.5%-13.8%20.0%32.8%17.9%8.3%5.6%-15.4%-9.4%-2.0%
Restaurants and cafes-48.5%-52.4%-34.1%39.8%538.7%5.4%2.7%9.3%-36.9%-26.6%22.4%
Accessories-11.5%-26.5%-7.0%35.2%319.8%3.7%3.2%26.4%-11.5%-2.9%10.9%
Services-27.1%-40.6%-36.1%0.6%425.5%-18.8%15.2%10.1%-30.5%-2.9%8.4%
Other-27.1%-9.9%-7.1%17.6%143.8%-7.6%-7.3%-0.5%-16.5%-17.6%-11.5%
Total-16.5%-29.4%-11.7%32.6%21.4%1.3%2.5%11.0%-15.6%-6.9%3.7%
IzumiyaDecJanFebMarAprMayJunJulAugSepOctNov
Gross sales
All stores0.6%5.4%-2.0%-7.4%-7.1%-1.3%-0.4%-1.2%-6.1%-1.6%-2.2%-6.8%
Comparable stores1.6%5.4%-2.0%-7.7%-7.1%-0.6%0.7%-0.8%-5.7%-0.4%-0.5%
Hankyu OasisDecJanFebMarAprMayJunJulAugSepOctNov
Gross sales
All stores1.6%7.4%-2.4%-8.1%-5.3%0.9%5.5%0.7%-0.2%0.5%0.3%-1.1%
Comparable stores2.9%8.1%-2.2%-8.6%-5.8%0.7%6.3%2.3%1.9%2.4%1.5%
Source: Shared Research based on company data
Note: The company has been applying the Accounting Standard for Revenue Recognition since the beginning of FY03/22. However, monthly flash reports regarding sales and sales overviews use trading volume (gross sales), the metric applied by the company prior to the application of this standard.
Note: Sanda Hankyu closed in August 2021.

Change in effective date of share exchange between Kansai Super Market and consolidated subsidiaries (Izumiya and Hankyu Oasis)

2021-11-26

On November 26, 2021, H2O Retailing Corporation announced a change in the effective date of share exchange between its subsidiaries and Kansai Super Market. 

On August 31, 2021, the company concluded a merger agreement with Kansai Super Market Ltd. to make the latter a subsidiary of the company and consolidate its business into the company group's. Further, as part of the merger, the company's subsidiaries and Kansai Super Market entered into a share exchange agreement, which will make Kansai Super Market the wholly owning parent company and the company's subsidiaries wholly owned subsidiaries. As such, the company and Kansai Super Market had been working toward finalizing the merger. 

However, OK Corporation, a shareholder of Kansai Super Market, filed a petition with the Kobe District Court for a provisional disposition order seeking an injunction against the share exchange, and on November 22, 2021, a decision was made to temporarily suspend the share exchange. On November 24, 2021, Kansai Super Market filed an objection to the provisional remedy with the Kobe District Court. In light of these circumstances, the company and Kansai Super Market agreed to move the effective date of share exchange from the initially planned date of December 1, 2021 to December 15, 2021.

Sale of non-current assets and recording of extraordinary gain

2021-11-25

On November 24, 2021, H2O Retailing Corporation announced the sale of non-current assets and the recording of extraordinary gain (gain on sale of non-current assets).

At a Board of Directors meeting held on November 24, 2021, the company resolved to sell non-current assets owned by consolidated subsidiary Hankyu Hanshin Department Stores, Inc. The goals of this sale are to improve the company’s asset efficiency by ensuring more effective use of management resources and to strengthen its financial structure. This sale will generate approximately JPY3.3bn in gain on the sale of non-current assets, which the company plans to book as extraordinary gain in Q3 FY03/24.

Summary of asset to be transferred
  • Location: 1-32-13 Sagisu, Fukushima-ku, Osaka, Osaka Prefecture
  • Asset details: 4,004.76sqm of land
  • Associated gain: Approximately JPY3.3bn
  • Current status of land: Used to accommodate a distribution center
  • Buyer: Not disclosed (the company has no notable capital, personal, or business relationship with the buyer, which is a subsidiary of a company with which H2O is affiliated)

Transfer schedule
  • Date of Board of Directors' decision: November 24, 2021
  • Contract conclusion date: November 24, 2021
  • Scheduled date of transfer: Late December 2023

Monthly sales report for October 2021

2021-11-15

H2O Retailing Corporation announced monthly sales report for October 2021.

Monthly gross sales

FY03/2020192020
(YoY)AprMayJunJulAugSepOctNovDecJanFebMar
Consolidated-0.2%-0.3%-0.7%-2.2%0.7%15.3%-9.1%-2.9%-3.0%-2.4%-5.9%-21.4%
Department Store1.1%0.2%1.8%1.0%2.5%21.6%-13.7%-5.5%-4.5%-1.7%-12.9%-36.9%
Hankyu Hanshin Dept. StoresAprMayJunJulAugSepOctNovDecJanFebMar
Hankyu Main Store4.6%0.4%7.6%3.8%6.7%29.5%-15.8%-5.8%-5.5%-1.4%-18.1%-41.3%
Hanshin Umeda Main Store-15.1%0.5%-20.9%-4.1%-3.4%21.7%-15.1%-6.6%-5.8%-2.6%-19.9%-42.5%
Total branch stores1.2%-0.3%2.0%-2.1%-2.2%7.2%24.7%33.7%36.1%32.2%35.8%-0.6%
All stores1.1%0.2%1.8%1.0%2.5%21.3%-2.5%7.4%8.0%10.2%-1.8%-28.0%
Comparable stores-------14.5%-5.4%-4.6%-1.8%-14.3%-38.0%
All stores ex. Hanshin Umeda Main Store3.4%0.1%5.4%
IzumiyaAprMayJunJulAugSepOctNovDecJanFebMar
Gross sales
All stores-3.6%-0.5%-0.4%-9.6%-2.1%1.1%-11.9%-6.8%-7.9%-8.9%0.5%-3.5%
Comparable stores-5.4%-2.8%-3.5%-12.1%-4.3%-0.8%-13.5%-6.9%-9.2%-9.3%-0.4%-2.8%
Hankyu OasisAprMayJunJulAugSepOctNovDecJanFebMar
Gross sales
All stores-5.6%-6.4%-5.3%-7.3%-4.4%-2.8%-4.5%-0.8%-2.0%-1.9%3.0%5.0%
Comparable stores-3.0%-5.1%-5.9%-8.4%-7.8%-6.0%-7.5%-4.8%-5.9%-5.8%-0.7%2.6%
FY03/2120202021
(YoY)AprMayJunJulAugSepOctNovDecJanFebMar
Consolidated-47.3%-39.1%-12.5%-15.0%-15.1%-25.2%-4.1%-13.5%-13.6%-19.4%-10.9%8.8%
Department Store-79.4%-68.7%-22.1%-23.6%-26.5%-36.1%3.7%-14.1%-17.1%-30.1%-12.0%33.5%
Hankyu Hanshin Dept. StoresAprMayJunJulAugSepOctNovDecJanFebMar
Hankyu Main Store-85.9%-74.4%-21.9%-24.6%-29.5%-38.2%-1.1%-13.8%-17.9%-29.9%-7.2%44.8%
Hanshin Umeda Main Store-81.0%-72.7%-36.1%-31.9%-36.9%-55.8%-10.4%-31.4%-33.7%-44.6%-33.1%9.5%
Total branch stores-58.5%-43.9%15.4%12.6%16.7%8.2%-3.0%-9.8%-10.8%-26.0%-11.1%24.5%
All stores-76.5%-64.1%-10.9%-13.2%-15.0%-27.0%-2.8%-13.7%-16.5%-29.6%-11.6%32.6%
Comparable stores-80.5%-69.5%-22.5%-23.9%-26.9%-36.3%------
IzumiyaAprMayJunJulAugSepOctNovDecJanFebMar
Gross sales
All stores7.2%5.4%-0.9%2.9%5.2%1.0%3.2%1.8%0.6%5.4%-2.0%-7.4%
Comparable stores6.8%6.1%-0.2%3.5%5.2%0.5%2.0%-0.4%1.6%5.4%-2.0%-7.7%
Hankyu OasisAprMayJunJulAugSepOctNovDecJanFebMar
Gross sales
All stores7.7%4.3%0.3%4.4%5.7%-0.3%-0.1%-4.7%1.6%7.4%-2.4%-8.1%
Comparable stores6.0%3.3%-1.4%1.8%4.9%-1.5%-0.8%-3.8%2.9%8.1%-2.2%-8.6%
FY03/2220212022
(YoY)AprMayJunJulAugSepOctNovDecJanFebMar
Consolidated38.8%-1.6%-0.3%3.8%-10.7%-5.4%4.5%
Department Store216.6%2.0%3.2%11.4%-15.4%-6.4%4.5%
Hankyu Hanshin Dept. StoresAprMayJunJulAugSepOctNovDecJanFebMar
Hankyu Main Store322.9%-34.3%8.6%18.8%-13.7%-3.2%7.8%
Hanshin Umeda Main Store151.9%-21.1%-17.6%-14.3%-68.2%-42.2%-9.5%
Total branch stores158.6%32.3%-0.9%6.8%-8.6%-5.1%1.9%
All stores213.6%1.3%2.5%11.0%-15.6%-6.9%3.7%
Comparable stores------
IzumiyaAprMayJunJulAugSepOctNovDecJanFebMar
Gross sales
All stores-7.1%-1.3%-0.4%-1.2%-6.1%-1.6%-2.2%
Comparable stores-7.1%-0.6%0.7%-0.8%-5.7%-0.4%-0.5%
Hankyu OasisAprMayJunJulAugSepOctNovDecJanFebMar
Gross sales
All stores-5.3%0.9%5.5%0.7%-0.2%0.5%0.3%
Comparable stores-5.8%0.7%6.3%2.3%1.9%2.4%1.5%
Monthly20202021
(YoY)NovDecJanFebMarAprMayJunJulAugSepOct
Consolidated-13.5%-13.6%-19.4%-10.9%8.8%38.8%-1.6%-0.3%3.8%-10.7%-5.4%4.5%
Department Store-14.1%-17.1%-30.1%-12.0%33.5%216.6%2.0%3.2%11.4%-15.4%-6.4%4.5%
Hankyu Hanshin Dept. StoresNovDecJanFebMarAprMayJunJulAugSepOct
Hankyu Main Store-13.8%-17.9%-29.9%-7.2%44.8%322.9%-34.3%8.6%18.8%-13.7%-3.2%7.8%
Hanshin Umeda Main Store-31.4%-33.7%-44.6%-33.1%9.5%151.9%-21.1%-17.6%-14.3%-68.2%-42.2%-9.5%
Total branch stores-9.8%-10.8%-26.0%-11.1%24.5%158.6%32.3%-0.9%6.8%-8.6%-5.1%1.9%
All stores-13.7%-16.5%-29.6%-11.6%32.6%213.6%1.3%2.5%11.0%-15.6%-6.9%3.7%
Comparable stores------------
All stores ex. Hanshin Umeda Main Store
Customer count
All stores-26.7%-33.2%-40.7%-28.8%12.8%114.1%22.8%-2.5%0.3%-21.4%-16.7%-3.1%
Comparable stores------------
Branch stores
Senri Hankyu-11.9%-6.6%-16.6%-5.7%17.9%82.3%-16.3%-2.5%5.8%-12.0%-1.1%1.2%
Takatsuki Hankyu-3.7%-1.3%-7.9%-2.9%17.9%95.9%-23.2%-5.9%4.1%-14.2%-3.4%-5.8%
Kawanishi Hankyu-9.5%-9.9%-20.5%-10.3%10.4%78.6%8.0%-9.2%-1.8%-13.2%-9.4%-1.5%
Takarazuka Hankyu-4.8%-2.4%-9.0%-5.3%22.6%32.1%15.6%6.9%5.3%8.5%-8.2%3.7%
Nishinomiya Hankyu-6.7%-6.0%-21.5%-5.5%32.2%158.2%30.5%-7.8%3.3%-10.2%-0.5%3.1%
Sanda Hankyu-18.0%-4.3%-17.5%-14.7%7.9%279.7%53.1%60.0%55.7%-85.9%--
Kobe Hankyu-13.2%-8.9%-26.0%-14.8%20.3%193.4%40.7%-1.3%7.4%-10.7%-13.5%-7.5%
Hakata Hankyu-7.8%-17.5%-37.6%-17.9%39.9%1,017.4%165.9%7.3%15.8%-3.8%-3.8%15.9%
Hankyu Men's Tokyo-19.8%-21.7%-41.0%-21.7%24.3%705.1%170.5%-5.6%-0.2%-14.0%0.5%1.7%
Oi Hankyu Food Hall-0.4%0.3%0.3%-5.1%7.7%-3.7%-4.1%3.0%0.4%-4.6%1.4%0.1%
Tsuzuki Hankyu-30.2%-39.4%-50.7%3.2%15.4%22.5%27.5%8.1%6.1%2.1%7.4%8.9%
Amagasaki Hanshin3.6%-0.2%-1.6%-4.7%13.7%23.3%5.5%3.1%1.4%6.7%7.5%4.0%
Hanshin Nishinomiya-7.4%-5.2%-10.9%-6.7%15.2%14.9%2.1%3.7%0.9%3.8%4.6%6.5%
Hanshin Mikage-0.2%-7.9%-6.6%-10.5%19.1%32.3%16.6%12.7%0.8%2.1%-0.5%16.0%
All store gross sales by product
Menswear and goods-23.6%-24.1%-39.3%-21.0%19.9%571.3%-35.3%-11.2%4.1%-21.5%-4.9%-2.0%
Womenswear and goods-27.2%-26.2%-42.6%-12.2%33.0%652.6%-19.9%-1.5%8.1%-24.1%-8.5%6.9%
Children's wear and goods-21.3%-22.6%-40.6%-12.1%46.5%432.5%-25.6%-10.9%8.7%-18.0%-20.5%0.1%
Other apparel-17.0%-16.5%-33.5%-13.4%29.0%493.2%-35.7%-7.8%17.5%-30.0%-19.2%-4.5%
Apparel-24.7%-24.4%-40.6%-15.2%29.6%584.6%-27.1%-6.1%7.8%-23.3%-9.4%2.4%
Personal items-8.3%-13.6%-29.5%-7.4%63.8%699.1%-11.0%8.6%13.8%-11.7%-0.1%11.0%
Household goods-3.7%-14.5%-20.3%5.0%34.8%420.5%-24.8%-0.3%23.0%3.4%-2.7%-4.1%
Food-10.6%-11.4%-19.5%-13.8%20.0%32.8%17.9%8.3%5.6%-15.4%-9.4%-2.0%
Restaurants and cafes-36.7%-48.5%-52.4%-34.1%39.8%538.7%5.4%2.7%9.3%-36.9%-26.6%22.4%
Accessories-6.7%-11.5%-26.5%-7.0%35.2%319.8%3.7%3.2%26.4%-11.5%-2.9%10.9%
Services-36.5%-27.1%-40.6%-36.1%0.6%425.5%-18.8%15.2%10.1%-30.5%-2.9%8.4%
Other-2.1%-27.1%-9.9%-7.1%17.6%143.8%-7.6%-7.3%-0.5%-16.5%-17.6%-11.5%
Total-13.7%-16.5%-29.4%-11.7%32.6%21.4%1.3%2.5%11.0%-15.6%-6.9%3.7%
IzumiyaNovDecJanFebMarAprMayJunJulAugSepSep
Gross sales
All stores1.8%0.6%5.4%-2.0%-7.4%-7.1%-1.3%-0.4%-1.2%-6.1%-1.6%-2.2%
Comparable stores-0.4%1.6%5.4%-2.0%-7.7%-7.1%-0.6%0.7%-0.8%-5.7%-0.4%-0.5%
Hankyu OasisNovDecJanFebMarAprMayJunJulAugSepSep
Gross sales
All stores-4.7%1.6%7.4%-2.4%-8.1%-5.3%0.9%5.5%0.7%-0.2%0.5%0.3%
Comparable stores-3.8%2.9%8.1%-2.2%-8.6%-5.8%0.7%6.3%2.3%1.9%2.4%1.5%

Sale of non-current assets and recording of extraordinary gain

2021-09-30

On September 30, 2021, H2O Retailing Corporation announced the sale of non-current assets and the recording of extraordinary gain (gain on sale of non-current assets).

Through a meeting of its Board of Directors held on September 30, 2021, the company reached the decision to sell a portion of its non-current assets. The goals of this sale are to improve the company’s asset efficiency by ensuring more effective use of management resources and to strengthen its financial structure. This sale will generate approximately JPY8.5bn in gain on the sale of non-current assets, which the company plans to book as extraordinary gain in Q4 FY03/23.

Summary of asset to be transferred
  • Location: 1857-18, 4-50-1, Esaka-cho, Suita, Osaka
  • Asset details: 10,905.69sqm of land (registered land area)
  • Associated gain: About JPY8.5bn
  • Current status of land: Used to accommodate a distribution center
  • Buyer: Undisclosed
Transfer schedule
  • Date of Board of Directors’ decision: September 30, 2021
  • Contract conclusion date: September 30, 2021
  • Scheduled date of transfer: March 31, 2023

Kansai Super Market announced assessment of the offers it has received from H2O and OK Corporation

2021-09-24

On September 24, 2021, Kansai Super Market Ltd. (TSE1: 9919) announced a press release outlining its assessment of the offers it has received from H2O Retailing Corporation (and its group companies) and OK Corporation, and reiterated its intention to push forward with the planned merger with H2O.

On August 31, 2021, H2O and Kansai Super Market announced that their respective Boards of Directors had voted to approve a merger of the two companies. In early June 2021, Kansai Super Market had received a different offer from OK Corporation, a supermarket operator based in the Kanto region; under that proposal, OK Corporation would make a tender offer for Kansai Super Market shares and the two would form a capital and business alliance. In response to the announcement of the merger agreement between H2O and Kansai Super Market, OK Corporation sent a missive to Kansai Super Market stating that it felt the explanation of the expected synergies from the merger between H2O and Kansai Super Market was lacking and requesting further details. The press release issued by Kansai Super Market on September 24, 2021 represents its response to that request and the questions posed by OK Corporation.

Having received a tender offer of JPY2,250 per share from OK Corporation, Kansai Super Market hired two independent third-party valuation specialists to assess the fairness of the competing offers to its shareholders. According to the calculations of IR Japan, Inc., after the share exchange consummating the merger with H2O, the theoretical fair value of Kansai Super Market shares would be between JPY2,400 and JPY3,018 per share. With Plutus Consulting Co., Ltd. putting fair value between JPY1,787 and JPY3,128 per share, Kansai Super Market concluded that, from the standpoint of shareholders, the offer from H2O is probably superior to the offer from OK Corporation.

The capital and business alliance between OK Corporation and Kansai Super Market based on a tender offer is only valid if Kansai Super Market shareholders will vote to abandon the planned merger between H2O and Kansai Super Market at its extraordinary shareholders meeting scheduled for October or November 2021.

Trends and outlook

Quarterly trends and results

CumulativeFY03/21FY03/22FY03/22
(JPYmn)Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4% of Est.FY Est.
Gross sales145,904335,614551,568739,198161,179344,07245.0%765,000
YoY-32.8%-25.5%-20.5%-17.6%10.5%2.5%-
Sales114,285237,02047.4%500,000
YoY---
Gross profit43,72697,702158,782211,90346,40097,824
YoY-30.6%-24.3%-20.0%-17.2%--
Gross profit margin30.0%29.1%28.8%28.7%28.8%28.4%
SG&A expenses47,020102,108159,790216,34248,445102,973
YoY-21.8%-16.8%-14.3%-11.6%--
SG&A ratio32.2%30.4%29.0%29.3%30.1%29.9%
Operating profit-3,293-4,405-1,008-4,438-2,044-5,148--1,000
YoY-------
Operating profit margin-2.3%-1.3%-0.2%-0.6%-1.3%--
Recurring profit-2,996-4,400-101-2,907-949-4,189--2,000
YoY-------
Recurring profit margin-2.1%-1.3%0.0%-0.4%-0.6%--
Net income-6,111-10,102-8,109-24,7916,2778,085161.7%5,000
YoY-------
Net margin-4.2%-3.0%-1.5%-3.4%3.9%2.3%0.7%
QuarterlyFY03/21FY03/22
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4
Gross sales145,904189,710215,954187,630161,179182,893
YoY-32.8%-18.8%-11.2%-7.7%10.5%-3.6%
Sales161,179122,735
YoY--
Gross profit43,72653,97661,08053,12146,40051,424
YoY-30.6%-18.2%-12.0%-7.8%--
Gross profit margin30.0%28.5%28.3%28.3%28.8%28.1%
SG&A expenses47,02055,08857,68256,55248,44554,528
YoY-21.8%-11.9%-9.6%-3.1%--
SG&A ratio32.2%29.0%26.7%30.1%30.1%29.8%
Operating profit-3,293-1,1123,397-3,430-2,044-3,104
YoY---39.0%---
Operating profit margin--1.6%--1.3%-
Recurring profit-2,996-1,4044,299-2,806-949-3,240
YoY---24.9%---
Recurring profit margin-----0.6%-
Net income-6,111-3,9911,993-16,6826,2771,808
YoY--86.3%---
Net margin----3.9%1.0%
Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: The company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) in FY03/22. FY03/22 figures and forecast in this table are based on the application of this standard. “Sales” through FY03/21 are stated as “gross sales” in the table.
Note: Gross profit margin, SG&A expense ratio, operating profit margin, recurring profit margin, and net margin have been calculated using gross sales as a denominator.
By segmentFY03/21FY03/22FY03/22
Cumulative (JPYmn)Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4% of Est.FY Est.
Gross sales145,904335,614551,568739,198161,179344,07245.0%765,000
YoY-32.8%-25.5%-20.5%-17.6%10.5%2.5%-
Department Store48,408138,187252,727347,76866,697154,30639.6%390,000
YoY-58.0%-43.1%-31.8%-26.5%--12.1%
Supermarket73,148141,806292,61173,346149,22850.2%297,000
YoY-----1.5%
Shopping Center Management17,07334,09165,04113,02524,56061.4%40,000
YoY------38.5%
Other7,27415,75533,6588,11015,97642.0%38,000
YoY-----12.9%
Sales114,285237,02031.0%765,000
YoY--
Department Store23,41654,886
YoY--
Supermarket70,095142,384
YoY--
Shopping Center Management12,43623,511
YoY--
Other7,32614,056
YoY--
Operating profit-3,293-4,405-1,008-4,438-2,044-5,148--1,000
YoY-------
Operating profit margin-------
Department Store-2,945-3,456-963-1,903-1,846-4,075-500
YoY-------
Operating profit margin------0.1%
Supermarket1,4822,9024,0871,3352,39653.2%4,500
YoY------
Operating profit margin2.0%2.0%1.4%1.9%0.7%1.5%
Shopping Center Management-10723-6--500
YoY----
Operating profit margin-0.2%--
Other526-1,090-2,348--3,000
YoY----
Operating profit margin----
Adjustments-2,250-466-1,114--
By segmentFY03/21FY03/22
Quarterly (JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4
Gross sales145,904189,710215,954187,630161,179182,893
YoY-32.8%-18.8%-11.2%-7.7%--
Department Store48,40889,779114,54095,04166,69787,609
YoY-57.4%-28.8%-12.5%-7.4%--
Supermarket73,14868,658--73,34675,882
YoY------
Shopping Center Management17,07317,018--13,02511,535
YoY------
Other7,2748,481--8,1107,866
YoY------
Sales114,285122,735
YoY--
Department Store23,41631,470
YoY--
Supermarket70,09572,289
YoY--
Shopping Center Management12,43611,075
YoY--
Other7,3266,730
YoY--
Operating profit-3,293-1,1123,397-3,430-2,044-3,104
YoY---39.0%---
Operating profit margin------
Department Store-2,945-5112,493-940-1,846-2,229
YoY---42.6%---
Operating profit margin--2.2%---
Supermarket1,4821,4201,3351,061
YoY----
Operating profit margin2.0%2.1%1.9%0.6%
Shopping Center Management-10723-29
YoY--
Operating profit margin-0.2%
Other526-1,090-1,258
YoY--
Operating profit margin--
Adjustments-2,250-466-648
Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: The company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) in FY03/22. FY03/22 figures and forecast in this table are based on the application of this standard. “Sales” through FY03/21 are stated as “gross sales” in the table.
Note: Operating profit margin has been calculated using gross sales as the denominator.
Note: In Q1 FY03/22, the company changed the name of the Shopping Center Management segment to the Shopping Center segment. Additionally, Hankyu Kitchen Yell Kansai, Inc., EveryD.com, Inc. and Hankyu Sennan Green Farm, which were previously included in the Other business segment, were transferred to the Supermarket segment, and Oi Development Co., Ltd., which was also included in Other business segment, was transferred to the Shopping Center segment. FY03/21 figures have been adjusted to reflect the new reporting segment classifications.
SG&A expensesFY03/21FY03/22
Quarterly (JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4
SG&A expenses47,02055,08857,68256,55248,44554,528--
YoY-21.8%-11.9%-9.6%-3.1%3.0%-1.0%--
% of sales32.2%29.0%26.7%30.1%30.1%29.8%--
Personnel18,39621,09421,32320,82119,27520,852--
YoY-22.3%-10.7%-12.1%-7.1%4.8%-1.1%--
% of sales12.6%11.1%9.9%11.1%12.0%11.4%--
Rents7,0649,51410,0399,7488,4689,792--
YoY-28.5%-5.7%-4.4%-0.7%19.9%2.9%--
% of sales4.8%5.0%4.6%5.2%5.3%5.4%--
Advertising and display7061,3011,7912,0121,2541,683--
YoY-76.3%-60.1%-19.8%-14.7%77.6%29.4%--
% of sales0.5%0.7%0.8%1.1%0.8%0.9%--
Depreciation and amortization3,6584,2174,5184,5663,5364,054--
YoY-9.5%0.5%-1.0%-5.2%-3.3%-3.9%--
% of sales2.5%2.2%2.1%2.4%2.2%2.2%--
Outsourcing4,6053,9654,5264,9404,3895,020--
YoY-6.3%-21.4%-10.7%0.2%-4.7%26.6%--
% of sales3.2%2.1%2.1%2.6%2.7%2.7%--
Sales commissions2,3093,0693,7252,3001,1111,363--
YoY-25.8%-5.2%-19.8%-26.4%-51.9%-55.6%--
% of sales1.6%1.6%1.7%1.2%0.7%0.7%--
Transportation3,4743,8693,9933,0693,3723,759--
YoY-2.7%-5.7%-4.4%-1.6%-2.9%-2.8%--
% of sales2.4%2.0%1.8%1.6%2.1%2.1%--
Other6,8048,0597,7699,0947,0378,005--
YoY-14.7%-10.2%-7.3%17.1%3.4%-0.7%--
% of sales4.7%4.2%3.6%4.8%4.4%4.4%--
Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: The company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) in FY03/22.
Note: With its application of the Accounting Standard for Revenue Recognition, the company began subtracting the monetary value associated with customer point redemptions, which it had previously recorded under “sales commissions,” from sales. This change led to a decline in sales commissions in FY03/22.
Note: SG&A expense ratios have been calculated using gross sales as the denominator.
Department Store business
Hankyu Hanshin Dept. StoresFY03/20FY03/21FY03/22
Quarterly (JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
Gross sales103,616114,728130,185101,92947,99289,071113,82294,36466,17686,985
YoY1.0%7.7%1.0%-10.4%-53.7%-22.4%-12.6%-7.4%37.9%-2.3%
Gross profit25,24527,07031,10923,24610,98920,25826,40920,74314,96019,586
YoY-0.4%6.4%-1.8%-13.7%-56.5%-25.2%-15.1%-10.8%36.1%-3.3%
Gross profit margin24.4%23.6%23.9%22.8%22.9%