To Our Valued Shareholders
42nd Second Quarter Business Activity and Financial Results (March 1, 2018 – August 31, 2018)
First of all, we would like to thank you very much for your continued support of KOHNAN SHOJI CO., LTD.
The current fiscal year marks an important milestone - the 40th anniversary of our foundation. It is also the start of the second medium-term management plan “We Love KOHNAN so much!! ”. We have continued to pursue high profits by expanding sales volume as well as strengthening our financial constitution to increase enterprise value. Moreover, we have launched strategic initiatives to achieve future growth during this breakthrough year. Based on customer feedback, we endeavor to enhance the competitiveness of our goods in price as well as quality. Furthermore, we strive to create stores with strong appeal to local communities in all aspects, not least is our wide selection of goods and services. We also aim to achieve the sustainable growth.
In addition to extreme summer heat, we suffered many natural disasters such as heavy rains, typhoons and massive earthquakes in Japan. We would like to express our deepest sympathy to all those who affected by those disasters. Under such circumstances, there had been increased demand for emergency repair-related products and commodities to maintain their living environment until lifeline utilities were restored to normal. We have been fully devoting ourselves to supplying necessary goods to help to restore the daily lives of many customers who relied on our stores. We are and we will be working with a sense of mission that we are there to help people whenever they are in trouble.
Under these circumstances, with regard to store development for the second quarter period ended August 31,2018, we have opened four Home Center stores and eight PRO stores. On the other hand, we closed two Home Center stores. Overall, as of August 31, 2018, there are now a total 346 stores (274 Home Center stores and 72 PRO stores).
As for business results, thanks to the new stores, net sales were 168 billion 770 million yen (up 4.7% year-over-year). Due to improvement in gross profit margins, gross profit was 60 billion 546 million yen (up 6.1% year-over-year). Operating income was 10 billion 787 million yen (up 4.7% year-over-year) and ordinary income was 9 billion 758 million yen (down 0.1% year-over-year). Due to an increase in the impairment loss, net income decreased by 5 billion 145 million yen (down 14.6% year-over-year).
Higher Returning Profits to Our Shareholders
We recognize it as a priority of business management to return profits actively and appropriately to our shareholders. We consider it our fundamental policy to keep our dividends stable for the long term while comprehensively considering the performance forecasts and the total level of internal reserves.
With this policy in mind, considering business results and the 40th anniversary of our foundation, we have decided to pay 26 yen per share to our valued shareholders for an interim dividend and a year-end dividend (annual dividend is 52 yen per share), which is a 1-yen increase each as the commemorative dividend for the 40th anniversary of our foundation to maximize returns to our shareholders. We have now increased our dividend for five consecutive years. We hope and believe we have been able to meet the expectations of all shareholders.
In closing, thank all of our shareholders for your continued support of KOHNAN SHOJI CO., LTD.
November 9th, 2018
KOHNAN SHOJI CO., LTD.
PRESIDENT, Naotaro Hikida