Financial Results for FY2020 2nd Quarter, March 1, 2020 to August 31, 2020 (Q2, 44th Fiscal Year)
I am truly grateful to all our valued shareholders for their support, especially during this difficult time of global pandemic.
Firstly, I wish to extend my most sincere best wishes to all those who have been impacted by the novel coronavirus infection (COVID-19) in many different ways. I would like to express my great respect and heartfelt gratitude to the healthcare professionals and others who are engaged in the fight against the disease and its spread.
The current fiscal year is the final year of our company’s Medium-Term Management Plan Part II”- We Love KOHNAN so much!! – Step on Accelerator Strategy.” Our business results are robust so far, thanks to the remodeling of our existing outlets that we have been undertaking since the start of the fiscal year and the increase in the number of customers in the wake of the spread of COVID-19. The good spring weather boosted sales of gardening and outdoor leisure activity goods while the extreme heat of the summer season pushed up seasonal merchandise such as air-conditioning equipment. Meanwhile the spread of COVID-19 increased demand on items for infection control. New lifestyles and increasing numbers of people working from home due to the disease contributed to the growth in sales of home related goods including DIY items and furniture. In summary, net sales for the first and second quarters were 222 billion 73 million yen (up 25.35% year-overyear). Gross profit was 84 billion 534 million yen (up 29.12% year-over-year), operating income was 21 billion 539 million yen (up 84.04% year-over-year), ordinary income was 20 billion 834 million yen (up 85.35% year-over-year) and net income increased to 12 billion 690 million yen (up 97.64% year-over-year). We achieved increases in both income and profit for the first and second quarters combined and posted record high figures in all profit-and-loss entries. This means that we are even closer to attaining the targets set for our Medium-Term Management Plan Part II. Our stores continue to grow in number, with 4 new Home Center stores opening and 9 new KOHNAN PRO stores, which has brought us to a total of 466 KOHNAN Group outlets (304 Home Center stores, 162 PRO stores).
In 2019 KOHNAN announced New Stage 2025, our long-term vision towards sustainable growth for the future. We aim to achieve a turnover of 500 billion yen by 2025 and become everyone’s favorite home and lifestyle company, a leading business in Japan catering for all customer needs around the home. We hope to build on our strength, our Kansai Dominant business operation. For this purpose, we have continued to open new stores and refurbish existing ones. In September, we opened a distribution center in Okayama and reinforced our logistics for product supply to Western Japan. In the Tokyo metropolitan area, BEAVERTOZAN, KEN DEPOT CORPORATION and DOIT CO., LTD have all developed their own distinctive strengths, by improving and strengthening their different appeal to customers by reinforcing products and lineups and remodeling stores. We look forward to seeing the fruits of our effort in the establishment of a new Dominant in Tokyo. In order to differentiate KOHNAN from competitors in the sector, we are starting to launch into new distribution channels. On September 4, we opened CAMP DEPOT Ohtorihigashi-Machi, a camping specialist store and a new retail channel for KOHNAN. It offers a very wide range of products at reasonable prices, targeting customers who are beginners or who have some experience of camping. The product range covers items that were not carried by traditional home centers. We also provide merchandise to satisfy outdoor enthusiasts’ demand for more niche products. We hope to build up our knowhow in the camping sector business and make it one of our corporate pillars. Our aim is to create total synergy within the KOHNAN Group, incorporating all new channels.
Higher Shareholder ReturnWe 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, we have decided to pay 58 yen per share to our valued shareholders as annual dividend, comprised of a dividend of 29 yen per share for both interim and year-end payouts, an increase in both of 2 yen per share. We have increased our dividend for 7 consecutive years, which we hope is welcome news that meet your expectations. As was announced in April 2020, we will enhance our shareholder special benefit program for shareholders who have held their shares continuously for more than 3 years. This will be applied as of the year-end dividend of February 2021. We trust that this enhancement will attract more ongoing support from you for a longer time.
In closing, we offer our sincere gratitude to all shareholders and request your continued and generous support for KOHNAN SHOJI CO., LTD.
November 10, 2020
KOHNAN SHOJI CO., LTD.
PRESIDENT, Naotaro Hikida