Fiscal year ending May 2023First Quarter Financial Results [JGAAP] (Consolidated)

September 20, 2022

Listed company name

Tsuruha Holdings Inc.

Listed exchangeeast

Code number

3391

URLhttps://www.tsuruha-hd.com

Representative

(Title)

President and CEO

(family name)Jun Tsuruha

Contact person

(Title)

Executive Officer General Manager of Administration Headquarters

(family name)Makoto Murakami

TEL011-783-2755

Scheduled quarterly report submission date

September 29, 2022

Scheduled payment start date

－

Whether or not supplementary explanatory materials for quarterly financial results have been created:Yes

Whether or not a quarterly Financial results announcement is held:Yes

(For institutional investors and analysts)

(Rounded down to the nearest million yen)

1. Consolidated financial results for the first quarter of the fiscal year ending May 2023 (May 16, 2022 to August 15, 2022)

(1) Consolidated business results (cumulative)

(% Display is the rate of increase / decrease from the same quarter of the previous year)

	amount of sales		Operating income		Ordinary profit		Attribution to the shareholders of the parent company Quarterly net income
	One million yen	％	One million yen	％	One million yen	％	One million yen	％
First quarter of the fiscal year ending May 2023	243,181	3.2	13,317	3.3	13,357	3.2	7,501	△0.5
First quarter of the fiscal year ending May 2022	235,684	4.9	12,889	△15.0	12,944	△15.6	7,536	△17.5

(Note) Comprehensive income

First quarter of the fiscal year ending May 2023

11,446

One million yen

（22.7％）

First quarter of the fiscal year ending May 2022

9,330

One million yen

（△35.9％）

	Per share Quarterly net income	After adjusting for potential stock Per share Quarterly net income
	Yen	Yen
First quarter of the fiscal year ending May 2023	154.48	154.03
First quarter of the fiscal year ending May 2022	155.27	154.77

(2) Consolidated financial position

	Total assets	Net worth	Capital adequacy ratio	Book value per share
	One million yen	One million yen	％	Yen
First quarter of the fiscal year ending May 2023	520,531	290,846	50.8	5,444.06
May 2022	562,363	284,046	45.9	5,314.48

(Reference) Equity

First quarter of the fiscal year ending May 2023

264,392

One million yen

May 2022

258,035

One million yen

2. 2. Dividend status

	Annual dividend
	End of first quarter	End of second quarter	End of third quarter	Term end	total
	Yen	Yen	Yen	Yen	Yen
May 2022	－	83.50	－	83.50	167.00
Fiscal year ending May 2023	－
Fiscal Year Ending May 2023 (Forecast)		116.50	－	116.50	233.00

(Note) Whether or not there is any revision from the recently announced dividend forecast:Nothing

3. Consolidated earnings forecast for the fiscal year ending May 2023 (May 16, 2022 to May 15, 2023)

(Percentages indicate year-on-year changes for the full year, and year-on-year changes for quarters.)

	amount of sales		Operating income		Ordinary profit		Attribution to parent company shareholders Net income		Per share Net income
	One million yen	％	One million yen	％	One million yen	％	One million yen	％	Yen
Second quarter (cumulative)	481,700	4.1	21,900	△3.6	21,949	△3.0	12,600	△1.1	259.51
Full year	968,800	5.8	42,700	5.3	42,571	6.3	22,640	5.9	466.29

(Note) Whether or not there is any revision from the latest announced business forecast:Nothing

* Notes

(1) Changes in significant subsidiaries during the current quarterly consolidated cumulative period (changes in specified subsidiaries due to changes in the scope of consolidation):Nothing

(2) Application of accounting treatment specific to the preparation of quarterly consolidated financial statements:Yes

(3) Changes in accounting policies, changes in accounting estimates, and restatements of revisions

① Changes in accounting policies due to revisions to accounting standards, etc .:Nothing

(2) Changes in accounting policies other than (1):Nothing

③ Change of accounting estimateNothing

④ Correction redisplayNothing

(4) Number of issued shares (common stock)

① Number of issued shares at the end of the period (including treasury stock)	1Q of May 2023	49,452,068	stock	May 2022	49,439,968	stock
② Number of treasury stock at the end of the period	1Q of May 2023	886,721	stock	May 2022	886,655	stock
③ Average number of shares during the period (cumulative quarterly)	1Q of May 2023	48,561,357	stock	1Q of May 2022	48,537,138	stock

* Quarterly financial statements are not subject to quarterly reviews by certified accountants or audit corporations.

* Explanation of proper use of business forecasts and other special notes

The forecast figures contained in this document are forecasts based on currently available information and contain many uncertainties. Actual results may differ from the above figures due to changes in business conditions. Please refer to page 2 of the attachment for matters related to the above forecasts.

○ Contents of attached materials

1. Qualitative Information on Quarterly Financial Results ………………………………………	2
(1) Explanation of operating results …………………………………………………………………………………………	2
(2) Explanation of financial position …………………………………………………………………………………………	2
(3) Explanation of future forecast information such as consolidated earnings forecasts ……………………	2
2. Quarterly Consolidated Financial Statements and Major Notes ……………………	3
(1) Quarterly Consolidated Balance Sheets …………………………………………………………………………………	3
(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income	5
Quarterly Consolidated Income Statement …………………………………………………………
1st quarter consolidated cumulative period …………………………	5
Quarterly Consolidated Statement of Comprehensive Income …………………………………………
1st quarter consolidated cumulative period …………………………	6
(3) Notes to Quarterly Consolidated Financial Statements	7
(Note regarding going concern assumption) ……………………	7
(Note when there is a significant change in the amount of shareholders' equity) ………………	7
(Application of special accounting treatment for the preparation of quarterly consolidated financial statements)	7

1. Qualitative information on quarterly financial results

(1) Explanation of operating results

In the first quarter of the current consolidated cumulative period (May 16, 2022 to August 15, 2022), the economic situation is that the flow of people is returning amid the resurgence of the new coronavirus infection, but prices are rising. Consumer sentiment remained weak.

In the drugstore industry, the business environment has become more severe due to a reactionary decline in demand from people staying at home and soaring utility bills, while the competition to open new stores continues.

Under these circumstances, the Group will work to improve customer service while listening to customer feedback, introduce meat, fruits and vegetables, and 100-yen shops, and promote the establishment of dispensing pharmacies alongside stay-at-home demand. We have been working to strengthen the

In addition, as a DX strategy, we worked to increase the number of app members and utilize customer data for sales promotions, while working to renovate and expand our private brands into new brands, Kurashi Rhythm and Kurashi Rhythm MEDICAL.

Regarding store development, as a result of restructuring and closing unprofitable stores to strengthen competitiveness, we opened 32 new stores and closed 32 stores from the beginning of the fiscal year. The number of group stores in 2,523 directly managed stores.

The store openings and closings of the Group are as follows (unit: store)

	End of the previous fiscal year Number of stores	branch store	Subsidiary etc.	closed	Net increase	End of first quarter Number of stores	home Dispensing pharmacy
Hokkaido	422	1	－	8	△7	415	113
East and North	570	6	1	9	△2	568	117
Kanto Koshinetsu	520	7	－	5	2	522	205
Chubu / Kansai	247	5	－	4	1	248	139
China	326	6	－	－	6	332	112
Shikoku	220	4	－	－	4	224	66
Kyushu / Okinawa	217	3	－	6	△3	214	31
Domestic store total	2,522	32	1	32	1	2,523	783

In addition to the above, we have 17 overseas stores and 6 franchise stores.

As a result, in the first quarter of the fiscal year under review, sales were 243,181 million yen (up 3.2% year-on-year), operating income was 13,317 million yen (up 3.3% year-on-year), and ordinary income was 133 million yen. 57 million yen (up 3.2% year-on-year), and profit attributable to owners of parent of 7,501 million yen (down 0.5% year-on-year).

(2) Explanation of financial position

Total assets at the end of the first quarter of the current consolidated fiscal year decreased by 41,832 million yen from the end of the previous consolidated fiscal year to 520,531 million yen.

Total liabilities decreased by 48,633 million yen from the end of the previous consolidated fiscal year to 229,684 million yen.

The main reason for the decrease in total assets and total liabilities was the decrease in cash and deposits and accounts payable, etc., due to the fact that the end of the previous consolidated fiscal year was a holiday for financial institutions.

Total net assets increased by 6.8 billion yen from the end of the previous consolidated fiscal year to 290.846 billion yen.

As a result of the above, the equity ratio increased by 4.9 percentage points to 50.8%.

(3) Explanation of future forecast information such as consolidated earnings forecasts

There is no change in the full-year earnings forecast announced on June 21, 2022.

2. 2. Quarterly consolidated financial statements and main notes

(1) Quarterly consolidated balance sheet

		(Unit: million yen)
	Previous consolidated fiscal year (May 15, 2022)	Current first quarter consolidated accounting period (August 15, 2022)
Assets
current assets
Cash and deposits	127,026	80,473
accounts receivable	49,155	41,718
Product	132,314	134,288
Raw materials and supplies	121	120
Short-term loans receivable	1	1
others	19,895	21,216
Total current assets	328,514	277,818
Fixed asset
Tangible fixed assets
Buildings and structures (net)	52,948	55,798
Mechanical equipment and carriers (net amount)	0	0
Tools, utensils and equipment (net)	14,702	15,167
land	14,435	14,581
Lease assets (net amount)	7,098	8,076
Construction in progress	2,113	1,855
Total property, plant and equipment	91,299	95,479
Intangible fixed assets
Goodwill	34,281	33,298
Software	2,494	2,766
Telephone subscription right	104	104
others	1,145	1,488
Total intangible assets	38,025	37,658
Investments and other assets
Investment securities	26,723	30,857
Long-term loan	9	9
Deferred tax asset	6,647	6,501
Deposit deposit	65,481	66,270
others	5,723	5,996
Allowance for doubtful accounts	△62	△62
Total investment and other assets	104,523	109,574
Total fixed assets	233,849	242,712
Total assets	562,363	520,531

		(Unit: million yen)
	Previous consolidated fiscal year (May 15, 2022)	Current first quarter consolidated accounting period (August 15, 2022)
Debt section
Current Liabilities
Accounts payable	155,660	111,489
Long-term borrowing scheduled to be repaid within one year	7,200	7,200
Accounts payable	20,347	16,819
Lease debt	551	531
Income taxes payable, etc.	5,278	5,171
Contract liability	10,418	11,792
Bonus reserve	5,996	3,228
Reserve for directors' bonuses	680	161
Point reserve	291	296
others	7,188	8,214
Total current liabilities	213,613	164,906
Fixed liabilities
Long-term borrowing	39,475	37,675
Lease debt	8,294	9,429
Deferred tax liability	5,204	6,327
Retirement Benefit Revenue	4,119	2,984
Asset retirement obligations	3,847	3,894
others	3,763	4,466
Total fixed liabilities	64,704	64,777
Total debt	278,317	229,684
Of Net Assets
Shareholders' equity
Capital	11,322	11,339
Capital surplus	29,375	29,392
an earned surplus	205,714	209,161
Treasury stock	△5,312	△5,313
Total shareholders' equity	241,098	244,579
Accumulated other comprehensive income
Valuation difference on other securities	16,988	19,856
Accumulated adjustment for retirement benefits	△52	△43
Total other comprehensive income	16,936	19,812
Stock acquisition right	2,269	2,383
Non-controlling interests	23,740	24,070
Total net assets	284,046	290,846
Total liabilities and net assets	562,363	520,531

(2) Quarterly consolidated income statement and quarterly consolidated income statement

(Quarterly consolidated income statement)

(First quarter consolidated cumulative period)

		(Unit: million yen)
	First quarter of the previous consolidated cumulative period (Own May 16, 2021 To August 15, 2021)	First quarter consolidated cumulative period (From May 16, 2022 To August 15, 2022)
amount of sales	235,684	243,181
Cost of sales	166,558	170,806
Gross profit	69,126	72,374
Selling, general and administrative expenses	56,237	59,057
Operating income	12,889	13,317
Non-operating income
Interest income	32	30
Dividend income	74	77
Equipment donations	92	139
Rent received	57	59
Compensation received	150	23
Insurance money received	33	10
others	131	109
Total non-operating income	572	449
Non-operating expenses
Interest expense	171	265
Premature cancellation penalty	－	68
Closed store related expenses	239	71
others	106	3
Total non-operating expenses	516	408
Ordinary profit	12,944	13,357
Extraordinary benefit
Gain on sales of fixed assets	0	－
Subsidy income	25	－
others	0	－
Total extraordinary profit	27	－
Extraordinary loss
Loss on retirement of fixed assets	6	15
Impairment loss	－	68
Total extraordinary loss	6	84
Income before tax adjustment	12,965	13,273
Income Taxes	4,624	4,725
Quarterly net income	8,341	8,548
Quarterly net income attributable to non-controlling interests	804	1,046
Quarterly net income attributable to owners of the parent company	7,536	7,501

(Quarterly Consolidated Comprehensive Income Statement)

(First quarter consolidated cumulative period)

		(Unit: million yen)
	First quarter of the previous consolidated cumulative period (Own May 16, 2021 To August 15, 2021)	First quarter consolidated cumulative period (From May 16, 2022 To August 15, 2022)
Quarterly net income	8,341	8,548
Other comprehensive income
Valuation difference on other securities	968

Summary of financial results the 1st quarter fiscal FY05 / 2023 [Japanese standards] (consolidated) (HTML)

○ Contents of attached materials

1. Qualitative information on quarterly financial results

2. 2. Quarterly consolidated financial statements and main notes

(1) Quarterly consolidated balance sheet

(2) Quarterly consolidated income statement and quarterly consolidated income statement

(Quarterly consolidated income statement)

(First quarter consolidated cumulative period)

(Quarterly Consolidated Comprehensive Income Statement)

(First quarter consolidated cumulative period)