J. Front Retailing Co., Ltd. · TSE:3086
J. Front Retailing — FY2024 Earnings Presentation
43 slides from J. Front Retailing's earnings presentation, Apr 14, 2025
Slide 1: Presentation of Results for Fiscal Year Ended February 28, 2025
～ No Change, No Growth. ～ Presentation of Results for Fiscal Year Ended February 28, 2025 April 14, 2025 J. Front Retailing Co., Ltd. Create and Bring to Life “New Happiness.”
Slide 2: Today's Agenda
Today’s Agenda I. FY2024 Results and FY2025 Forecast II. Progress of FY2024 - FY2026 Medium-term Business Plan 1
Slide 3: FY2024 Results and FY2025 Forecast
FY2024 Results and FY2025 Forecast NAGAMINE Takamasa Executive Officer Senior Executive General Manager, Financial Strategy Unit J. Front Retailing Co., Ltd. Create and Bring to Life “New Happiness.” 2
Slide 4: FY2024 Consolidated PL Results (IFRS)
FY2024 Consolidated PL Results (IFRS) Top-line growth in Department Store and SC Businesses that captured domestic and overseas demand contributed to significant profit increase Each profit item reached a record high, and business profit achieved the medium-term plan target of ¥52.0 billion two year
Slide 5: Segment Information (IFRS)
Segment Information (IFRS) (Billions of yen, unless otherwise stated) H1 H2 Full year Fiscal year ended February 28, 2025 Results % YoY Results % YoY Results % YoY Gross sales 399.0 14.2) 425.7 6.7) 824.7 10.2) Department Revenue 127.2 13.3) 136.3 7.6) 263.6 10.3) Store Business profit 20.0 73.1) 13
Slide 6: Segment Information (IFRS): Main Reasons for Changes
Segment Information (IFRS): Main Reasons for Changes Department Store Business Sales grew by steadily capturing domestic and overseas demand, particularly in luxury category, which has been strategically strengthened. Gaisho sales grew 5%, while sales to inbound tourists (inbound sales) doubled to ¥
Slide 7: Daimaru Matsuzakaya Department Stores Major Store Sales
Daimaru Matsuzakaya Department Stores Major Store Sales Total directly managed store sales maintained high growth, led by Shinsaibashi store and Sapporo store, which are strong in inbound sales Nagoya store is currently undergoing major renovations across eight floors, which is planned to complete i
Slide 8: Daimaru Matsuzakaya Department Stores Inbound Sales
Daimaru Matsuzakaya Department Stores Inbound Sales Despite temporary slowdown in midyear due to sharp appreciation of the yen, annual sales doubled from pre-COVID level Share of China recovered to over 60% mainly due to increased average spend per customer, but customer numbers have yet to recover,
Slide 9: FY2024 SGA Analysis
Daimaru Matsuzakaya Department Stores SGA Analysis (IFRS) FY2024 SGA analysis Decrease in (Millions of yen) Decrease in packing and operation transportation Increase in costs costs personnel (7) (88) (133) expenses (1,269) (154) Increase in Decrease in 800 Decrease in other SGA depreciation ad expen
Slide 10: PARCO Major Store Tenant Transaction Volume Percentage Change
PARCO Major Store Tenant Transaction Volume Percentage Change Revenue grew significantly at core stores, particularly Shibuya and Shinsaibashi PARCO, which are strong in inbound sales With urban stores driving the overall performance, double-digit growth in total comparable store transaction volume
Slide 11: Consolidated BS Results (IFRS)
Consolidated BS Results (IFRS) Total assets were ¥1,164.1 billion, up ¥49.4 billion from the end of the previous fiscal year Interest-bearing liabilities (excluding lease liabilities) were ¥190.0 billion, down ¥23.8 billion from the end of the previous fiscal year Equity attributable to owners of pa
Slide 12: Consolidated CF Results (IFRS)
Consolidated CF Results (IFRS) Net cash provided by operating activities was ¥85.8 billion, down ¥4.8 billion YoY, due to an increase in working capital, despite an increase in profit Net cash used in investing activities increased by ¥41.7 billion mainly due to renovation of Nagoya store and acquis
Slide 13: FY2025 Business Environment Awareness
FY2025 Business Environment Awareness ＋） Favorable employment environment and high wage increases expected to spread ＋） Expansion of the affluent market against a backdrop of asset effects and asset transfers ±） Despite current uncertain inbound sales, outlook for medium- to long-term potential rema
Slide 14: FY2025 Consolidated PL Forecast (IFRS)
FY2025 Consolidated PL Forecast (IFRS) Despite the phase of expenses and upfront investment associated with promoting transformation, business profit is expected to increase steadily Operating profit and profit attributable to owners of parent are expected to decrease due to the absence of ¥8.5 bill
Slide 15: Segment Performance Forecast (IFRS)
Segment Performance Forecast (IFRS) (Billions of yen, unless otherwise stated) H1 H2 Full year Fiscal year ending February 28, 2026 Forecast % YoY Forecast % YoY Forecast % YoY Gross sales 421.5 5.6) 437.9 2.9) 859.4 4.2) Department Revenue 134.0 5.3) 140.2 2.8) 274.2 4.0) Store Business profit 20.1
Slide 16: Segment Information (IFRS): Main Reasons for Changes
Segment Information (IFRS): Main Reasons for Changes Department Store Business While steadily capturing the affluent market, the domestic market will grow steadily due to effective measures. Uncertainties in inbound sales will be offset by Osaka Expo and overseas CRM effects, resulting in increased
Slide 17: Daimaru Matsuzakaya Department Stores Major Store Sales Forecast
Daimaru Matsuzakaya Department Stores Major Store Sales Forecast Expect increase in sales at core stores, excluding Umeda store, and double-digit increase at Nagoya store due to renovation effects Expect decrease in sales at Sapporo store in H2 due to impact of renovation work of luxury floors, but
Slide 18: FY2025 SGA Analysis
Daimaru Matsuzakaya Department Stores SGA Analysis (IFRS) (Millions of yen) FY2025 Decrease in SGA analysis Increase in other SGA Increase in depreciation Increase in packing and (223) 242 personnel transportation 1,063 expenses costs Increase in ・Increase in commissions due to sales growth (¥1.3 bn
Slide 19: Consolidated BS Forecast (IFRS)
Consolidated BS Forecast (IFRS) Total assets are expected to be ¥1,180.0 billion, up ¥15.8 billion from the end of the previous fiscal year Interest-bearing liabilities (excluding lease liabilities) are expected to be ¥206.0 billion, up ¥15.9 billion from the end of the previous fiscal year Ratio of
Slide 20: Consolidated CF Forecast (IFRS)
Consolidated CF Forecast (IFRS) Net cash provided by operating activities is expected to be ¥70.0 billion due to an increase in working capital and income tax payments Net cash used in investing activities is expected to be ¥50.0 billion, with a plan for capital investment mainly in Department Store
Slide 21: Share Buyback
Share Buyback “Achieve growth with profitability” and “optimize the amount of equity capital and strengthen shareholder return” to improve capital profitability over the medium to long term Class of shares to be acquired Common shares Total number of shares that Up to 11,500,000 shares can be acquir
Slide 22: Progress of FY2024 - FY2026 Medium-term Business Plan
Progress of FY2024 - FY2026 Medium-term Business Plan ONO Keiichi President and Representative Executive Officer J. Front Retailing Co., Ltd. Create and Bring to Life “New Happiness.” 21
Slide 23: Review of FY2024 (1)
Review of FY2024 (1) Promoted transformation for future growth Co-creation of Excitement Co-prosperity with Communities Values Co-existence with the Environment Customer Area Synergies Content True “integration” of the Group As 22
Slide 24: Review of FY2024 (2)
Review of FY2024 (2) Establish “overwhelming presence” in Sakae, Nagoya and Shinsaibashi, Osaka Sakae, Nagoya Shinsaibashi, Osaka Promoted renovation of Matsuzakaya/PARCO Acquired properties and participated in redevelopment (Provisional) Shinsaibashi Project Nagahori-dori Shinsaibashi St. Nishishin
Slide 25: Review of FY2024 (3)
Review of FY2024 (3) Further expand the Group’s customer assets through establishment of new foundation Issued new cards of PARCO and GINZA SIX Full-scale operation of CRM for inbound tourists 24
Slide 26: Review of FY2024 (4)
Review of FY2024 (4) Growth not limited by store size Established business succession fund Entered reuse business Started independent IP business 25
Slide 27: Review of FY2024 (5)
Review of FY2024 (5) Achieved “record-high profit” due to tailwind as well as investment effects Business profit past 10 years Rebuilt the main bldg. of Daimaru Shinsaibashi New Shibuya PARCO opened (Billions of yen) GINZA SIX opened Shinsaibashi PARCO opened 53.4 48.0 46.8 45.5 44.5 45.3 44.3 24.8
Slide 28: Review of FY2024 (6)
Review of FY2024 (6) Factors behind strong performance in FY2024 Department Store Consumption by the affluent was strong and duty-free sales grew more than initially expected. Parco Increased transaction volume led to rental income and improved profitability. In particular, duty-free transaction vol
Slide 29: Upward Revision of Numerical Targets in Medium-term Business Plan
Upward Revision of Numerical Targets in Medium-term Business Plan Prioritize aggressive investment and acceleration of speed of transformation Key Initial performance New target Change indicator target Business profit ¥56.0 billion ¥52.0 billion +¥4.0 billion ROE 8.0% or more 8.0% or more ― ROIC 6.0
Slide 30: Business Profit by Segment
Business Profit by Segment Bring forward investment for Department Store, upwardly revise business profit for SC and Developer Results Updated Initial plan (FY2024) (FY2026) (FY2026) ¥53.4 bn ¥56.0 bn +¥4.0 bn Payment and Finance 3.6 ¥52.0 bn Payment and Finance 1.6 Developer 8.3 Developer 8.5 Payme
Slide 31: Cash Allocation
Cash Allocation Use increased cash inflow for aggressive investment in business growth and human resources FY2024 - FY2026 (3-year total) Investment plan (3-year total) Business investment Strategic Department Store investment ¥54.0 bn ¥195.0 bn Strategic investment +¥20.0 bn ¥65.0 bn from initial p
Slide 32: Initiatives for FY2025 and Beyond
Initiatives for FY2025 and Beyond Clarify “our vision” through strategic and aggressive investment Expanded development in “7 key areas” Deepening of retail Sapporo Expand existing businesses Evolution of synergies × “Sow the seeds” for the future” Kyoto Kobe Fukuoka Strengthening Tokyo 大阪 Nagoya of
Slide 33: Deepening of Retail Business: Inbound Sales/Department Store
Deepening of Retail Business “Inbound Sales/Department Store” Stabilization of rapidly growing inbound market Department Store Business duty-free sales Expansion of overseas customer base (Billions of yen) ► Full-scale operation of CRM 130.4 127.0 130.0 for inbound tourists Best communication tool 7
Slide 34: Deepening of Retail Business: Gaisho
Deepening of Retail Business “Gaisho” Expand share of affluent market, such as by expanding area of gaisho Department Store gaisho sales Expand area of gaisho <Widening> (Billions of yen) 235.0 225.0 ► Strengthen development in “blank” areas 201.6 211.4 ► Use digital technologies Renew dedicated web
Slide 35: Deepening of Retail Business: Inbound Sales/Parco
Deepening of Retail Business “Inbound Sales/Parco” Strengthen inbound sales with limited impact from exchange rates Inbound sales growth is driven by Japan mode and IP content Impact from exchange rates is limited Annual transaction volume (FY2024) Monthly transaction volume (Billions of yen) 15.0 ¥
Slide 36: Stores + Expansion of IP Content
Deepening of Retail Business “Stores + Expansion of IP Content” “PARCO” is moving to a new stage of growth Expand business area with a focus on highly unique merchandise (fashion and IP content) Accelerate renovation of core stores Expand the scope of IP content First major renovation since “new” Sh
Slide 37: Evolution of the Group Synergies: Sakae Area in Nagoya
Evolution of the Group Synergies “Sakae Area in Nagoya” First, maximize area value in Sakae area in Nagoya ► Matsuzakaya Nagoya Introduce content that captures next-generation market needs, such as fashion and art ► Nagoya PARCO Tokai area’s No.1 collection of fashion, entertainment, Matsuzakaya Nag
Slide 38: Evolution of the Group Synergies: Shinsaibashi and Umeda Areas in Osaka
Evolution of the Group Synergies “Shinsaibashi and Umeda Areas in Osaka” Area strategies based on regional characteristics Shinsaibashi area Umeda area Overwhelming expansion in area Pursue presence with originality centered around Midosuji and pursue efficiency Maximize revenue by bringing the Grou
Slide 39: Strengthen the Group's Management Base
Strengthen the Group’s Management Base Strengthen our ability to adapt to a “world with inflation and interest rates” Improve human productivity Improve business efficiency Strengthen business through DX restructuring Accelerate the Group-wide efforts to improve “human productivity” and “capital pro
Slide 40: Strengthen the Group's Management Base
Strengthen the Group’s Management Base Accelerate efforts to improve “human productivity” and “capital profitability” Improve business efficiency Reorganize construction and interior through DX design business and BM business (J. Front Design & Construction × Parco Space Systems) ► Utilize data and
Slide 41: ROIC Management
ROIC Management Ensure profitability that exceeds rising capital costs ROIC ＞ WACC (Recognized as 5.0 - 5.5%) ROE ＞ Cost of shareholders’ equity (Recognized as 7.5 - 8.0%) FY2024 FY2026 Segment ROIC results ROIC target WACC* Department Store 10.7% 10.8% 4 - 5% Consolidated SC 5.1% 5.4% 3 - 4% FY2026
Slide 42: Shareholder Return
Shareholder Return Optimize shareholders’ equity through continuous dividend increases and share buybacks ► Increase dividends based on a dividend payout ratio of 40% or higher. Annual dividends were ¥52 in FY2024 and are expected to be ¥54 in FY2025. ► Implement share buybacks of ¥15.0 billion in F
Slide 43: https://www.j-front-retailing.com
https://www.j-front-retailing.com Create and Bring to Life “New Happiness.” Forward-looking statements in this document represent our assumptions based on information currently available to us and inherently involve potential risks, uncertainties, and other factors. Therefore, actual results may dif