Japan: Joyful Honda sales and income increased in H1

In Q2 of FY2020 (ended 31 December 2019), Joyful Honda posted sales of JPY 76.0 bn (+1.6% YoY), operating profit of JPY 5.6 bn (+34.1% YoY) and recurring profit of JPY 6.2 bn (+27.6% YoY), resulting in higher sales and profits. Comparable store sales grew 2.7% YoY, driven by rushed demand prior to the consumption tax hike and demand for power outages and restoration following a typhoon. The large increase in profit was due to higher comparable store sales, an improved gross margin and a lower SG&A ratio. The gross profit margin improved by 0.8 percentage points to 28.2%. This was due to a 6.4% YoY increase in sales in the home improvement category such as building materials and DIY, and remodeling, which has a high gross margin and is the company’s most focused category. The SG&A ratio decreased 1.1% YoY due to a decrease in depreciation and amortization, a reduction in electricity consumption, a reduction in flyer costs through a review of sales promotion measures and a reduction in store labor costs through a reduction in total working hours. Under new president Mr. Hosoya, the company has set three key KPIs: improving the gross margin, increasing the number of items purchased and the ability to sell out flexibly.

Source: Diamond Home Center Magazine