Message from President and CEO

When I was in my late twenties, I went to the United States for the first time and stayed there for three years.
I remember that I was truly overcome by the huge land, the cheerful spirit of the people, and the awesome presence of gigantic shopping malls operating at the height of prosperity at that time. There was also the very fresh and strange feeling that everywhere we went, the local people were friendly called out to our Asian family: “Enjoy!”

A quarter-century has passed since that time, and our daily lives have become tremendously convenient. It is also true, however, that I miss those days when things were less convenient and less abundant than they are today. Such a feeling may be deeply connected with the fact that capitalist societies, which continuously pursued economic rationality and increased reproduction, are facing a big turning point.

In 1975, nearly half a century ago, Shoya Honda, the Company’s founder, decided its name would be “Joyful Honda.” He was a striking person with creative ideas and the ability to act. Those are our roots. When society at the time regarded loyalty and working diligently to be the sole principle, our founder had the vision that work should be a joy and we should create dreams together through joy. In that way he incorporated his vision into the Company’s name.
Getting back to those roots, we will work on creating an organization that will not be a tiny, neat group, but will make every effort to achieve exceptional performance in unique ways.

Furthermore, we really want to be deeply rooted in local communities, so that local people in our operational areas can have a sense of attachment to us. We want to become a place that facilitates meeting, communicating, and caring for each other, and to make people feel relaxed. We also aim to serve as a store that can cheer customers up a little through a visit. While keeping our founding principle always in mind, we will take on new challenges every day. Welcome to Joyful Honda!

[Review of the first nine months of FYE 6/20/2021]

In the first nine months of the fiscal year under review, uncertain outlook for the Japanese economy progressed further, as the impact of COVID-19 on the economy became prolonged with no signs of receding and the state of emergency was declared again in January primarily in the Tokyo metropolitan area such as Tokyo and Kanagawa Prefectures, where consumer spending was dampened by continued voluntary bans on going out and the government’s request for self-restraint on the restaurant business.

In the home center industry, the impact of the COVID-19 pandemic has been significant. People spend more time at home as they refrain from going out and more people work from home; individuals’ patterns of consumption and lifestyles have changed significantly. This has continued to underpin demand, centered on products related to COVID-19.

In this business environment, we have increased our efforts aimed at becoming the top “Living Space Innovator” in Japan, under the basic business policy for the current fiscal year, “All staff support essential work,” and the corporate mission, “Co-create the joy and dreams of communities by securing essential items and making proposals for a better life.”

As part of these efforts, we reorganized the Group, transferring a part of our stake in an unconsolidated subsidiary, Joyful Athletic Club Co., Ltd., in March to Think Fitness Corporation, an operator of the sports club Gold’s Gym, in an effort to improve the profitability of Joyful Athletic Club and create a synergy effect with the home center business.

Additionally, as part of our strategy to strengthen the core business, we opened Hondaya Kashiwa Toyoshiki Store in March in Kashiwa, Chiba Prefecture, as its third professional shop specializing in tools, hardware, working clothes, etc. for professional use. We will continue to open stores in regions with high professional demand, not just limited to Chiba Prefecture, while striving to become the dominant store in the region in cooperation with our home centers.

In January, with the objective of supporting the animal protection group activities as part of our ESG initiatives, we also started providing and publicizing a place for meetups with shelter dogs and cats, and providing administrative support. We did this jointly with RENSA, a general incorporated association with a wealth of experience in creating opportunities for potential pet adopters to meet shelter cats and dogs and SBI PRISM SSI Co., Ltd., a pet insurance company.

In terms of business performance, we achieved a higher overall profit-sales ratio in both “home” and “lifestyle” sectors. We did this through various efforts of immediately responding to new demand for essential goods amid the COVID-19 pandemic or recurrent natural disasters, executing structural reforms for earnings while making investments in future growth, strengthening merchandising measures, optimizing cost controls, and making proactive investments in new/existing stores.
As a result of promoting DX-based marketing and improving operating efficiency, we also achieved a reduction in advertising costs and total work time. These measures and actions brought us good results.

In the home-related sector, materials and professional products, primarily DIY-related ones such as wood and tools used at home (for repairs and creating teleworking spaces) or in the garden (for building decks and fences, and setting down artificial lawns), showed robust sales in the wake of the trend for self-renovation. In addition, sales of gardening and farming products such as flower/vegetable seedlings, plants, compost, and plant pots, ventilation-related products (humidifiers and purifiers) to help prevent COVID-19, and interior and living products including high-priced desks and chairs remained strong, benefitting from stay-at-home demand.
On the other hand, sales related to reform and renovation were poor, as strong sales of hot-water supply equipment and storage sheds were offset by the postponement of construction due to the COVID-19 pandemic and other factors.
As a result of the foregoing, net sales in the home-related sector for the first nine months of the fiscal year under review were 48,636 million yen.

In the lifestyle-related sector, sales of pet-related products aided by rising stay-at-home demand, sales of camping and other outdoor-related products supported by a desire to avoid crowds, and sales of arts and crafts products such as patchwork and handicraft supplies, and jigsaw puzzles remained strong.
Meanwhile, with regard to daily necessities, sales of masks, disinfectants, alcohol sterilizer, acrylic plates and other products that contribute to public health as part of measures to prevent COVID-19 remained strong, as we secured a stable supply. However, sales of daily consumables such as toilet paper and detergent, and liquor were sluggish, significantly affected by the backlash from last-minute demand before the consumption tax increase in 2019 and COVID-19 rush demand last year. Sales of rice, processed foods, and drinking water, as with daily consumables, were also slow partly because of the backlash from stockpiling triggered by COVID-19 rush demand last year. Sales of stationery and office supplies were also weak as sales of traveling bags/suitcases declined in the wake of voluntary bans on going out.
As a result of the foregoing, net sales in the lifestyle-related sector for the first nine months of the fiscal year under review were 49,454 million yen.

Accordingly, net sales for the first nine months were 98,090 million yen, with operating income of 8,321 million yen, ordinary income of 9,307 million yen, and profit of 6,309 million yen.

Full-Year Forecasts for FYE 6/20/2021 (6/21/2020 – 6/20/2021)

There is no change from the full-year forecasts reported in the “Notice of Full-Year Forecasts for FY2021, and Determination of Dividend of Surplus (Interim) and Announcement of Year-End Dividend Forecast,” published on February 2, 2021. In addition, the forecasts may differ significantly from actual results in the event that economic activities are significantly affected by the further spread of COVID-19, large-scale natural disasters, or other factors.

Net Sales Operating
income
Ordinary
income
Profit Profit per share
Full-Year Forecasts
for FYE 6/20/2021
(new forecast)
132,200  11,000  11,900  7,900  114.05 
(Reference) Previous
fiscal year results
(FYE 6/20/2020)
124,909  9,187  10,593    10,949  158.10 

[Current year] Fiscal year ending 6/20/2021 (June 21, 2020 – June 20, 2021)

1Q 2Q 3Q 4Q
JOYFUL HONDA CO., LTD. (the Company)
Current Reform Division of the Company
(Former Joyful Honda Reform Co., Ltd.)
Current Art & Craft Division of the Company
(Former Honda Sangyo Co., Ltd.)

[Previous year] Fiscal year ended 6/20/2020 (6/21/2019 – 6/20/2020)

1Q 2Q 3Q 4Q
JOYFUL HONDA CO., LTD. (the Company)
Current Reform Division of the Company
(Former Joyful Honda Reform Co., Ltd.)
Current Art & Craft Division of the Company
(Former Honda Sangyo Co., Ltd.)

*The shaded areas marked with ● in the table show the scope of inclusion of business results.