Pan Pacific International Holdings Corporation

Business Details

Operates the discount format "Don Quijote", "MEGA Don Quijote", etc., and the general merchandise store format "Apita" and "Piago" nationwide. Also includes peripheral businesses such as the Credit Card & Electronic Money Business (UCS Co., Ltd.), real estate leasing, and food manufacturing/sales (Kanemi Foods Co., Ltd.). With "genba-shugi" (on-site-driven management) and "kotenshugi" (individual store autonomy) as differentiation pillars, growth drivers include inbound demand, private brand/OEM products, and new format development. As of the end of March 2026, the company operates 663 domestic stores.

Recent Overview

Net sales and profit both increased on higher food/daily necessities sales and rising inbound demand; new format "Robin Hood" announced

In the cumulative nine months of FY2026 (ending March 2026), the segment achieved net sales of ¥1,546,349 million (up 8.7% year on year) and operating profit of ¥130,505 million (up 4.8% year on year). Enhanced promotional measures in response to growing consumer cost-consciousness increased customer traffic, expanding food and daily necessities sales. Value-added products such as skincare also performed well. Tax-exempt sales increased due to diversified promotions. In the first quarter, Kanemi Foods Co., Ltd. was made a consolidated subsidiary (goodwill of ¥1,699 million arose). In March 2026, the strategy for the new format "Robin Hood" was announced, targeting expansion to 200-300 stores by 2035. In the cumulative nine months of the third quarter, 10 new domestic stores were opened (Don Quijote Co., Ltd.). SG&A expenses increased due to new store openings, minimum wage increases, an increase in subsidiaries subject to the size-based corporate tax, and increased tax-exemption-related costs, but operating profit still increased.

Key Products

Growth Drivers

• Expansion of inbound demand: tax-exempt sales increased due to diversified promotions not dependent on specific countries/regions and expanded product offerings for foreign visitors to Japan
• Expansion of food and daily necessities sales: enhanced promotional measures in response to growing cost-consciousness increased customer traffic and expanded the food and daily necessities categories
• Strong performance of value-added products: sales of highly preference-driven products such as skincare items and trend products performed well, raising spending per customer
• Sales expansion through new store openings: 10 domestic stores opened in the cumulative nine months of the third quarter, expanding to 663 stores as of the end of March 2026; the share exchange with the Olympic Group (effective July 1, 2026) is expected to further expand the store network in the greater Tokyo metropolitan area
• Rollout of the new format "Robin Hood": a food-enhanced new format combining UNY's fresh food procurement capabilities with Donki's non-food capabilities, planned for expansion to 200-300 stores by 2035
• Strengthening of majica member services: continued contribution to repeat customer acquisition and higher spending per customer through member-exclusive measures
• Consolidation of Kanemi Foods Co., Ltd.: strengthened product competitiveness through in-house food manufacturing and sales capabilities

Risks

• Rising labor costs: increases in the minimum wage and labor shortages are pushing up SG&A expenses, risking pressure on the operating margin
• Intensifying price competition with competitors: price competition among discount formats is accelerating amid growing consumer cost-consciousness
• Volatility risk in inbound demand: geopolitical risks such as deteriorating Japan-China relations or the impact of US trade policy could reduce the number of foreign visitors to Japan, affecting tax-exempt sales
• Rising procurement costs due to price inflation: continued price increases in food and daily necessities risk pushing up cost of sales
• Increase in subsidiaries subject to the size-based corporate tax: expansion of subsidiaries subject to this tax increases the tax burden, risking higher SG&A expenses
• Goodwill recognition risk from the Olympic Group integration: the amount of goodwill and amortization burden arising after the business combination via share exchange (planned for July 1, 2026) has not yet been determined
• Occurrence of impairment losses: an impairment loss of ¥105 million was recognized in the Domestic Business segment in the cumulative nine months of the third quarter, and the existence of unprofitable stores poses a risk of dragging down earnings