Financial and Business Results

Overview of the Fiscal Year Ended February 2024

In the consolidated fiscal year under review (from March 1, 2023 to February 29, 2024), the Japanese economy showed signs of recovery as socioeconomic activities normalized due to the transition of COVID-19 to a different disease classification. Meanwhile, uncertainties remain in the outlook, such as concerns about a slowdown in consumption due to continued price increases.
In the drugstore industry, there was growth in demand for cosmetics due to the easing of behavioral restrictions, a recovery in demand from inbound tourists, and an increase in the number of cold and flu patients, resulting in growth in demand for related products. However, the business environment surrounding the Group is becoming more challenging because of a decline in the prescription unit price, which has been affected by the revisions to drug prices and certain dispensing fees, a decline in sales of COVID-related products as the pandemic subsides, consumers becoming more thrifty and selective due to price increases, and intensifying competition across industries and within the same industry.
In this environment, we strived to further expand our prescription dispensing field by opening new stores and enlarging or renovating dispensing rooms and waiting rooms in order to respond to an increase in the number of prescriptions to be filled.
In home dispensing, where the market is expected to expand, we opened stores dedicated to home dispensing and worked to create a framework that can address community healthcare by strengthening coordination with Japan Hospice Holdings Inc., our capital and business alliance partner. We also sought to improve the quality of interpersonal services by strengthening professional training for pharmacists, and strived to acquire more high-dose prescriptions to strengthen our revenue base in the prescription dispensing field.
In the merchandising field, we strengthened store openings in areas where the flow of people and the increase in inbound tourists are prominent, and also worked to increase sales in urban areas, including inbound tourist demand, by renovating existing stores and starting to handle new product lines. At the same time, we aggressively renovated existing stores in the suburbs to acquire new customers by enhancing our product lineup to meet local needs. We also worked proactively to distribute optimal information and coupons to individual customers using the SUGI Pharmacy app to increase the number of items purchased.
For sustainability management, we addressed various ESG priority issues (issues of materiality). To realize a carbon-free society, we increased the number of stores with rooftop solar panels and promoted the introduction of renewable energy through the third-party ownership model. To achieve a recycling-oriented society, we increased the number of stores that serve as collection bases for PET bottles and medicine sheets, and carried out recycling activities. We also continued donations to food banks to help address social problems, such as food loss and poverty. In addition, we enhanced various human capital disclosures in light of the growing international awareness of human capital disclosure and our corporate social responsibility.
Regarding the number of stores, we continued to focus on opening stores in the Kanto, Chubu, Kansai, and Hokuriku Shinshu areas, and opened 144 new stores, closed 20 stores, and acquired 29 stores. We also renovated 329 stores to make existing stores more competitive. Consequently, the number of our stores at the end of the consolidated fiscal year under review was 1,718 (an increase of 153 stores from the end of the previous fiscal year).
As a result of the above, we marked the figures below:
Net sales of 744,477 million yen (up 11.5%, or 76,830 million yen, year on year)
Gross profit of 228,837 million yen (up 13.0%, or 26,313 million yen, year on year)
SG&A expenses of 192,215 million yen (up 12.5%, or 21,349 million yen, year on year)
Operating income of 36,622 million yen (up 15.7%, or 4,964 million yen, year on year)
Ordinary income of 38,039 million yen (up 17.4%, or 5,647 million yen, year on year)
Profit attributable to owners of parent of 21,979 million yen (up 15.6%, or 2,972 million yen, year on year)
The SUGI Holdings Group encompasses a single business segment, so descriptions by segment have been omitted.

Outlook for the Fiscal Year Ending February 2025

Regarding the Japanese economy, although the recovery is expected to continue, the outlook remains uncertain due to fluctuations in financial and capital markets, inflationary pressures, and the worsening labor shortage.
In the drugstore industry, the business environment is expected to remain unpredictable not only because of moves toward alliances triggered by the business integration between major companies, and intensifying competition resulting from companies’ aggressive store openings, but also because of the impact of the revision of drug prices and dispensing fees.
In this environment, we will accelerate our efforts to achieve net sales of 1 trillion yen, which we have set out in our medium-term management plan. In the field of prescription dispensing, we will transfer the handling of drugs to medical office workers, train pharmacists, make full use of digital technology, and ensure closer cooperation with medical institutions. By doing so, we will strive to further increase our productivity and reinforce the quality of communication with customers. In the merchandising field, we will strive to provide even better services to customers by ensuring that our product lineup and store environment keep up with changes in lifestyles of customers in the community and by enhancing in-store operating efficiency, and aim to reduce costs and improve investment efficiency by promoting DX.
We expect that these initiatives will lead us to achieve consolidated results for the next consolidated fiscal year as follows: net sales of 810.0 billion yen (up 8.8% year on year); operating income of 40.0 billion yen (up 9.2% year on year); ordinary income of 41.5 billion yen (up 9.1% year on year), and profit attributable to owners of parent of 25.0 billion yen (up 13.7% year on year).


The business forecast above is based on the information available as of the day when this material was released. It is possible that the actual business results will be different from the forecast figures due to various factors arising in the future.

Shareholder Benefits/Dividends

Shareholder Benefit Program

Securities code: 7649

  The Company implements a shareholder special benefit plan for shareholders who own 100 shares (one unit) or more and are listed or recorded in our shareholder registry as of the last day of February every year, with the aim of responding to their constant support and deepening their understanding of our products.
  Due to the recent stock split effective March 1, 2024, we will make the following changes to our shareholder special benefit plan to expand the number of shareholders eligible for the shareholder benefit.
  In addition, shareholder complimentary coupons can also be converted to "Sugi Points," electronic points, to improve the convenience of the shareholder special benefit plan.

(1) Details of current shareholder special benefit plan

No. of Shares Held Details of Special Benefits
100 or more but less than 1,000 shares Complimentary coupons worth 3,000 yen
1,000 shares or more Complimentary coupons worth 5,000 yen

(2) Details of shareholder benefit after stock split

No. of Shares Held Details of Special Benefits
100 or more but less than 300 shares Complimentary coupons worth 1,000 yen or 2,000 Sugi Points (worth 1,000 yen)
300 or more but less than 3,000 shares Complimentary coupons worth 3,000 yen or 6,000 Sugi Points (worth 3,000 yen)
3,000 shares or more Complimentary coupons worth 5,000 yen or 10,000 Sugi points (worth 5,000 yen)

* The "Shareholder's Complimentary Passport," which adds 150 Sugi Points for every 3,000 yen of shopping, will remain as before.

(3) Timing of change

  The revised standard will apply to the shareholders listed or recorded in the shareholder register as of the last day of February 2025. Since the stock split is effective March 1, 2024, the Company will implement the shareholder special benefit with a reference date of the last day of February 2024 based on the current standards.


Dividends Unit 2016 2017 2018 2019
Dividend per share yen 45.0 50.0 60.0 70.0
Payout ratio % 19.5 21.1 23.1 24.3
Dividends Unit 2020 2021 2022 2023
Dividend per share yen 80.0 80.0 80.0 80.0
Payout ratio % 23.8 23.4 25.5 25.7
Dividends Unit 2024 2025 2026 2027
Dividend per share yen 80.0
Payout ratio % 22.0