Pan Pacific International Holdings, the company that operates the Don Quijote discount chain, reported on Wednesday a net profit of 66.1 billion yen ($455 million) for the fiscal year ending June, hitting a record profit for the 14 consecutive year thanks to foreign tourist spending.
Revenue reached 1.9 trillion yen, and operating profit was at 105 billion yen, crossing the 100 billion yen mark for the first time.
PPIH said it has benefited from a recovery in spending by foreign tourists visiting Japan, accelerated by the depreciation of the yen and their enthusiasm for being freed from paying Japan’s 10% consumption tax on purchases of 5,000 yen or more, a benefit Don Quijote actively promotes.
For the January-March quarter, the company had reported sales and operating profit at its discount store business have been rising steadily due to “increased demand for outings and recovery of inbound travel.”
“We have strengthened the ‘power to earn,'” Naoki Yoshida, president and CEO, said at a news conference on Wednesday. He added that the company endeavors to gain strength in this new age of inflation, to devise strategies to increase unit price per customer spending and find new ways to get shoppers coming back more frequently.
By nationality, South Koreans continue to lead the way in tax-free sales. For the January-March quarter, the company reported an increase in customers from Taiwan during the Chinese New Year string of holidays in late January.
Now with China lifting its ban on group travel, sales are expected to rise even further, Yoshida said. For the year ending June 2024, the operator expects to make 80 billion yen in tax-free sales.
PPIH has expanded into Singapore, Thailand, Taiwan and Hong Kong, where its stores are called Don Don Donki. Yoshida has mentioned that the company needs more time to reach higher profits overseas.
The operator plans to add 12 more overseas locations and at least 25 in Japan.
PPIH said it expects its operating profit margin to remain over 5% in fiscal 2024.