-To provide peace of mind and vitality through a delicious cup of coffee.
With the belief that this statement expresses the mission of the coffee shop industry, we will continue to pursue excellent quality and service and to create attractive shops.
- Results for the Fiscal Year Ended March 2007
- Franchise Business
- Wholesale Operations
- Management Principles
Results for the Fiscal Year Ended March 2007
During the fiscal year under review, we enjoyed solid growth in sales of directly operated shops and wholesale operations, resulting in consolidated net sales of \68,596 million, enabling us to maintain consecutive years of growth in revenues since our founding.
In shop expansion, we opened a total of 89 new shops, including 41 directly operated shops (19 Doutor Coffee Shops, 19 Excelsior Caffés and 3 other shops) and 48 franchise shops (42 Doutor Coffee Shops and 6 Excelsior Caffés). As a result, the number of Doutor Group stores totaled 1,470 shops at the end of the fiscal year, consisting of 303 directly operated shops and 1,167 franchise shops.
Franchise Business
In our franchise business, we continued our aggressive drive to renovate shops and completed renovations at 52 directly operated shops and 73 franchise stores, for a total of 125 shops. In addition, as a strategy for raising profitability at our existing shops, we endeavored to enhance the appeal of our shops, products and people by developing seasonal products, offering training for shop staff and promoting the separation of smoking and non-smoking areas. As a result, sales of directly operated shops increased 0.3% compared with the previous fiscal year. We will continue our efforts to develop products that meet the deeply held expectations of our customers.
Wholesale Operations
In our wholesale operations, we enjoyed steady sales of products such as drip café, while concentrating our efforts on chilled beverage products for convenience store chains by active sales activities including the launch of Hawaiian Host Chocolate Drink Macadamia, our first product released under another company’s brand, in addition to our original branded products, and as a result we were able to secure a 6.9% increase in year-on-year revenues.
Our subsidiary, Magna Inc., maintained steady sales growth in its direct-sales operations, and revenues from its nationwide maintenance service exceeded initial targets, accomplishing growth in both revenues and sales. Madeleine Confectionery Co., Ltd. transferred its head office and factory to Koto-ku, Tokyo, in August 2006 to expand production capacity. Despite a rise in expenses associated with the transfer, the company was also able to boost both revenues and sales.
Management Principles
- 1. Basic Principles of Management
- Upholding since our foundation the basic philosophy, “To provide peace of mind and vitality through a delicious cup of coffee,” we are committed to placing customers first and to enhancing the quality of our products, the atmosphere of our shops and the level of service to provide satisfaction to our customers.
While consistently adhering to these basics, in order to remain a sustainable business, we must grasp the dramatic changes that are taking place in the management environment as quickly as possible and respond to change in a timely manner. We are confident that our overall responsiveness constitutes the best strategy for providing satisfaction to customers who visit our shops and will lead to greater profits for our franchise shops and business partners, which in turn will enhance shareholder return. - 2. Management Targets
- Numerical targets for consolidated results for the half-year ending September 2007 are as follows:
- Net sales: \36,900 million (actual result for the half-year ended September 2006: \34,800 million)
- Ordinary income: \2,700 million (actual result for the half-year ended September 2006: \2,600 million)
- Net income: \1,200 million (actual result for the half-year ended September 2006: \1,100 million)
- 3. Mid- to Long-Term Management Strategy
- While the employment situation is recovering in line with improvements in corporate earnings, the outlook on personal consumption, including eating-out expenses, remains unclear due to concerns over rising crude oil prices and interest rates, as well as regional gaps in economic conditions. Therefore, the business environment is expected to remain harsh.
Against this background, in the domestic coffee shop market, the number of owner-managed coffee shops is declining, while the number of self-service coffee shops is steadily increasing and is expected to continue rising over the medium term.
Based on this forecast, we will strengthen our business by leveraging our competitive edges and by aggressively deploying our business under the following basic management strategies:- Generate new shop openings for Doutor Coffee Shops and Excelsior Caffés and promote steady, nationwide expansion.
- Solidly enhance the appeal of our shops, products and services.
- Improve profitability of our wholesale operations.
