Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022 [J-GAAP]
July 30, 2021
Name of listed company:
Securities code:
Representative:
Contact:

ARTNATURE INC.
Listed on: Tokyo Stock Exchange
7823
URL: https://www.artnature.co.jp/english/index.html
Yoshikata Igarashi, Chairman and President
Hiroaki Inoue, General Manager, Finance & Accounting Division
TEL: +81-3-3379-3334
Senior Corporate Officer
Scheduled date of filing the quarterly financial report:
August 10, 2021―
Scheduled date of the start of dividends distribution:
Supplementary quarterly materials prepared:
None
Explanation meeting for quarterly financial results:
None(Figures shown are rounded down to the nearest million yen.)

1. Consolidated results for the first quarter ended June 30, 2021 (April 1, 2021 – June 30, 2021)(Percentage figures show changes from the previous year.)(1) Consolidated operating results
Net sales

Operating income (loss)

Millions of yen%
Millions of yen%
Millions of yen
Three months ended―
June 30, 2021
9,513
75.7
904
842
―
June 30, 2020
5,414
(37.0)(1,971)(1,963)
Note: Comprehensive income:Three months ended June 30, 2021: ¥584 million (―%)
Three months ended June 30, 2020: ¥-1,398 million (―%)

Net income (loss)
per share
Three months ended
June 30, 2021
June 30, 2020

Net income (loss)
attributable to owners of
the parent company

Ordinary income (loss)%――

Millions of yen

%
―
―

488
(1,439)Diluted net income
per share
Yen

Yen

15.22
(44.46)

15.07―(2) Consolidated financial position
Total assets

Shareholders’ equity ratio

Net assets

Millions of yen

Millions of yen

As of June 30, 2021
44,515
As of March 31, 2021
44,919(Reference) Equity capital: As of June 30, 2021: ¥24,131 million

24,31825,255

Net assets per share

%

54.2
55.8
As of March 31, 2021: ¥25,066 million

751.82781.002. Dividends
First quarter-end

Second quarter-end

Dividends per share
Third quarter-end

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2021―
14.00
Year ending March 31, 2022―
Year ending March 31, 2022
14.00
(forecast)
Note: Revisions to dividend forecasts published most recently: None

―

14.00

28.00

―

14.00

28.00

Year-end

Annual

3. Consolidated financial forecast for the fiscal year ending March 31, 2022 (April 1, 2021 – March 31, 2022)(Percentage figures show changes from the previous year.)Net sales
Millions of yen

Operating income%

Millions of yen

Net income
attributable to ownersof the parent company

Ordinary income

Net income per
share

%

Millions of yen%

Millions of yen%

Yen

Full year
40,363
12.5
2,023
4.7
Note: Revisions to most recently announced results forecasts: None

2,088

4.1

1,045

24.3

32.56

Notes:(1) Significant changes to subsidiaries during the period (Transfers of specific subsidiaries with changes in the scope of consolidation): None
(2) Application of specific accounting methods for preparing the quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting estimates, and restatement of revisions
1) Changes in accounting policies due to revision of accounting standards, etc.: Yes
2) Changes in accounting policies other than 1):
None3) Changes in accounting estimates:
None4) Restatement of revisions:
None
Note: More information is provided on page 7 of the supplementary materials, “2. Quarterly consolidated financial statements and related
notes, (3) Notes on quarterly consolidated financial statements (Changes in accounting policies).”(4) Number of outstanding shares (common stock):1) Number of shares issued and outstanding (including treasury shares)
As of June 30, 2021
34,393,200 shares
As of March 31, 2021
2) Number of treasury shares
As of June 30, 2021
2,295,239 shares
As of March 31, 2021
3) Average number of shares issued and outstanding in each period
Three months ended June 30, 2021
32,097,256 shares
Three months ended June 30, 2020

34,393,200 shares
2,297,539 shares
32,367,442 shares*This quarterly kessan tanshin document is outside the scope of audit procedures conducted by certified public
accountants or the independent auditor.

*

Explanation of the appropriate use of financial results forecasts; other important items(Cautionary statement regarding forward-looking statements, etc.)
Forward-looking statements in this document, including forecasts, are based on information available at the time of disclosure and on
certain assumptions deemed reasonable by the Company. Actual results may differ materially from forward-looking statements due to anumber of factors.
For more information about these assumptions and other conditions that form the basis of these forecasts, please see page 2 of the
supplementary materials, “1. Analysis of operating results and financial position, (3) Quarterly information on consolidated financial
forecasts.”

ARTNATURE INC. (7823) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022
Contents
1. Analysis of operating results and financial position .............................................................................................................. 2(1) Analysis of operating results ................................................................................................................................................. 2(2) Analysis of financial position ............................................................................................................................................... 2(3) Qualitative information on consolidated financial forecasts ................................................................................................. 3
2. Quarterly consolidated financial statements and related notes ............................................................................................ 4(1) Quarterly consolidated balance sheets .................................................................................................................................. 4(2) Quarterly consolidated statements of income and comprehensive income .......................................................................... 6(Quarterly consolidated statements of income) .................................................................................................................... 6(Quarterly consolidated statements of comprehensive income) ........................................................................................... 7(3) Notes on quarterly consolidated financial statements .......................................................................................................... 8(Notes on the going concern assumption) ............................................................................................................................ 8(Notes on significant fluctuation in amounts of shareholders’ equity) ................................................................................. 8(Changes in accounting policies).......................................................................................................................................... 8–1–

ARTNATURE INC. (7823) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022

1. Analysis of operating results and financial position(1) Analysis of operating results
Operating results for the first three months of fiscal 2022
In the first three months of fiscal 2022 (April-June 2021), economic activities were restricted in Japan due to the impact of the
prolonged COVID-19 pandemic, which had continued since the previous fiscal year, and the declaration of a state of emergency.
As consumer spending is sluggish, the outlook for the Japanese economy remains uncertain because there are still no prospects
for the end of the COVID-19 pandemic, despite vaccination and other measures taken to prevent the spread of infections.
Against this backdrop, ARTNATURE INC. and its consolidated subsidiaries (the ARTNATURE Group) saw the ARTNATURE
Challenge Plan, the three-year medium-term management plan, mark its second year. Under the plan, we have been
implementing six priority challenge initiatives, as we did in the first year: (1) grow the Group’s earnings, (2) develop new
business fields, (3) reinforce recruitment, (4) cultivate human resources, (5) encourage dialogue with capital markets, and (6)drive business innovation, with the aim of strengthening the ARNATURE Group’s position in existing businesses and further
expanding new businesses to build the foundations for a new ARTNATURE capable of opening up the next phase in theGroup’s history. At the same time, we have continued to take comprehensive measures to prevent COVID-19 infections in ourbusiness activities since the previous fiscal year.
As a result, consolidated net sales in the first three months under review increased 75.7% year on year to ¥9,513 million. In
terms of profits, operating income stood at ¥904 million (compared with an operating loss of ¥1,971 million in the first quarterof the previous fiscal year), and ordinary income came to ¥842 million (compared with an ordinary loss of ¥1,963 million in
the first quarter of the previous fiscal year) due to an increase in net sales. Net income attributable to owners of the parent
company was ¥488 million (compared with a net loss attributable to owners of the parent company of ¥1,439 million in thefirst quarter of the previous fiscal year).
Business results by segment are as follows.
< Men’s business >Sales in the men’s business increased 62.7% year on year, to ¥5,313 million, as a result of eliminating the significant fall insales in the first quarter of the previous fiscal year that had been caused by the temporary closure of production sites in thePhilippines associated with the COVID-19 pandemic and other factors, in addition to the sale of new products and thepromotion of measures to retain customers, etc.
< Ladies’ business >Sales in the ladies’ business rose 124.0% year on year, to ¥2,981 million, as a result of eliminating the significant fall in sales
in the first quarter of the previous fiscal year that had been caused by the temporary closure of production sites in the Philippines
associated with the COVID-19 pandemic and other factors, similarly to sales in men’s business, in addition to the sale of new
products and the holding of exhibition and trial fitting events, among other measures.
< Ladies’ ready-made wigs business >Sales in the ladies’ ready-made wigs business increased 63.3% year on year to ¥851 million, despite the impact of the temporary
closure of the retail facilities in which the Company’s stores are located due to the spread of COVID-19, because the impact
was relatively limited compared with the first quarter of the previous fiscal year.
(2) Analysis of financial position
Assets, liabilities and net assets(Assets)
As of the end of the first quarter, total assets were ¥44,515 million, a decrease of ¥404 million compared with the end of theprevious fiscal year. Current assets decreased ¥998 million, mainly due to a fall in cash and deposits, while non-current assets
increased ¥594 million, primarily reflecting an increase in investments and other assets.
(Liabilities)
As of the end of the first quarter, liabilities totaled ¥20,196 million, an increase of ¥532 million compared with the end of theprevious fiscal year. Although accounts payable - other, income taxes payable and advances received decreased, current
liabilities increased ¥425 million mainly due to increases in provision for bonuses and other current liabilities associated withthe application of the accounting standard for revenue recognition.
(Net Assets)–2–

ARTNATURE INC. (7823) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022
This largely reflected a decrease in retained earnings associated with the application of accounting standard for revenue
recognition.
(3) Qualitative information on consolidated financial forecasts
Consolidated financial forecasts for the fiscal year ending March 31, 2022 remain the same as those announced on May 15,
2021.

–3–

ARTNATURE INC. (7823) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022

2. Quarterly consolidated financial statements and related notes(1) Quarterly consolidated balance sheets(Millions of yen)
As of March 31, 2021
AssetsCurrent assets
Cash and deposits
Accounts receivable – trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
OthersAllowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Others, net
Total property, plant and equipment
Intangible assets
Goodwill
OthersTotal intangible assets
Investments and other assets
OthersAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets–4–

As of June 30, 2021

19,073
2,914
22
2,394
172
1,084
930
(5)
26,586

17,846
2,663
24
2,644
187
1,046
1,179
(4)
25,588

4,755
3,919
8,674

4,799
3,920
8,719

602
519
1,121

559
490
1,049

8,772
(235)
8,536
18,332
44,919

9,475
(316)
9,158
18,92744,515

ARTNATURE INC. (7823) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022

(Millions of yen)
As of March 31, 2021
Liabilities
Current liabilities
Accounts payable – trade
Accounts payable – other
Income taxes payable
Advances received
Provision for bonuses
Provision for directors’ bonuses
Provision for product warranties
Provision for point card certificates
OthersTotal current liabilities
Non-current liabilities
Net defined benefit liability
Asset retirement obligations
OthersTotal non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets–5–

As of June 30, 2021

327
1,947
1,053
6,464
996
130
31
107
1,088
12,147

143
1,063
533
6,132
1,509
37
35
―
3,117
12,573

4,078
1,511
1,927
7,517
19,664

4,149
1,512
1,961
7,623
20,196

3,667
3,558
19,075(1,289)25,011

3,667
3,558
18,041(1,288)23,979

96
(5)
(35)
55
180
8
25,25544,919

109
71
(28)
152
180
7
24,31844,515

ARTNATURE INC. (7823) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022
(2) Quarterly consolidated statements of income and comprehensive income(Quarterly consolidated statements of income)(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Gain on investments in investment partnerships
OthersTotal non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Provision of allowance for doubtful accounts
Guarantee commission
OthersTotal non-operating expenses
Ordinary income (loss)
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Impairment loss
Total extraordinary losses
Income (loss) before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Net income (loss)
Loss attributable to non-controlling interests
Net income (loss) attributable to owners of the parent company–6–

Three months ended
June 30, 2020
5,414
2,601
2,813
4,784
(1,971)Three months ended
June 30, 2021
9,513
3,085
6,428
5,523
904

14
―
9
23

11
10
14
36

0
0
2
8
2
15
(1,963)

―
9
81
6
1
99
842

0
0

―
―

―
―
(1,962)
37
(560)
(522)
(1,440)(0)(1,439)

0
0
841
459
(104)
354
487
(1)
488

ARTNATURE INC. (7823) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022
(Quarterly consolidated statements of comprehensive income)(Millions of yen)Three months ended
June 30, 2020
(1,440)Net income (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income (loss)(Comprehensive income (loss) attributable to)
Owners of the parent company
Non-controlling interests–7–

Three months ended
June 30, 2021
487

60
(29)
10
41
(1,398)

12
77
7
97
584

(1,397)
(0)

585
(1)

ARTNATURE INC. (7823) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022
(3) Notes on quarterly consolidated financial statements(Notes on the going concern assumption)
There is no related information.
(Notes on significant fluctuation in amounts of shareholders’ equity)
There is no related information.
(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition, etc.)
The Group has decided to apply the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2018;
hereinafter the “Revenue Recognition Accounting Standard”), etc. from the beginning of the first quarter under review andrecognize revenue from goods or services which the Group promised to provide at an amount expected to be received in
exchange for the goods or services at the time when control over the promised goods or services has been transferred to acustomer. Major changes as a result of the application are as follows.
(1) Sales of hair-addition products
With regard to sales of hair-addition products, in the past we recognized revenue for unused hair-addition products at the timeof sale and revised the amount if products were returned subsequently. However, for the products that are expected to be
returned, we have changed it to a method of not recognizing revenue at the time of sale but recognizing refund liabilities at theamount of consideration received for the products, in accordance with the provisions for variable consideration.
(2) Periodic check service of custom-made wigs for ladies and ready-made wigs for ladies
For the periodic check service of custom-made wigs for ladies and ready-made wigs for ladies, in the past we recognizedrevenue including consideration for the service at the time of sale of products, but we have changed it to a method of identifying
the service separately from the sale of products and recording net sales when we provide customers with the check service.
(3) Points
For points given to customers at the time of selling products and providing services, in the past we recorded unused points
which were expected to be used in the future as provision for point card certificates and recognized expenses, but we havechanged it to a method of identifying the given points as performance obligations separately from the sale of products and theprovision of services and recognizing them as net sales when customers used the points (or when the points disappeared).
The application of the Revenue Recognition Accounting Standard follows the provisional treatment provided for in the proviso
of Paragraph 84 of the Revenue Recognition Accounting Standard. The cumulative effects in case of retroactively applying the
new accounting policy to before the beginning of the first quarter under review are adjusted in retained earnings at the beginningof the first quarter under review, and the new accounting policy is applied from this initial balance. However, applying themethod stipulated in Paragraph 86 of the Revenue Recognition Accounting Standard, the new accounting policy is not applied
to contracts in which almost all revenues were recognized according to the previous treatment before the beginning of the firstquarter under review. In addition, applying the method stipulated in the in-addition clause (1) of Paragraph 86 of the Revenue
Recognition Accounting Standard, changes in contracts made prior to the beginning of the first quarter under review areaccounted for based on the contractual terms after reflecting all the changes in the contracts, and the cumulative effects of suchchanges are adjusted in retained earnings at the beginning of the first quarter under review.
As a result, net sales in the first quarter under review decreased ¥36 million, and operating income, ordinary income and net
income before taxes decreased ¥36 million, respectively. In addition, the beginning balance of retained earnings decreased¥1,072 million.
As a result of applying the Revenue Recognition Accounting Standard, we have decided to present the provision for point cardcertificates, which was presented in current liabilities in consolidated balance sheet for the previous fiscal year, by including it
in "Other" of current liabilities from the first quarter of the current fiscal year. In accordance with the provisional treatment
stipulated in Paragraph 89-2 of the Revenue Recognition Accounting Standard, no reclassification has been made to theconsolidated financial statements for the previous fiscal year based on the new presentation method.
(Application of Accounting Standard for Fair Value Measurement, etc.)
The Group has decided to apply the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019;
hereinafter the “Fair Value Measurement Accounting Standard”), etc. from the beginning of the first quarter under review andapply the new accounting policy stipulated in the Fair Value Measurement Accounting Standard, etc. according to the–8–ARTNATURE INC. (7823) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022
provisional treatment provided for in Paragraph 19 of the Fair Value Measurement Accounting Standard and Paragraph 44-2of the Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019) into the future. The applicationof the Fair Value Measurement Accounting Standard and others mentioned above have no impact on quarterly consolidated
financial statements.

–9–