Consolidated Financial Results for the Fiscal Year Ended March 31, 2024 [J-GAAP]May 15, 2024
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 Senior
TEL: +81-3-3379-3334
Corporate Officer
Scheduled date of the ordinary general meeting of shareholders:June 21, 2024
Scheduled date of the start of dividends distribution:
June 24, 2024
Scheduled date of the filing of the financial report:
June 24, 2024
Supplementary documents for this summary of financial statements:
Yes
Financial results explanatory meeting:Yes (for institutional investors and analysts)(Figures shown are rounded down to the nearest million yen.)

1. Consolidated results for the fiscal year ended March 31, 2024 (April 1, 2023 – March 31, 2024)(Percentage figures show change from the previous year.)(1) Consolidated operating results
Net sales

Operating income

Millions of yen%

Millions of yen%

Millions of yen%

42,85043,209

(0.8)
6.9

2,654
3,573

(25.7)
18.3

2,724
3,534

(22.9)
16.3

Year ended March 31, 2024
Year ended March 31, 2023

Note: Comprehensive income: Year ended March 31, 2024: ¥1,785 million (-8.4%)

1,462
1,874

(22.0)
55.7

Year ended March 31, 2023: ¥1,949 million (54.8%)

Yen

Diluted net income
per share
Yen

Return on shareholders’equity%Ordinary income tototal assets%

Operating income to
net sales
%

44.99
58.00

44.40
57.29

5.6
7.5

5.6
7.5

6.2
8.3

Net income per share
Year ended March 31, 2024
Year ended March 31, 2023

Net income attributable toowners of the parent
company
Millions of yen%

Ordinary income(Reference) Equity in earnings of affiliates: Year ended March 31, 2024: ¥‒ million

Year ended March 31, 2023: ¥‒ million(2) Consolidated financial position
Total assets
Millions of yen

Net assets
Millions of yen

Shareholders’ equity ratio%

49,851
47,956

26,87025,927

53.3
53.5

As of March 31, 2024
As of March 31, 2023
(Reference) Equity capital: As of March 31, 2024: ¥26,582 million

Net assets per shareYen

817.17790.26

As of March 31, 2023: ¥25,662 million(3) Consolidated cash flows
Cash flows from operating
activities
Millions of yen

Cash flows from investing
activities
Millions of yen

Cash flows from financing
activities
Millions of yen

Cash and cash equivalents
at end of year
Millions of yen

2,137
2,927

(2,165)(1,417)

(919)
(924)

19,20820,082

Year ended March 31, 2024
Year ended March 31, 2023

2. Dividends
Dividends per share
SecondThird
quarterquarterYear-end
end
end

First
quarterend
Year ended March 31, 2023
Year ended March 31, 2024
Year ending March 31, 2025
(forecast)

AnnualDividend
payout ratio(consolidated)

Total dividends(annual)Dividends on
net assets(consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

‒
‒

14.00
14.00

‒
‒

14.00
14.00

28.00
28.00

908
910

48.3
62.2

3.6
3.5

‒

14.00

‒

14.00

28.00

60.3

3. Consolidated financial forecast for the fiscal year ending March 31, 2025 (April 1, 2024 – March 31, 2025)
Net sales

Full year

Operating income

Millions of yen%

Millions of yen%

45,001

5.0

2,911

9.7

(Percentage figures show changes from the previous year.)
Net income attributable
Net income per
Ordinary income
to owners of the parent
share
company
Millions of yen% Millions of yen
%
Yen

2,949

8.3

1,509

3.2

46.41

Notes:(1) Significant changes to subsidiaries during the term (Transfers of specific subsidiaries with changes in the scope of consolidation): None
(2) Changes in accounting policies, accounting estimates and restatement of revisions
1) Changes in accounting policies due to revision of accounting standards, etc.: None
2) Changes in accounting policies other than 1):
None3) Changes in accounting estimates:
Yes
4) Restatement of revisions:
None
Note: More information is provided on page 14 of the supplementary materials, “4. Consolidated financial statements and related notes, (5)Notes on consolidated financial statements (Changes in accounting estimates).”(3) Number of outstanding shares (common stock):1) Number of shares issued andAs of March 31, 2024
outstanding (including treasury
shares)
As of March 31, 2024
2) Number of treasury shares
3) Average number of shares issued
Year ended March 31, 2024
and outstanding in each period

34,393,200

shares

As of March 31, 2023

34,393,200

shares1,863,139

shares

As of March 31, 2023

1,919,239

shares32,512,200

sharesYear ended March 31, 2023

32,321,935

shares*This kessan tanshin document is outside the scope of the audit procedures conducted by certified public accountantsor 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 3 of the supplementary materials, “1. Analysis of operating results, etc., (4) Business forecasts.”

Contents
1. Analysis of operating results, etc. ............................................................................................................................................ 2(1) Analysis of operating results ............................................................................................................................................... 2(2) Analysis of financial position.............................................................................................................................................. 2(3) Analysis of cash flows ........................................................................................................................................................ 2(4) Business forecasts ............................................................................................................................................................... 3(5) Basic policy for the distribution of profits and dividends for fiscal 2024 and fiscal 2025 .................................................. 3
2. Management policies ................................................................................................................................................................ 4(1) Basic management policy ................................................................................................................................................... 4(2) Management indicators and targets ..................................................................................................................................... 4(3) Medium- and long-term management strategy ................................................................................................................... 4(4) Issues to be resolved ........................................................................................................................................................... 4
3. Basic position on the selection of accounting standards ........................................................................................................ 5
4. Consolidated financial statements and related notes............................................................................................................. 6(1) Consolidated balance sheet ................................................................................................................................................. 6(2) Consolidated statements of income and comprehensive income ........................................................................................ 8(Consolidated statements of income) .................................................................................................................................. 8(Consolidated statements of comprehensive income) ......................................................................................................... 9(3) Consolidated statements of changes in net assets ............................................................................................................. 10(4) Consolidated statements of cash flows.............................................................................................................................. 12(5) Notes on consolidated financial statements ...................................................................................................................... 14(Notes on the going concern assumption) ......................................................................................................................... 14(Changes in accounting estimates) .................................................................................................................................... 14(Segment information, etc.)............................................................................................................................................... 14(Per share information) ..................................................................................................................................................... 16(Significant subsequent events)......................................................................................................................................... 16

1

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024

1. Analysis of operating results, etc.
(1) Analysis of operating results
In fiscal 2024, which ended March 31, 2024, the Japanese economy saw a recovery in consumer spending and inbound tourist
demand, given the normalization of economic activities attributable partly to the reclassification of COVID-19 in May 2023
under the Infectious Diseases Control Law. However, it continued to face an uncertain situation, partly reflecting a rise in thecost of living due chiefly to the weakening of the yen and surges in raw material and energy prices.
Against this backdrop, the Group formulated the ARTNATURE Advance Plan, a new medium-term management plan, andbegan to implement it in the current fiscal year. The Group has been leveraging its strengths and tackling a range of issues toenhance its business performances and increase its market share in the haircare industry, while simultaneously promoting its
business activities by expanding businesses acquired in new areas with a view to taking a significant leap for the creation of a
new ARTNATURE capable of opening up the next phase.
As a result, consolidated net sales in fiscal 2024 declined 0.8% year on year to ¥42,850 million. In terms of profits, operating
income and ordinary income stood at ¥2,654 million (down 25.7% year on year) and ¥2,724 million (down 22.9% year onyear), respectively, due to a decrease in net sales and increases in the cost of sales, sales expenses and general andadministrative expenses. Similarly, net income attributable to owners of the parent company came to ¥1,462 million (down
22.0% year on year).
Men’s business
Sales in the men's business fell to ¥22,814 million (down 1.8% year on year) as a result of a year-on-year decline in sales
to new customers although sales to repeat customers remained almost flat year on year due to the implementation ofcustomer retention programs and other measures.
Ladies’ business
Sales in the ladies' business declined 1.8% year on year, to ¥12,788 million due to a fall in sales to new customers, despite
there was a year-on-year increase in sales to repeat customers, which reflected a rise in the number of customers visiting
the Company's stores.
Ladies’ ready-made wigs business
Sales in the ladies’ ready-made wigs business rose 9.4% year on year, to ¥5,658 million, chiefly reflecting an increase in
the number of products sold due to a rise in the number of customers visiting retail facilities in which the Company’s storesare located.
(2) Analysis of financial position(Assets)
As of the fiscal year-end, total assets were ¥49,851 million, an increase of ¥1,895 million compared with the end of theprevious fiscal year. Current assets decreased ¥472 million, mainly due to a fall in cash and deposits, while non-current
assets increased ¥2,367 million due in part to a change to the estimated amount of asset retirement obligations.
(Liabilities)
As of the fiscal year-end, liabilities totaled ¥22,981 million, an increase of ¥952 million compared with the end of theprevious fiscal year. Current liabilities decreased ¥789 million, partly reflecting decreases in income taxes payable,
advances received, and provision for bonuses, while non-current liabilities increased ¥1,741 million due in part to a change
to the estimated amount of asset retirement obligations.
(Net assets)
As of the fiscal year-end, net assets were ¥26,870 million, an increase of ¥942 million compared with the end of the previous
fiscal year. This largely reflected an increase in retained earnings.
(3) Analysis of cash flows
As of the fiscal year-end, cash and cash equivalents (cash) totaled ¥19,208 million, a decrease of ¥873 million comparedwith the end of the previous fiscal year. The Company’s cash flow position and factors behind the changes in cash flows
were as follows:(Cash flows from operating activities)
Operating activities provided net cash of ¥2,137 million, compared with ¥2,927 million in the previous fiscal year. This
mainly reflected income before income taxes of ¥1,786 million, depreciation of ¥1,096 million, impairment loss of ¥856
million, increase in net defined benefit liability of ¥276 million, versus income taxes paid of ¥1,614 million, decrease in

2

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024
provision for bonuses of ¥192 million, increase in inventories of ¥205 million, and decrease in advances received of ¥148
million.
(Cash flows from investing activities)
Investing activities used net cash of ¥2,165 million, compared with ¥1,417 million in the previous fiscal year. This mainlyreflected purchase of property, plant and equipment of ¥1,134 million, purchase of intangible assets of ¥855 million, andpayments of leasehold and guarantee deposits of ¥74 million.
(Cash flows from financing activities)
Financing activities used net cash of ¥919 million, compared with ¥924 million in the previous fiscal year. This mainlyreflected cash dividends paid of ¥909 million.
The Group’s cash flow-related indicators are as follows:
2020

2021

2022

2023

2024

Equity ratio (%)

58.3

55.8

52.4

53.5

53.3

Market value-based equity ratio (%)

48.2

50.4

49.7

53.1

50.9

‒

‒

‒

‒

‒

1,980.5

492.6

‒

‒

‒

Cash flows to interest-bearing debt (%)
Interest coverage ratio (times)

Notes: The above indicators are calculated as follows:
Equity ratio:
Equity capital / total assets
Market value-based equity ratio: Market capitalization / total assets
Cash flow to interest-bearing debt: Interest-bearing debt / cash flow from operating activities
Interest coverage ratio:
Cash flows from operating activities / interest payments* All indicators are calculated using consolidated financial data.
* Market capitalization is calculated by multiplying the number of shares outstanding at the fiscal year end (excluding treasury
shares) by the closing share price at the fiscal year end.
* Cash flow is “Cash flows from operating activities” shown on the consolidated statements of cash flows.
* Interest-bearing debt is all liabilities on which interest is paid shown under liabilities on the consolidated balance sheet.
Interest payments are “Interest paid” shown on the consolidated statement of cash flows.

(4) Business forecasts
In fiscal 2025, which ends March 31, 2024, the Group’s operating environment is likely to remain challenging, due mainly
to intensifying competition from companies in the same sector and from new market entrants from peripheral and othersectors.
Against this backdrop, the Group has formulated a new medium-term management plan, the ARTNATURE Advance Plan,
and began to implement it in fiscal 2024. In the course of the three years of the plan, we will solidify our top-rated brandstatus in the hair industry, enhance the Group’s business field to include new businesses associated with beauty and healthcare, and move forward to the next stage as we seek to create a new ARTNATURE capable of opening up the next phase in
the Group’s history.
For fiscal 2025, we forecast consolidated net sales of ¥45,001 million, up 5.0% year on year, operating income of ¥2,911
million, up 9.7%, ordinary income of ¥2,949 million, up 8.3%, and net income attributable to owners of the parent companyof ¥1,509 million, up 3.2%.
(5) Basic policy for the distribution of profits and dividends for fiscal 2024 and fiscal 2025
ARTNATURE Group believes that returning profits to shareholders is one of the most important management issues. Undera basic policy of paying stable dividends to shareholders while making sure to retain sufficient internal reserves to reinforce
the Group’s management base and financial position and to invest in the future expansion of business, the Company has
adopted the following dividend policy.
[Dividend policy] Based on a consolidated payout ratio of 40% or higher, we will strive to increase dividends in line withconsolidated performance (increase in increments of 1 yen), with the current annual dividend of 28 yen as the minimum
limit. However, until we achieve an ROE of over 10%, the consolidated payout ratio will be set to 50% or higher. If
consolidated net income fluctuates significantly, we may adjust the dividends to account for these fluctuations.
In line with the basic policy and dividend policy, the Company will pay a full-year dividend of ¥28 per share for the fiscal
year ended March 31, 2024, comprising an interim dividend of ¥14 per share and a year-end dividend of ¥14 per share.
For the fiscal year ending March 31, 2025, the Company plans to pay a full-year dividend of ¥28 per share, comprised of
an interim dividend of ¥14 per share and a year-end dividend of ¥14 per share.

3

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024

2. Management policies(1) Basic management policy
As a comprehensive hair consultancy business, ARTNATURE strives to aid all of our customers and address their concerns
about their hair by providing them with the highest-quality products and services that are tailored to their needs. Our
management philosophy is to foster a culture of hair that satisfies customers.
To ensure the realization of this philosophy, the Group is reinforcing its product development capabilities, upgrading its
manufacturing framework, and improving its sales service system in areas such as counseling, customer support and stylingskills, while also striving to operate its business in a way that earns the trust of shareholders, investors and all otherstakeholders by strengthening its compliance system and actively disclosing information about the Group.
(2) Management indicators and targets
The Group is working to expand its comprehensive hair consultancy business and boost profitability and capital efficiency
by increasing sales and promoting efficient management, and focuses on three key performance indicators: sales, ordinary
margin (ratio of ordinary income to net sales) and return on equity (ROE).
Our goal is to increase sales steadily by steadily upgrading our sales structure. We also aim to steadily increase the ordinary
margin by overhauling our earnings structure to create an efficient and effective framework for earnings. Regarding ROE,
we will make efficient use of the capital entrusted to us by shareholders with the goal of improving corporate value.
(3) Medium- and long-term management strategy
Based on the above management indicators and targets, the Group has formulated the ARTNATURE Advance Plan, its
medium-term management plan that began to be implemented in fiscal 2024. In the course of the three years of the plan,we will solidify our top-rated brand status in the hair industry, enhance the Group's business field to include new businesses
associated with beauty and health care, and move ahead to the next stage as we seek to create a new ARTNATURE capableof opening up the next phase in the Group’s history, thereby achieving consolidated net sales of ¥45,001 million, the ratioof ordinary income to net sales of 6.6% and ROE of 5.7% for the fiscal year ending March 31, 2025.
(4) Issues to be resolved
In the domestic hair products and services market, the ARTNATURE Group’s main business field, we forecast risingdemand due to trends such as the aging of the population, delayed retirement, growth in the number of women in theworkplace and rising interest in anti-aging treatments. However, we anticipate intensifying competition from companies inthe same sector and from companies in peripheral sectors. In this environment, we plan to work on the following key issues
to generate stable growth and boost corporate value.
First, we will increase the number of customers in domestic and overseas markets. We will generate new demand by
developing and regularly launching the highest-quality products and services in line with customer needs, and by devising
advertising campaigns that resonate more closely with customers. In both the men’s category and the ladies’ category, ourgoal is to generate stable growth by focusing on improving customer satisfaction to increase the number of true
ARTNATURE fans, while also implementing a range of initiatives to strengthen customer retention. In the ladies’ readymade wigs business, we seek to further increase earnings by strengthening collaboration with the custom-made wig business.
In hair care product sales, we also plan to increase earnings by broadening the lineup with new products and widening the
choice that we provide, and by expanding sales channels, such as increasing the number of e-commerce sites that sell our
products. In overseas markets, we will work to expand our business by increasing brand awareness and implementing sales
initiatives tailored to local markets in Singapore, Thailand and Malaysia to capture potential demand.
Second, we will target business opportunities in new fields outside the Group’s existing businesses. We will continue totake the necessary measures to make sure that the affordable wig business, pharmaceutical sales business and medical
support business are on a steady path of growth, while also developing and enhancing businesses in new fields related tobeauty and health care mainly by seeking M&A opportunities in Japan and overseas and launching new businesses, with aview to driving the Group’s continued growth.
Third, from a human resources perspective, we will maintain and increase the number of highly capable employees. We
have developed a range of initiatives to increase the motivation of all our employees and ensure they reach their maximum
potential. We are implementing diversity management, including acquiring Kurumin Mark certification as a company
supporting childcare under the Act on Advancement of Measures to Support Raising Next-Generation Children. Also, amid
the current focus on workstyle reforms, we emphasize work-life balance through initiatives such as eliminating long
overtime hours and providing support that enables employees to balance work with family commitments, while also actively
4

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024
promoting health management. We plan to introduce more initiatives to foster a shared sense of unity with our employees
and create more rewarding workplaces.
Fourth, we are working to enhance our ability to meet the diverse needs of our customers and strengthen the planning andmanagement capabilities of our head office departments. As of March 31, 2024, 1,859 employees, or roughly 80% of theCompany’s permanent employees, were qualified barbers or hairdressers. We aim to improve the basic capabilities of these
employees – their technical skills, customer service skills and product proposal capabilities – to better address customer
needs and cultivate human resources who empathize with and earn the trust of customers. It is our goal to cultivate aworkforce of employees working in non-sales divisions that are capable of formulating a wide range of business plans andmanaging the Group companies. To develop experts in these fields, we will establish training programs and create aframework that supports employees in their own education and improvement efforts.
Fifth, our goal is to maintain and expand the value of the ARTNATURE Group over the medium- and long-term. The Grouphas been pursuing initiatives for sustainability. From a sales system perspective, we will improve labor productivity suchas sales per employee through a range of means, such as improving operating efficiency through investments in systems.
Similarly, from a production system perspective, we will bolster production stability through the decentralization of
production bases and the stockpiling of raw materials, among other means. From a management perspective, we will
improve the efficiency of administrative operations mainly through the renewal of systems and various internal programs.
To decentralize production bases, we have established a subsidiary in Bangladesh and are constructing a new plant that isscheduled to commence operation in the fiscal year ending March 31, 2026. In addition, we will implement sustainability
items (each item related to climate change, respect for human rights and human capital included in the corporate governancecode, while also developing successors for key posts in headquarter departments.

3. Basic position on the selection of accounting standards
The Group uses Japanese accounting standards, as many of its shareholders, creditors, business partners and otherstakeholders are based in Japan, and there is limited need for the Group to procure funds from overseas.

5

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024

4. Consolidated financial statements and related notes(1) Consolidated balance sheets
As of March 31,
2023
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
Accumulated depreciation
Buildings and structures, net
Machinery equipment and vehicle
Accumulated depreciation
Machinery equipment and vehicle, net
LandConstruction in progress
Others
Accumulated depreciation
Others, net
Total property, plant and equipment
Intangible assets
Goodwill
OthersTotal intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Lease and guarantee deposits
OthersAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

20,180
3,044
25
3,379
203
1,364
1,116
(4)
29,31019,317
3,108
28
3,361
178
1,648
1,203
(9)
28,83813,859(9,183)
4,675
210
(151)
58
3,495
3,535
(2,969)566
8,795

15,401(9,765)
5,635
236
(185)
51
3,501
14
3,698
(3,168)
529
9,732

54
504
558

1,280
1,280

2,023
4,150
2,545
1,119
(547)
9,291
18,64547,956

2,133
4,618
2,578
1,250
(581)
9,999
21,01249,851‒

6(Millions of yen)
As of March 31,2024‒

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024

As of March 31,
2023
Liabilities
Current liabilities
Accounts payable – trade
Accounts payable – other
Income taxes payable
Contract liabilities
Refund liabilities
Advances received
Provision for bonuses
Provision for directors’ bonuses
Provision for product warranties
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

7(Millions of yen)
As of March 31,
2024

318
2,205
995
1,635
474
6,184
1,252
145
43
1,292
14,548

292
2,641
257
1,655
490
6,036
1,060
135
43
1,147
13,758

4,165
1,545
1,769
7,480
22,028

4,194
3,196
1,830
9,222
22,981

3,667
3,613
19,278(1,077)25,481

3,667
3,624
19,831(1,045)26,077

10
46
124
181
251
12
25,92747,956

92
116
296
505
276
11
26,87049,851ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024
(2) Consolidated statements of income and comprehensive income(Consolidated statements of income)Year ended
March 31, 2023
43,20914,05329,15625,582
3,573

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Foreign exchange gains
OthersTotal non-operating income
Non-operating expenses
Provision of allowance for doubtful accounts
Guarantee commission
Donations
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Loss on valuation of investment securities
Loss on liquidation of subsidiaries and associates
Total extraordinary losses
Income before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent company

8(Millions of yen)
Year ended
March 31, 2024
42,85014,13428,715
26,060
2,654

53
62
44
160

39
66
45
151

154
23
10
11
199
3,534

37
21
10
13
82
2,724

0
0

0
0

0
360
–
–
360
3,173
1,525
(228)
1,296
1,877
2
1,874

2
856
8
70
937
1,786
900
(577)
323
1,462
0
1,462

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024
(Consolidated statements of comprehensive income)Year ended
March 31, 2023
1,877

Net income
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(Comprehensive income attributable to)
Owners of the parent company
Non-controlling interests

9(Millions of yen)
Year ended
March 31, 2024
1,462

(52)
29
95
72
1,949

82
69
171
322
1,785

1,949
0

1,787
(1)

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024
(3) Consolidated statements of changes in net assets
Year ended March 31, 2023
(Millions of yen)
Shareholders’ equity
Capital stock
Balance at the beginning of theperiodCapital surplus

Retained earnings

3,557

18,307

3,667

Treasury shares

Total shareholders’equity(1,272)

24,260Change of items during the period
Dividends from surplus

(903)

(903)

Net income attributable toowners of the parent company

1,874

1,874

Disposal of treasury shares

55

194

250

Net changes of items other thanshareholders’ equity
Total change of items during theperiod

–

55

970

194

1,221

Balance at the end of the period

3,667

3,613

19,278(1,077)25,481

Accumulated other comprehensive income

Balance at the beginning of theperiodValuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

62

14

Total
Remeasurements accumulatedof definedotherbenefit plans comprehensive
income29

106

Subscription
rights toshares

Noncontrollinginterests

Total net
assets217

1224,596

Change of items during the period
Dividends from surplus(903)

Net income attributable toowners of the parent company

1,874

Disposal of treasury shares250

Net changes of items other thanshareholders’ equity

(52)

31

95

74

34

0

109

Total change of items during theperiod

(52)

31

95

74

34

0

1,331

Balance at the end of the period

10

46

124

181

251

12

25,927

10

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024
Year ended March 31, 2024
(Millions of yen)
Shareholders’ equity
Capital stock
Balance at the beginning of theperiodCapital surplus

Retained earnings

3,613

19,278

3,667

Treasury shares

Total shareholders’equity(1,077)25,481

Change of items during the period
Dividends from surplus

(909)

(909)

Net income attributable toowners of the parent company

1,462

1,462

Disposal of treasury shares

11

31

42

Net changes of items other thanshareholders’ equity
Total change of items during theperiod

–

11

552

31

595

Balance at the end of the period

3,667

3,624

19,831(1,045)26,077

Accumulated other comprehensive income

Balance at the beginning of theperiodValuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

10

46

Total
Remeasurements accumulatedof definedotherbenefit plans comprehensive
income124

181

Subscription
rights toshares

Noncontrollinginterests

Total net
assets251

1225,927

Change of items during the period
Dividends from surplus(909)

Net income attributable toowners of the parent company

1,462

Disposal of treasury shares

42

Net changes of items other thanshareholders’ equity

82

70

171

324

24

(1)

347

Total change of items during theperiod

82

70

171

324

24

(1)

942

Balance at the end of the period

92

116

296

505

276

11

26,87011

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024
(4) Consolidated statements of cash flows
Year ended
March 31, 2023
Cash flows from operating activities
Income before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’ bonuses
Increase (decrease) in provision for product warranties
Increase (decrease) in net defined benefit liability
Interest income
Loss on retirement of non-current assets
Loss (gain) on sales of non-current assets
Decrease (increase) in notes and accounts receivable – trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable – trade
Loss (gain) on valuation of investment securities
Loss on liquidation of subsidiaries and associates
Increase (decrease) in advances received
OthersSubtotalInterest income received
Income taxes paid
Subsidies received
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Long-term loan advances
Collection of long-term loans receivable
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
OthersNet cash provided by (used in) investing activities

12(Millions of yen)
Year ended
March 31, 2024

3,173
902
360
93
153
199
–
6
132
(53)
0
(0)
28
(493)
(4)
–
–
(317)
154
4,336
54
(1,464)
1
2,927

1,786
1,096
856
36
39
(192)
(10)
(0)
276
(39)
2
(0)
(57)
(205)
(29)
8
70
(148)
223
3,711
40
(1,614)
–
2,137

(126)
125
(1,000)
0
(217)
(100)
0
(125)
131
(107)
(1,417)(136)
132(1,134)
0
(855)
–
0
(74)
41
(138)
(2,165)

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024

Year ended
March 31, 2023
Cash flows from financing activities
Repayments of lease obligations
Cash dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

13

(20)
(903)
(924)
43
629
19,452
20,082(Millions of yen)
Year ended
March 31, 2024
(10)
(909)
(919)
74
(873)
20,082
19,208ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024
(5) Notes on consolidated financial statements(Notes on the going concern assumption)
There is no related information.
(Changes in accounting estimates)
Change in estimates of asset retirement obligations
For restoration costs related to asset retirement obligations under real estate lease contracts for stores, the Group obtained
new information such as recent actual examples for restoration costs. Based on this, we changed estimates for restoration
costs necessary for store closings.
An increase reflecting this change in estimates, which is ¥1,607 million, was added to asset retirement obligations before
the change.
As a result of this change, operating income and ordinary income each decreased ¥171 million and income before income
taxes decreased ¥741 million.
(Segment information, etc.)
Segment information
1. Overview of reportable segments
The Group’s reportable segments are the components of the Group for which separate financial information is available.
These segments are regularly reviewed to enable the Company’s Board of Directors to decide how to allocate resources andassess operating performance.
The Group develops business strategies and conducts business activities related to hair products and services for generalcustomers based on the gender of the customer.
Consequently, the Group has classified its operations into three reportable segments: the men’s business, the ladies’ businessand the ladies’ ready-made wigs business. In the men’s business, the Company supplies male customers with custom-madewigs and other products and services. In the ladies’ business, the Company supplies female customers with custom-madewigs and other products and services. In the ladies’ ready-made wigs business, the Company supplies female customers
with ready-made wigs and other products and services.
2. Method used to calculate sales, income (loss), assets, liabilities and other items by reportable segment
Accounting policies for the reportable segments are the same as those described in “Basic important matters for preparing
the consolidated financial statements.”
Intersegment sales are based on prices determined through negotiations.
3. Information regarding sales, income (loss), assets, liabilities and other items by reportable segment
Year ended March 31, 2023
Reportable segment
Ladies’Ladies’ready-madebusinesswigs
businessMen’sbusiness
Net sales
Sales toexternalcustomers
Intersegment
sales andtransfers
Total
Segment income

Others
Note 1

Total

Total

(Millions of yen)
Carried on
consolidated
Adjustment
financial
Note 2statements
Note 323,237

13,023

5,172

41,433

1,775

43,209–43,209

–

–

–

–

2,419

2,419

(2,419)–23,237
14,88813,023
8,803

5,172
4,150

41,433
27,842

4,195
1,443

45,62829,286(2,419)(130)

43,20929,15614

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024
Year ended March 31, 2024
(Millions of yen)
Reportable segment
Ladies’Ladies’ready-madebusinesswigs
businessMen’sbusiness
Net sales
Sales toexternalcustomers
Intersegment
sales andtransfers
Total
Segment income

Others
Note 1

Total

Total

Carried on
consolidated
Adjustment
financial
Note 2statements
Note 3

22,814

12,7885,658

41,2601,589

42,850–42,850

–

–

–

–

2,681

2,681

(2,681)–

22,814
14,502

12,788
8,378

5,658
4,559

41,26027,441

4,270
1,442

45,531
28,884(2,681)(169)

42,85028,715

Notes: 1. Others is not a reportable segment and mainly includes manufacturing subsidiaries.
2. Details of adjustments are as follows:
Segment income
Year ended March 31, 2023
Intersegment eliminations*(130)(Millions of yen)
Year ended March 31, 2024
(169)

Total
(130)
(169)
* Intersegment eliminations are the elimination of inventory asset adjustments related to intersegment transactions, etc.
3. Segment income has been adjusted to reconcile with the gross profits in the consolidated financial statements.
4. Assets and liabilities have not been shown, as they are not allocated to each segment.
5. Adjustments to reconcile total segment income for reportable segments with operating income in the consolidated financial
statements(Millions of yen)
Year ended March 31, 2023
Year ended March 31, 2024
Total for reportable segments
Others Note 1
Total
Adjustment Note 2
Gross profit in consolidated financial statements
Selling, general and administrative expenses
Operating income in consolidated financial statements

15

27,842
1,443
29,286(130)

27,441
1,442
28,884(169)

29,15628,71525,582

26,060

3,573

2,654

ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2024
(Per share information)(Yen)
Year ended March 31, 2023
Net assets per share
Net income per share
Diluted net income per share

Year ended March 31, 2024
790.26 Net assets per share
58.00 Net income per share
57.29 Diluted net income per share

817.1744.99
44.40

Note: The basis for calculating net income per share and diluted net income per share is as follows:Year ended March 31, 2023

Year ended March 31, 2024

1,874

1,462

–

–

1,874

1,462

32,321

32,512

–

–

402

436

[402]

[436]

Net income per share
Net income attributable to owners of the parent company(millions of yen)Amounts not attributable to owners of common stock(millions of yen)
Net income attributable to owners of the parent company
associated with common stock(millions of yen)
Average number of shares of common stock during fiscal year
(thousands of share)

Diluted net income per share
Adjustment to net income attributable to owners of the parent
company (millions of yen)
Increase in number of shares of common stock (thousands ofshare)[of which, subscription rights to shares]
Summary of residual shares not included in calculations ofdiluted net income per share due to no dilutive effect––Note: Treasury shares, which are excluded from the number of shares issued and outstanding at the end of the fiscal year for the purposesof calculating “Net assets per share,” include shares of the Company held by Custody Bank of Japan, Ltd. (trust account E) (317,200
shares as of March 31, 2023, 662,900 shares as of March 31, 2024). In addition, treasury shares, which are excluded from theaverage number of shares during the fiscal year for the purposes of calculating “Net income per share” and “Diluted net income pershare,” include shares of the Company held by Custody Bank of Japan, Ltd. (trust account E) (443,809 shares during fiscal year
ended March 31, 2023, 425,496 shares during fiscal year ended March 31, 2024).

(Significant subsequent events)
There is no related information.

16