R e s u l t s B r i e f i n g : 1 st H a l f ( M a r c h t oAugust 2022)Results of 2023 Ending Feb.
13th October 2022

AGENDA
1

Results Overview

2

About Business Situation by Channel

3

Brands Overview

4

Net income and the balance sheet

5

Initiatives in each area of TIP25

6

Initiatives related to the SDGs

7

Full-year Forecast

8

Reference Data

1

Results Overview

4

1st Half of Results of 2023 Ending Feb. : Executive summary[Summary of activities in the 1st half]■ Environmental changes
This first half began with “supply chain disruptions due to lockdowns in Shanghai from March.” “Conflicts,” “energy issues,” “increases inprices of daily necessities due to a weaker yen,” and “consumers’ lifestyle habits” had a significant impact on the global economy. Consumers
greatly changed their daily product purchase and their values toward benefits from services.

■ Looking back on measures taken in the 1st half
Under this severe environment, as a countermeasure against the exchange rates which are one of major concerns, TSI conducted its orderand production flow more carefully than usual. Under this flow, we narrowed down a total production volume for initial collection orders andproduced products of higher importance additionally.
We minimized unnecessary production and logistics losses and also drastically reduced a sales budget for markdown sale, to prioritize an
increase in yields.
As a result, although we missed the target value for net sales, we built stronger communications with fans who endorse uniqueness of brands.
On the other hand, the EC channel, in which markdowns and point granting are major purchase decision making elements, grew slower.

■ Issues of EC business and progress in reforms
The EC business saw polarization among brands; some responded to market changes and greatly improved their performance, while others
delayed their response to the changes and decreased their business results. Especially, the poor performance of major key brands had asignificant impact on our comprehensive growth potential of the company-wide EC.
Toward the second half, we are conducting many OMO events as a countermeasure for reinforcing EC for all brands. Now, we are getting
results.
The reduced markdowns slowed the net sales growth down. However, regarding the company’s EC sites, the ratio of their net sales to total
net sales and the number of their new members showed double digit growth steadily.
For customers who endorse our brands, we are now considering providing new service value to members.

5

1st Half of Results of 2023 Ending Feb. : Executive summary■ Posting of 0.59 billion yen in the 1st half as head office relocation expenses; 100% or more
operating profit from the previous term when excluding the expenses
With the aim of integrating physical environments of business companies, we relocated our head office. We consolidated six businesses ofthe main old business companies to one location.
We demand the strategic activities related to EC, logistics and production, digital business, and value chain reform investments to achieve ahigh performance in terms of information sharing, implementation speeds and operational accuracy. We will enhance collaboration among
conventionally decentralized functional departments and aim to eliminate a dual cost structure and reform productivity for further evolution.
Toward the year end, we will launch an integrated press room on the first floor of the head office and form a strategic PR team that willcontribute directly to profit, beyond BtoB.

■ Toward DX reforms (TSI x Sitateru / TSI x Alibaba x JP GAMES)
We established a new division to spur reforms. As a first step to revitalize new business domains, we executed an alliance with Sitateru Inc.
Within the Next Generation business domain, we are enhancing supply chains and developing services for the F2C business.
As a second step, we started a joint project with Alibaba Cloud and JP GAMES.
With the aims of breaking away from a legacy supply chain structure and conducting development in the Next EC domain, we are preparing
toward creating attractive game content and innovative business models.

From June, we reorganized internal business organizations to a new structure for TSI INNOVATIONPROGRAM 2025 to enhance activities and started activities toward further evolution from the second
half. We also consider making more investments in the four-pillar growth business areas (domains).
We will lay a stable foundation for accelerated growth.

6Highlights of Results for 1st Half of Results of 2023 Ending Feb.
➢ Net sales were 111.3% (105.4% based on the old accounting standards) and +7.33 billion yen from the previous term. Real storesshowed a steady recovery. The EC channel increased the ratio of its net sales to total net sales significantly in theprevious term, but showed a poor performance. Therefore, we did not achieve budgetary goals.
➢ Actual operating profit was 0.58 billion yen and +1.57 billion yen from the budget. The result significantly improved
mainly due to passing a weaker yen risk of cost of goods purchased on to prices and improving the ratio of the yields forselling products at regular prices. We reduced SG&A expenses carefully and was able to fall below the budget.

➢ Net income was 119.0% from the previous term and +2.49 billion yen from the budget mainly because of a positive
impact of a significant exchange gain from foreign-currency assets and sale of cross-held stocks. We achieved thehighest net income for first half ever.
New profit standards
Results for the 1st Half

YoY

Net Sales

72.08 Billion Yen

Operating
Profit0.58 Billion Yen*)

Quarterly Net
Income2.24 Billion Yen

Old profit standards

YoY Change

vs. Budget

YoY

111.3%+7.33 Billion Yen-4.38 Billion Yen

105.4%

51.9%-0.54 Billion Yen+1.57Billion Yen

64.8%

119.0%+0.35 Billion Yen+2.49 Billion Yen

119.0%* While operating profit was 1.13 billion yen in the previous first half, operating profit in this term includes ▲0.59 billion yen of the accelerated depreciation cost for thehead office relocation, resulting in the reduced profit

7

Operating Profit Transition for 1st Half Results of 2023 Ending Feb.

As with the first quarter, the well-performing golf and street businesses grew in the second quarter to achieve higher-than-forecasted,significant sales and profit growth.
In the ladies’ domain, the business units which evolved sales approaches in businesses such as OMO enhancement and D2C achieved
higher-than-budgeted yields.
When excluding the head office relocation expenses, the business profitability in the first half was 103.9% from the previous term andshowed the highest as the recent results.
* As the temporary head office relocation expenses, the following amounts will be posted;1Q: 0.3 billion yen, 2Q: 0.29 billion yen, 1st half total: 0.59
billion yen / 2nd half total: 0.35 billion yen / full year: 0.94 billion yen

Main factors for improved operating profit
in the first half

Operating Profit Quartely Transition

Unit: Billion Yen

1.13
11.3
億円

70. 0

✓ The growth of the golf/street businesses which arestrong in summer reduced the sales composition ratiosof the business brands which overemphasize heavy
clothing for fall and winter, resulting in a structure thatis easier to generate profit throughout a year.
✓ We reviewed schemes for additionally producing
products in well-performing businesses and expanded
sales significantly.
✓ We reduced a sales budget for sale periods, andenhanced content to focus on selling products atregular prices. We were particular about controlling
SA&G expenses in lower profitable months anddecreased a deficit in the loss-making season (2Q).

Operating Profit 0.58 Billion Yen
EBITDA 2.81 Billion Yen

When excluding head officerelocation expenses

1.17
10. 0

50. 0

(0.18)-1.8億円(0.16)-1.6億円

5.8
億円
0.58
0.0

22.7

30. 0

19.1

16.0

11.1

(10.0)

10. 0(20.0)(10.0)

-11.3

-12.9
-20.7

(30.0)-10.1(30.0)-40.2

When including 0.29 billion yen of therelocation expenses, 2Q operating profit(non-consolidated) showed the highest
profitability in the recent five years.
No relocation expenses → -0.72 billion yen(40.0)(50.0)-64.4-10.46 billion yen(70.0)

EndingFeb. 201919年2月期20年2月期21年2月期EndingFeb. 2020 Ending
Feb. 2021

1Q Operating Profit (non-consolidated)
1st half Operating Profit

22年2月期23年2月期EndingFeb. 2022 Ending
Feb. 2023

2Q Operating Profit (non-consolidated)(50.0)

2

About Business Situation by Channel

Sale Trends by Channel for 1st Half Results of 2023 Ending Feb.
Sales of real stores was 121.6% and +7.26 billion yen (based on new profit standards) from the previous term and recovered
reliably.
Outside Japan, business results were solid. Currency-exchange gain/loss expanded an impact on the amount of sales.
As a result, the poor performance of the EC business became a bottleneck of the company-wide sales growth in thefirst half.
From the previous term, the respective sales of department stores, non-department stores (FB/streetside stores), overseas and EC were151.5%, 114.7%, 126.4% and 94.9%. EC is a factor for delayed sales recovery.

Domestic9

Department
StoresCommercial
Facilities(*1)
E-Commerce

Old profit standards

Old profit standards

New profit standards

New profit standards

Old profit standards

Cumulative Q2ND
2021 Ending Feb.

Cumulative Q2ND
2022 Ending Feb.

Cumulative Q2ND
2023 Ending Feb.

Growth by Channel

Cumulative Q2ND
2023 Ending Feb.

5.10 Billion Yen

6.31 Billion Yen

9.56 Billion Yen(Composition Rate :9.1%)(Composition Rate :9.8%)(Composition
Rate :13.3%)

22.76 Billion Yen

27.35 Billion Yen

31.37Billion Yen(Composition Rate :40.5%)(Composition Rate :42.3%)(Composition Rate :43.5%)

18.55 Billion Yen

18.78 Billion Yen

17.82 Billion Yen(Domestic E-Commerce ratio:40.0%)(Domestic E-Commerce ratio:35.8%)

Domestic Others(*2)
Overseas(*3)

6.21 Billion Yen

7.43 Billion Yen(Composition Rate :11.1%)(Composition Rate :11.5%)

3.61

Billion Yen(Composition Rate :6.4%)

4.85

Billion Yen(Composition Rate :7.5%)

compared to year
before last (%)

YoY (%)

187.3% 151.5%

6.79 Billion Yen(Composition Rate :10.0%)

31.49 Billion Yen

137.8%

114.7%

96.1%

94.9%

7.18

115.6%

96.6%

Billion Yen(Composition Rate :10.1%)

6.13

169.5%

126.4%

Billion Yen(Composition Rate :9.0%)（Domestic E-Commerce
ratio:30.3%）
Billion Yen(Composition Rate :10.0%)

Billion Yen(Composition Rate :8.5%)(Composition Rate :46.2%)

16.93 Billion Yen（Domestic E-Commerce
ratio:30.7%）

6.88

6.12

*1 Fashion buildings, shopping centers, railroad station buildings, individual stores, outlet shops etc. except for department stores.
*2 Apparel businesses such as wholesale, intercompany sales and non-apparel businesses of the group companies.
*3 Results of Efuego Corp. which operates EC sites centering on Tactics.com in the U.S. is to be consolidated from the second quarter of 2021 and onward. The results are recorded in overseas sales.

10

Sale Trends by Channel for 1st Half Results of 2023 Ending Feb.
A new line of the flagship brand NATURAL BEAUTY BASIC had been performing well.
Outside Japan, HUF continued to perform well in the United States. MARGARET HOWELL
performed solidly in Europe.
Real store business

Overseas businessIn both the United States and Europe, sales increased solidly. HUF USA
FB/streetside, 114.7% vs. previous term : Flagship ladies’ brandwas 120.1%, while HOWELL was 117.9% in Europe. The brands were
The new line (LIMITED EDITION) of NATURAL BEAUTY BASIC had been
performing well at fashion buildings in the center of Tokyo. An average
affected by delayed delivery periods due to the disrupted supply chains but
sales growth rate is 135.0%. The ratio of products sold at regular prices performed well as a first half. For the second half, we expect deteriorated
is high. Therefore, the yield is 10% or more higher than those of normal economy and reduced consumer spending due to conflicts and inflation, in
stores. In the second half, we will increase the stores for introducing the addition to COVID-19. We will take measures such as adjusting SA&G
new line, aiming to acquire new customers and leap the business further. expenses, but will take careful business activities and management.

11

E-commerce in 1st Half Results of 2023 Ending Feb.
In the first half, sales of EC was 19.77 billion yen and 97.0% from the previous term, ending in a sluggish performance.
We increased product prices and conducted a currency exchange countermeasure for controlling markdowns on a company-widebasis. However, for the EC customers who have different consumption behavior from that of real store customers, we lacked pricecountermeasures, exclusive products, and planning and countermeasures for limited services and event strategies other than prices.
In the second half, all companies and all brands are holding events in the EC channel, preparing for measures such as planning
limited products, and conducting countermeasures.
The new company building will increase many spaces dedicated to shooting live streaming on SNSs. We will make efforts to enhance
the company-wide EC sales scheme and functions.
Old profit standards

Old profit
standards

New profit standards

Cumulative
Q2ND 2021
Ending Feb.

Cumulative
Q2ND 2022
Ending Feb.

Cumulative
Q2ND 2023
Ending Feb.

Compared toyear before
last (%)

8.12

8.99

8.73

107.5%

97.1%

8.73

(ratio(%))(43.8%)(47.9%)(49.0%)(+5.2pt)(+1.1pt)(51.6%)

Domestic EC

18.56

18.78

17.82

96.1%

94.9%

16.93

(ratio(%))*１(40.0%)(35.8%)(30.3%)(-9.7pt)(-5.5pt)(30.7%)

Overseas EC

1.51

1.60

1.94

128.8%

121.2%

1.94(ratio(%))*２(41.7%)(33.0%)(31.7%)(-10.0pt)(-1.3pt)(31.7%)

20.07

20.38

19.77

98.5%

97.0%

18.87

(40.1%)(35.6%)(30.5%)(-9.6pt)(-5.1pt)(30.8%)

Unit : Billion Yen
In-House EC
Unit : Billion yen

E-Commerce
TOTAL(ratio(%))*1

Y/Y(%)

Cumulative
Q2ND 2023
Ending Feb.

*1 Domestic E‐Commerce ratio excluding domestic and other sales (wholesale, company sales, etc.)*2 Results of EfuegoCorp. which operates EC sites centering on Tactics.com in the U.S. is to be consolidated from the second
quarter of 2021 and onward. The results are recorded in overseas sales.

New company building after relocation[shooting studio image]12

E-Commerce Current status and future efforts in 1st Half Results of 2023 Ending Feb.
The EC gross profit ratio was 57.1% and improved to 111.5% year-on-year. The profitability of EC improved further.
The in-house channel focused on acquiring new members. The number of new members was 118.5% from the previous year.
Through a large-scale EC campaign to be conducted in 3Q, we will link these acquired members to sales.

Carabiners from HUF continued toperform well. In the first half, the EC
sold more than 20,000 pieces.

In 2Q, the brand launched three types of
online-limited golf bags. Together withother online-limited items, sales
increased by about 10 times from 1Q.

In selling new products every Thursday,the brand conducted live commerce andlive streaming on Instagram, accounting
for an average of about 40% of EC
orders during a period.

We used Rio Inagaki for advertisement.
CVR via META advertisement was about
7 times when compared to CVR
during a period.

3

Brands Overview

14

General situation of each brand in 1st Half Results of 2023 Ending Feb.
Of the top 10 selling brands, total sales of the seven well-performing brands was 123.0% from the previous term, largely
exceeding the company-wide average.
The major brands steadily started business result growth and profit improvement. In the second half, they started new activities
toward future growth domains such as developing services for the new customer segments who purchase products on EC channels.

■ Top 10 brands
1ST Half 2022 Ending Feb.

Sales

※1

Unit:Million Yen

Y/Ycompared to year before last

1ST Half 2023 Ending Feb.

Composition Gross Profit
Ratio (%)
Rate (%)

Sales

Composition
Rate (%)

Gross Profit
Ratio (%)

Sales (%)

Gross Profit
Ratio (pt)Sales (%)

Gross Profit
Ratio (pt)1.

PEARLY GATES

7,136

11.0

63.6

8,369

11.6

63.3

117.3

-0.2

157.5

+16.1

2.

NANO universe

7,598

11.7

46.2

6,165

8.6

52.1

81.1

+5.9

77.0

+16.0

3.

MARGARET HOWELL

5,173

8.0

66.4

5,978

8.3

65.3

115.6

-1.2

170.4

+21.9

4.

NATURAL BEAUTY BASIC

4,978

7.7

58.8

5,377

7.5

63.0

108.0

+4.2

106.1

+19.8

5.

HUF

2,749

4.2

51.2

4,686

6.5

51.1

170.5

-0.1

263.5

+5.5

6.

AVIREX

2,535

3.9

59.4

2,805

3.9

65.3

110.6

+5.9

118.9

+9.8

7.

UNDEFEATED

2,493

3.9

41.7

2,314

3.2

39.8

92.8

-1.9

122.7

-0.7

8.

new balance golf

1,646

2.5

57.8

2,196

3.0

51.7

133.4

-6.0

205.3

+14.6

9.

human woman

1,431

2.2

59.4

2,131

3.0

65.0

148.8

+5.6

158.8

+20.7

10.

STUSSY

2,076

3.2

70.1

2,039

2.8

65.6

98.2

-4.4

99.5

+2.8

TOP10

37,81958.4

57.2

42,064

58.4

59.0

111.2

+1.8

129.9

+14.9

Other Brands

26,62041.1

51.1

29,995

41.6

53.1

112.7

+2.0

138.4

+11.2

Continuing Brands

64,44099.5

54.6

72,060

100.0

56.5

111.8

+1.9

133.3

+13.3

311

0.5

26.7

27

0.0

73.9

8.8

+47.2

1.2

+37.3

64,751

100.0

54.5

72,087

100.0

56.5

111.3

+2.0

128.1

+13.6

Closed Brands
TOTAL

・HUF (total of Japan and overseas)
The Global strategy (HUF PROJECT) started.
Exclusive graphics and high-quality items thatmatched to the Japanese market performed
very well. The brand increased endorsement byprofessional skaters and artists reliably and had
great presence in the domestic market.
・PEARLY GATES / new balance golf
The golf business continued to perform well.
New customers flowed into the brand due to thewell-performing EC.
・NATURAL BEAUTY BASIC
Although the result did not reach the companywide average, sales was 135.0% from theprevious term at the urban-type stores such as
LUMINE which are selling the Limited Line. The
brand acquired sales and new customers
steadily.
・human woman
Sales of existing stores was 148.8% andperformed well. However, there are issues suchas withdrawal of non-profitable stores and low
EC growth. The brand will aim to take new
actions such as reviewing customer profiles.

4

Net income and the balance sheet

16

Net Income Impact Items for 1st Half Results of 2023 Ending Feb.
It includes 0.51 billion yen of a non-budgetary gain from dollar-based assets of overseas subsidiaries and others
After adding 1.31 billion yen of non-operating revenue/loss, ordinary income was 1.89 billion yen.
With regard to extraordinary income/loss*, we conducted the planned sale of investment securities in the first half ahead ofschedule and posted 0.77 billion yen of gain on sale.
After adding income taxes deferred and others, net income was 2.24 billion yen, the highest for first half ever. The net
profit margin was 3.1%.

0.58
Operatingprofit margin

Operatingincome(0.26)
0.87(0.24)(0.12)

1.43

2.24

Non-operating
incomeNon-operating
expenses

Net profit
margin・Loss on valuation of investment securities: 130 million yen(outside the budget)
・Impairment loss: 100 million yen (outside the budget)・ Interest expenses: 30 million yen
・ Real estate expenses : 20 million yen

0.8%

Unit : Billion Yen

・ Gain on sale of investment securities: 770 million yen (outside the budget)
・ Cooperation money for large facilities: 60 million yen (outside the budget)

・Exchange gain: 510 million yen(outside the budget)
・Dividend income: 350 million yen
・ Real estate income: 170 million yen
・ Investment gain on equity method: 150
million yen

Extraordinary
incomeExtraordinary loss

Income taxes
deferred

3.1%

Net income attributable toowners of parent

Ordinary Income

Profit Before Taxes

Profit Attributable to Owners of Parent

1.89

2.51

2.24

Total of non-budgetary gain/loss +1.14 billion yen (non-operating revenue +0.51
billion yen, extraordinary income/loss + 0.63 billion yen)

* One billion yen of extraordinary loss due to temporary closing was posted in
the previous term

17

About Balance Sheet> Inventory assets

We have been able to maintain healthy financial conditions.
We will invest strategies and management resources in businesses with growthpotential.
We will offer attractive products/services and thereby improve our business value.
Unit:Million Yen
1ST Half 2022 Ending
Feb.

Results

Current Assets

Composition
Rate (%)

Cumulative Q1ST
2023 Ending Feb.

Results

Composition
Rate (%)

1ST Half 2023 Ending Feb.

Results

Composition
Rate (%)

Y/Y
ChangeY/Y (%)

Q2/Q1
ChangeQ2/Q1 (%)

73,43851.0%

75,93554.1%

74,661

54.1%

1,223

101.7%-1,27498.3%

40,44018,715

28.1%
13.0%

37,65819,985

26.8%
14.2%

37,06921,780

26.8%
15.8%

-3,371
3,065

91.7%
116.4%

-589
1,795

98.4%
109.0%

70,51149.0%

64,54845.9%

63,43445.9%-7,07790.0%-1,114

98.3%

28,865
4,965

20.1%
3.4%

27,994
4,728

19.9%
3.4%

27,684
4,722

20.0%
3.4%

-1,181
-243

95.9%
95.1%

-310
-6

98.9%
99.9%

143,950

100.0%

140,483

100.0%

138,095

100.0%-5,85495.9%-2,38898.3%

27,195

18.9%

27,79819.8%

26,481

19.2%

-714

97.4%

-1,317

95.3%

202
7,835

0.1%
5.4%

108
5,537

0.1%
3.9%

121
5,262

0.1%
3.8%

-81
-2,573

59.9%
67.2%

13
-275

112.0%
95.0%

17,573

12.2%

13,4599.6%

12,4759.0%-5,098

71.0%

-984

92.7%

12,657

8.8%

8,784

6.3%

7,313

5.3%

-5,34457.8%-1,471

83.3%

Total Liabilities

44,76831.1%

41,25729.4%

38,95728.2%-5,81287.0%-2,301

94.4%

Total Net Assets

99,18168.9%

99,225

70.6%

99,13871.8%-43100.0%-87

99.9%(of Treasury Stock(-))-3,704-2.6%-4,269-3.0%-4,759-3.4%-1,055128.5%-490

111.5%

Total Liabilities and Net Assets

143,950

100.0%

140,483

100.0%

138,095

100.0%-5,85595.9%-2,38898.3%(of Cash and Deposits)(of which, Inventory)
Non-current Assets(of Investment Securities)(of Investment Real estate)
Total Assets
Current Liabilities(of Short-term borrowings)(of Current portion of long-term borrowings)

Non-current Liabilities(of Long-term borrowings)

・Year on YearSales was 111.3% from the previous term,
while inventory was 116.4% and + threebillion yen.
This was due to an impact of earlypurchase of merchandise for products soldat regular prices. From the second halfsales budget, inventory status is proper.

> Treasury stock・Difference from the previous time
As part of capital policy implementation andshareholder returns measures, we acquired
treasury stocks, which were equivalent to0.49 billion yen of an increase.
(an increase by +1.09 billion yen from theend of February 2022)> Equity ratio
We kept 71.5% of a high-level equity ratio.
In addition to investments in SDGs and thedigital domain, we will also utilize money
effectively for investing in our core businessand enhancing supply chains.

5

Initiatives in each area of TIP25

19

TSI Holdings Group’s medium-term management plan “TIP25”
Announced on April 14, 2022 Reprinted Medium-term management plan materials

H e n c e , t o l e a p t o w a r d 2 0 2 5 , w e h a ve u p d a t e d T I P 2 4 ,t o t u r n i t i n t o t h e T S I I n n o va t i o n P r o g r a m 2 0 2 5 ( T I P 2 5 ) .

TIP25 formulation policy

1

2

3

Capture changes in the social

Align the direction of the entire

Achieve sufficiency in digital

environment and market tocompany with the direction ofengagement, ESGs and highexpress and embody ourbusiness domains to develop

profit, all areas that the stock

existence and purpose

business in new growth domains

market holds dear

20

4 Business domains
Announced on April 14, 2022 Reprinted Medium-term management plan materials

Wellness & LifestyleWellness & lifestyle

1

Street & Culture

Street & culture

2

AthleisureCreate fashion entertainment that has a

StreetNurture street culture and create fashion

Outdoorpositive impact on the health andCultureentertainment that brings positivity to

L i fe s t y l ehappiness of consumers and, bySelectsociety and the environment.

extension, society.

Fashion Capital3

Fashion capital

L a d y ’s
Fa s h i o n

Refine the experience values of brands
and create fashion entertainment
centered on highly refined tastes.

Digital Generation

Digital generation
Gen-Z
Fa s h i o n
D2C/F2C
DigitalFa s h i o nCreate fashion entertainment for thedigital native generation via digital x
fashion.

4

21

4 Business domains / Brand list

1

Wellness & LifestyleWellness Div.

Lifestyle Div.

1.
2.
3.
4.
5.
6.
7.

1. MARGARET HOWELL
2. MHL.
3. and wander
4. Laline
5. Urth Caffé
6. THE LIBRARY
7. SEVEN BY SEVEN
8. SUNSPEL
9. YLÈVE
10.Quitan
11.Dice&Dice

PEARLY GATESMASTER BUNNY EDITIONJack Bunny!!
new balance golf
PING
NBB WEEKEND
St ANDREWS

Fashion Capital Div.
1.
2.
3.

4.
5.
6.
7.

NATURAL BEAUTY BASICN.
PROPORTION BODY
DRESSING
Apuweiser-riche
Arpege story
CADUNÉ
Mystrada

Street Div.
1.
2.
3.
4.
5.
6.

3

Fashion CapitalSTÜSSYHUF
UNDEFEATEDTACTICSAVIREX
SchottDigital Generation
Digital Generation Div.

8.
9.
10.
11.
12.
13.

JUSGLITTY
Rirandture
ADORE
human woman
LE PHILPINKY & DIANNE

2

Street & Culture

1.
2.
3.
4.
5.
6.
7.
8.

ETRÉ TOKYOMECRE
CHAROL
FREE’S MARTROSE BUDJILLSTUARTJILL by JILLSTUART
hueLe Museum

Culture Div.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

NANO universeB’2nd (GARDEN, WARE-mo-KOU)
ROYAL FLASH
LHP
MANASTASH
Dorothy Lang
BEAVERUNION TOKYOBAIT
FIGURE
Forget-me-nots

4

22

Wellness & LifestyleCreating attractive communities
Sublimating apparel brands into community brands.

“Jack Bunny!!” Junior Golf Tour 2022 was held

Developing entertainment business closely linked to lifestyles.

Net sales¥22.67 Billion

YoY change

121.2%

22,676

32.6%

Ratio tototal sales“and wander” expands new communities in North America“and wander” is a brand with 50% ormore of an overseas wholesale ratio.
Until now, its main business was
shipment to European markets. From2022 fall/winter products, the brand will
start cultivating the North America area.
It will execute an agreement with ashowroom in NY to cultivate new
global markets.

To nurture and back up next-generation
golfers, the Jack Bunny Junior Golf Tourwas started in 2012. In this year, thetour was held at 14 courses in total andbrought excitement to each area. The
business results also performed well.
Amid the COVID-19 catastrophe, thebusiness keeps multi-digit growthconstantly.

“Urth Caffé” provides a locally rooted place
In a quiet residential area in Chigasaki,
the seventh store opened in Japan. In
addition to conventional strategies toopen stores in large-scale commercial
facilities, as a restaurant business, we
aim to offer a place enabled to root inand contribute to local areas. As abusiness to provide a new food culture,
we will enhance cultivation of places for
opening stores.

23

Street & Culture

Platform for play rooted in the street spirit
By extending to the keyword “play,” the platform aims at
spreading itself to neighboring lifestyles, reinventing gears,

20th anniversary “ONE HUF PROJECT” opens new stores aggressively

and offering new experiences.

Net sales¥24.72 Billion

YoY change

102.8%“HUF” was founded in 2002 and marks the 20th anniversary thisyear. The brand globally launches various anniversary or
collaboration items that suit the 20th anniversary and attracts
endorsement from fans in and outside Japan.

24,727

35.5%
Ratio tototal sales

Net sales 237.1% vs previous term
In this fall, the brand opened newstores in “Kobe” and “Iruma” andPOP-UP STOREs in “Kisarazu”
and “Kumamoto,” respectively.

“AVIREX” performs very well thanks to the smash hit of Top Gun
20.0

Thanks to the smash hit of the movie“Top Gun: Maverick,” related products
performed well. The movie resulted inacquiring new customers. Some
consumers even visited our storesright after watching the movie. Net
sales was 120.5% from theprevious term and performed well.

18.0

Four-year changes
in 1st half net sales in JapanHUF KOBE SANNOMIYA
September 10, 2022
OPEN
HUF IRUMA
October 1,
2022 OPEN

1.7 billion yen

237.1% vsprevious term
(CAGR 60.0%)

16.0

14.0

12.0

10.0

8.0

0.75 billion yen

HUF KISARAZU
September 16, 2022 OPEN

6.0

0.43 billion yen

4.0

0.41 billion yen

2.0

0.0

2020 Ending 2021 Ending 2022 Ending 2023 Ending
Feb.
Feb.
Feb.
Feb.

HUF KUMAMOTO
October 8, 2022 OPEN

24

Fashion CapitalServices that respond constantly to market trends and changes
Being flexible enough to continue changing gracefully, granting

the wishes of customers, and extending a circle of happiness.

“Arpege story” has strengths in OMO strategies
16,066

Net sales¥16.06 Billion

YoY change

118.1%

23.1%
Ratio tototal sales“LE PHIL” has great response from markets

The brand provides services that leverage strengths of each channel, including“pre-selling products on EC,” “reserving at-store pick-ups from EC,” and “serving
customers at stores by utilizing EC inventories,” mutually refers customers
between EC and stores, and achieves sales growth.
Sales of real stores was 225.6% from the previous term, while sales of EC
was 220.3% from the previous term. Both channels grow and continue toperform well.
By enhancing customer contact points such as fulfilling content and livecommerce with attractive guests, the brand communicates its brand value andgains endorsement.

Net sales 177.2%
vs. previous term
The live streaming on Instagram every Thursday
penetrates. The brand attracts attention frominfluencers and stylists. Pre-orders at exhibitions
marked about 200% from the previous term.
The brand is rapidly valued internally andexternally. Net sales of both EC and real storesgrew rapidly.

▲ The EC site increases frequency for updating content such as planning pages andcatalogs to enrich the site

25

Digital Generation

Continuously expanding content to win over the next
generation of customers
Obtaining a favorable response and generating strong excitement

A new D2C brand “CHAROL” makes a debut

through tangible and intangible content that expands infinitely.

Net sales¥6.11 Billion

6,112

YoY change

110.7%

8.8%
Ratio tototal sales

From 22 AUTUMN / WINTER, we launch“CHAROL.”
The brand proposes a relaxy-mode style thatmixes moderate effortless relax in modestyles. As it focuses its business on EC, it will
open two POP-UP STOREs in Tokyo andOsaka in this winter.

“hueLe Museum” x “logi PLANTS & FLIWERS”

ETRÉ TOKYO x EDWIN

This is a D2C business under theconcept of “ART x FLOWER x
FASHION.” The POP UP store at
GINZA SIX has the various
content merchandise and events
related to ART and FLOWER. The
business considers new actions
that incorporate digital x factory
production structures.

We launched items collaborated withETRÉ TOKYO and EDWIN on August 11.
We sold three items of wide pants, highrise suspended skirts and jumpsuits. The
planned quantities sold out immediately.
We will offer topics by attractive productdevelopment and new contrivances. The
business continues to get on a highgrowth path.

26

×

×

Launch of a joint metaverse
project with Alibaba Cloud and
JP GAMES
The “metaverse” is a three-dimensional virtual
space and expected as a next-generation channel
for EC sales.
Beyond goods-selling channels, the threecompanies will jointly plan and develop new
schemes and services for the “nice-to-have!” newbrand experience and products that enable people
to experience only in metaverse spaces.
Prototype model

We will utilize 3Ds of various brands
to pursue and promote the potentialof fashion digital entertainment©2022 JP GAMES, Inc. ALL RIGHTS RESERVED

6

Initiatives related to the SDGs

28

SDGs

Information disclosure based on the TCFD recommendations
We agree with the recommendations by TCFD and disclose the four items; “governance,” “risk management,” “strategy,”and “metrics and targets.”
We visualized CO2 emissions of Scopes 1, 2 & 3 and set the reduction targets with an eye to acquiring SBT certifications.

GovernanceIndicator and Goal

We established the Sustainability
Committee as a function toenhance and promote governance.

Visualize CO2 emissions throughout the value chain and set specificreduction targets for 2030 with the aim of becoming carbon neutral by 2050.

CO2 Emissions and Reduction Goals
Scopes 1 – 3(total)Scopes 1
and 2

Scope 3CO2 emissions in
February, 2020

305K tons

9K tons

295K tons

CO2 emissions
reduction goals Feb
2030

-35%
(-108K tons)-48%(-4K tons)-35%(-103K tons)―

1.5 degrees C(Target)4.2% reduction
every year

WB2 degrees C(Target)2.5% reduction
every year

Risk management
Based on scenarios of IEA and
IPCC, we identified the business
continuity/growth risks related toclimate change. We will takemeasures toward growth.
*The reduction goal for Scope 1 and 2 coincides with the 1.5
degrees C target. The reduction goal for Scope 3 coincides
with the 2050 carbon neutrality target.
As for CO2 emissions, all numbers smaller than 1,000 are
rounded down to the nearest 1,000 in the above list.

CO2 emissions
reduction goals inline with SBT

29

SDGs

Toward realizing carbon neutrality by 2050
Based on risks, we formulate three innovation domains in order to create opportunities.
Toward carbon neutrality by 2050, we will make strategies concrete.
Specific examples of three opportunity-creating
innovation domains and strategies●Engagement Innovation* The new organization established on
October 1, 2022 will make strategies
concrete.

Engagement
Innovation[Customer Engagement– Sales Method]

Material
Innovation[Raw materials]●Material Innovation• Reduce purchase quantities• Change materials to materials with low
environmental burdens●SCM Platform Innovation• Introduce renewable energy aselectrical power used at our offices,
streetside stores and factories

SCM
Platform
Innovation[Manufacturing – Logistics –Resource Circulation]*For details, see the “TCFD-Based Information Disclosure” disclosed on October 12, 2022.

30

SDGs

Sustainable topics in 1st half
From raw materials, manufacturing process to sales approaches, we drive sustainable productmanufacturing that is environment- and human rights-conscious.
We will create an environment where employees are easier to work while we value resources.
TSI ALL GOLF BRANDS
A first sustainable exhibition was hold

Waste materials are used for the interior of
the new company building

Under the theme of “sustainable future of golf thought by
GOLF BRAND,” a sustainable exhibition was held jointly
by golf brands for the first time as the TSI Group.
The exhibition released environment-friendly initiatives
under the themes of “earth,” “society,” and “human.”

We relocated the head office in September and got off
to a new start.
Including a library, recycled materials are used for theinterior of various places at the new office.

▲ A booth related to earth
environment exhibited initiatives
for reducing environmental
burdens▲ A talk was also conducted
between Senior Executive
Officer Senza (right) and Ms.
MAGGY, a model▲ Materials recycled from waste
tires are used for floors▲ Materials upcycled from waste
cloth fabrics are used forbookshelves

SDGs

31

A project for developing TSI original organic cotton
We executed an outsourcing agreement with SynCom Agritech, an agricultural venture company, under thetheme of the “study on development of TSI’s organic cotton and reforms of raw cotton productivity.” In the Stateof Tamil Nadu in India, we started cotton farming that is unique to TSI.
SynCom Agritech was founded by the members
who met at the University of Tsukuba, with theaim of innovating organic agricultural
production

(1)

(2)

Soil enrichment
approach using
agricultural
ecosystem

Uniquelydeveloped plant
protection
material(3)

Agricultural farmmanagement
using IoTThe SynCom’s
strength is farming
consulting by making
full use of the threeskills

Productivity reforms for organic cotton with small
production volume
By utilizing organic agriculture technologies to work on all processes
from raw material production, spinning to sales within the company, we
will reduce environmental burdens and manage traceability
centrally to improve a working environment for workers and proceedsustainable cloth production. In the future, we will aim to put into
practical use for brands such as NANO universe and NATURALBEAUTY BASIC.

Content of local initiatives by SynCom Agritech• Execute a joint study agreement with the Tamil Nadu Agricultural University• Operate an about two-hectare TSI test farm (completed planting of four
varieties) with ASSEFA, an association for supporting farmers• Establish a ginning factory specialized in organic cotton at a closed school sitewith ASSEFA• Supply organic agrochemical alternatives to farmers through an agriculturalorganization SEEDS (more than 200 farmers participated)

State of Tamil
Nadu• Ship products to spinning factories of the RAMCO Group to make prototypes forgray fabric and knitting fabric for TSI▲ Scene of work in a farm

• Eye to obtain a GOTS certification for about 650-hectare farming land through
NPOP, an organic agricultural certification body

7

Full-year Forecast

33

Upward adjustment of full-year consolidated profit and loss plan for FY Ending Feb. 2023

Based on the business results for the 2Q cumulative consolidated period, we decided to adjust the
expected business results for full-year consolidated profit and loss for the fiscal year ending in February
2023, which were announced on April 13, 2022. For details, see the information below.
Expected amount(previously
announced)

Net Sales

Expected amount (adjusted this time)

Plan

Composition
Rate

Plan

(Billion Yen）

（%）

Plan

(Billion Yen）

Composition
Rate（%）(Billion Yen）

Rate ofchange（%）

157.35100%

154.00

100%

-3.35

-2.1%

Operating Profit

1.50

1.0%

1.80

1.2%

+0.30

20.0%

Ordinary Income

2.40

1.5%

3.30

2.1%

+0.90

37.5%

Profit Attributable to
Owners of Parent

1.50

1.0%

2.40

1.6%

+0.90

60.0%

Net Income Per Share¥16.59¥27.63

Regarding net sales, we reviewed the expected business results for the second half, in addition to actual results for the first half. Based on
impacts of global inflation, a weaker yen and other elements, we conservatively evaluated factors such as an impact on sale in 4Q. After
that, we estimate to increase the profit attributable to owners of parent by 0.9 billion yen than initially expected. Regarding operating profit
and ordinary income, based on the actual results for the first half and the expected business results for the second half, we also made an
upward adjustment of the previously announced, expected full-year business results.

Nurture worldwide empathy and social value through the power of fashionentertainment.

A company creating fashion entertainment8Reference Data

36

Highlights of 1st Half Results for FY Ending Feb. 2023
※2
Unit:Million
Yen

Overview(Revenue recognition standards)*1

1ST Half 2023 Ending
Feb.
Results

CompositionRate (%)*2

1ST Half 2023 Ending Feb.

Results

Composition
Rate (%)

Y/Y
ChangeY/Y (%)Net Sales

64,751

100.0

72,087

100.0

7,336

111.3

Gross Profit

35,294

54.5

40,735

56.5

5,440

115.4

SG&A Expenses

34,16052.8

40,146

55.7

5,985

117.5

32,23849.8

37,925

52.6

5,686

117.6

389

0.6

217

0.3

-171

56.0

1,532

2.4

2,003

2.8

470

130.7

Operating Income

1,134

1.8

588

0.8

-545

51.9

Ordinary Income

2,002

3.1

1,892

2.6

-110

94.5

Extraordinary Income

1,443

2.2

873

1.2

-569

60.5

Extraordinary Loss

1,067

1.6

248

0.3

-818

23.3

Profit Before Taxes

2,378

3.7

2,517

3.5

139

105.8

Profit Attributable to Owners of Parent

1,890

2.9

2,249

3.1

359

119.0

EBITDA *3

3,056

4.7

2,810

3.9

-246

91.9

SG&A Expenses(excl. Goodwill Amortization,
Depreciation and Amortization)
Goodwill Amortization
Depreciation and Amortization*1The old revenue recognition standards were applied to the term ended February 2022.
*2The new revenue recognition standards are applied to the term ending February 2023.
*3 EBITDA＝Operating Income + Goodwill Amortization + Depreciation and Amortization

37

Highlights of 1st Half Results for FY Ending Feb. 2023

Net Sales
Per Channel

Unit:Million Yen※４※4※4*3

1ST Half 2022 Ending Feb.

*4 1ST Half 2023 Ending Feb.

(Revenue recognition standards)

Composition
Rate Y/Y
Change(pt)Results(Million yen)

Composition
Rate (%)

Results(Million yen)

Composition
Rate (%)

Department Stores

6,314

9.8

9,565

13.3

151.5

+3.5

Commercial Facilities(*1)

27,35942.3

31,375

43.5

114.7

+1.3

In-house EC

8,993

13.9

8,731

12.1

97.1

-1.8

3rd Party

9,792

15.1

9,096

12.6

92.9

-2.5

E-Commerce

18,78529.0

17,828

24.7

94.9

-4.3

Others(*2)

7,438

11.5

7,185

10.0

96.6

-1.5

Domestic

59,89892.5

65,955

91.5

110.1

-1.0

E-Commerce

1,603

2.5

1,942

2.7

121.2

+0.2

Overseas

4,852

7.5

6,132

8.5

126.4

+1.0

E-Commerce TOTAL

20,38831.5

19,771

27.4

97.0

-4.1

TOTAL

64,751

100.0

72,087

100.0

111.3

-

Y/Y (%)*1 Fashion buildings, shopping centers, railroad station buildings, individual stores, outlet shops etc. except for department stores.
*2 Apparel businesses such as wholesale, intercompany sales and non-apparel businesses of the group companies.
*3 The old revenue recognition standards were applied to the term ended February 2022.
*4The new revenue recognition standards are applied to the term ending February 2023.

38

Highlights of 1st Half Results for FY Ending Feb. 2023
Unit:Million Yen

Brands Overview*1*2

1ST Half 2022 Ending Feb.

Y/Y

1ST Half 2023 Ending Feb.

(Revenue recognition standards)
Sales

Composition
Rate (%)

Gross Profit
Ratio (%)

Sales

Composition
Rate (%)

Gross Profit
Ratio (%)

Sales (%)

Gross Profit
Ratio (pt)1.

PEARLY GATES

7,136

11.0

63.6

8,369

11.6

63.3

117.3

-0.2

2.

NANO universe

7,598

11.7

46.2

6,165

8.6

52.1

81.1

+5.9

3.

MARGARET HOWELL

5,173

8.0

66.4

5,978

8.3

65.3

115.6

-1.2

4.

NATURAL BEAUTY BASIC

4,978

7.7

58.8

5,377

7.5

63.0

108.0

+4.2

5.

HUF

2,749

4.2

51.2

4,686

6.5

51.1

170.5

-0.1

6.

AVIREX

2,535

3.9

59.4

2,805

3.9

65.3

110.6

+5.9

7.

UNDEFEATED

2,493

3.9

41.7

2,314

3.2

39.8

92.8

-1.9

8.

new balance golf

1,646

2.5

57.8

2,196

3.0

51.7

133.4

-6.0

9.

human woman

1,431

2.2

59.4

2,131

3.0

65.0

148.8

+5.6

10.

STUSSY

2,076

3.2

70.1

2,039

2.8

65.6

98.2

-4.4

TOP10

37,81958.4

57.2

42,064

58.4

59.0

111.2

+1.8

Other Brands

26,62041.1

51.1

29,995

41.6

53.1

112.7

+2.0

Continuing Brands

64,44099.5

54.6

72,060

100.0

56.5

111.8

+1.9

311

0.5

26.7

27

0.0

73.9

8.8

+47.2

64,751

100.0

54.5

72,087

100.0

56.5

111.3

+2.0

Closed Brands
TOTAL*1The old revenue recognition standards were applied to the term ended February 2022.
*2The new revenue recognition standards are applied to the term ending February 2023.

39

Highlights of 1st Half Results for FY Ending Feb. 2023

Domestic Monthly Sales Information

40

Highlights of 1st Half Results for FY Ending Feb. 2023

The Number of Stores
1ST Half 2022 FY Ending
Ending Feb. Feb. 2022

Store
Open

Store
Close

1ST Half
2023 Ending
Feb.

Y/Y
ChangeQ2/Q4
ChangeDomestic

848

805

+18

-49

774

-74

-31

Overseas

48

41

-

-1

40

-8

-1

合計

896

846

+18

-50

814

-82

-32

Restaurant

Domestic

9

7

+1

-

8

-1

+1

Cosmetics

Domestic

32

36

+1

-1

36

+4

-

937

889

+20

-51

858

-79

-31

ApparelTotal

・Descriptions about future within this document are based on the information that the company obtains on the date of this report andcertain assumptions deemed to be reasonable. Actual earnings may differ materially from various future factors.
・This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between thistranslated document and the Japanese original, the original shall prevail.