Consolidated Financial Results
for the Six Months Ended August 31, 2021
[Japanese GAAP]
October 7, 2021
Company name: Onward Holdings Co., Ltd.
Stock exchange listing: Tokyo Stock Exchange
Securities code: 8016
URL: https://www.onward-hd.co.jp/site/english/
Representative: Michinobu Yasumoto, President and CEO
Contact: Osamu Sato, Director in charge of Finance, Accounting, Investor Relations
Phone: +81-3-4512-1030
Scheduled date of filing quarterly securities report: October 14, 2021
Scheduled date of commencing dividend payments: –Availability of supplementary materials on quarterly financial results: Available
Schedule of quarterly financial results briefing session: Scheduled (for institutional investors, securities analysts, andthe press)(Amounts of less than one million yen are rounded down.)
1. Consolidated Performance for the Six Months Ended August 31, 2021 (March 1, 2021 – August 31, 2021)(1) Consolidated Operating Results (cumulative)(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Recurring profit
owners of parent
Six months ended
Million yen% Million yen% Million yen% Million yen%
August 31, 2021
80,785(0.7)(3,294)–(2,862)–
7,448–
August 31, 2020
81,353 (31.3)(10,979)–(11,454)–(15,188)–(Note) Comprehensive income: Six months ended August 31, 2021: 9,842 million yen [–%]
Six months ended August 31, 2020: (12,250) million yen [–%]
Basic earnings per
Diluted earnings
share
per share
Six months ended
Yen
Yen
54.92
54.81
August 31, 2021
August 31, 2020(112.26)–(Reference) EBITDA (operating profit + depreciation and amortization):
Six months ended August 31, 2021: (687) million yen [–%]
Six months ended August 31, 2020: (7,989) million yen [–%]
(Notes) 1. The Company has applied “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020) and “Implementation Guidance on Accounting Standard for Revenue Recognition”(ASBJ Guidance No. 30, March 26, 2021) early, from the beginning of the first quarter of the fiscal year
under review.
2. The presentation method has been changed from the first quarter of the fiscal year under review, andtherefore, with regard to net sales, operating profit, and EBITDA in the Consolidated Operating Results(cumulative), the Company states figures and year-on-year changes after reclassification that reflect thischange in the presentation method.
(2) Consolidated Financial Position
Total assets

Net assets

Shareholders’equity ratio

Million yen
Million yen
165,157
As of August 31, 2021
65,441
196,052
As of February 28, 2021
59,509(Reference) Shareholders’ equity: As of August 31, 2021: 65,057 million yen
As of February 28, 2021: 56,723 million yen

%
39.4
28.9

2. Dividends
Annual dividends per share
2nd quarter3rd quarter1st quarter-end
Year-end
end
end
Yen

Yen

Yen

Fiscal year ended–––
February 28, 2021
Fiscal year ending––
February 28, 2022
Fiscal year ending
February 28, 2022–
(Forecast)(Note) Revision to the forecast for dividends announced most recently: No

Total

Yen

Yen

12.00

12.00

12.00

12.00

3. Consolidated Performance Forecast for the Fiscal Year Ending February 28, 2022 (March 1, 2021 - February
28, 2022)(% indicates changes from the previous corresponding period.)
Profit attributable
Basic earnings
Net sales
Operating profit
Recurring profit
to owners ofper share
parentMillion yen% Million yen% Million yen% Million yen%
Yen
Full year
174,600 (0.7)
1,000
–
1,200
–
8,200
–
60.47
(Note) Revision to the performance forecast announced most recently: Yes
The presentation method has been changed from the first quarter of the fiscal year under review, andtherefore, year-on-year change in net sales has been calculated using the figures for the same period of theprevious fiscal year after reclassification that reflect this change in the presentation method.
(Reference) EBITDA (operating profit + depreciation and amortization):Full year ending February 28, 2022 (forecast): 6,940 million yen [–%]
Full year ended February 28, 2021: (14,133) million yen [–%]

* Notes:(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting inchanges in scope of consolidation): None
Newly included: – (Company name:)
Excluded:– (Company name:)(2) Application of special accounting methods for the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting policies, changes in accounting estimates, and restatement
1) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Restatement: None
(4) Total number of issued shares (common stock)1) Total number of issued shares at the end of the period (including treasury shares):
As of August 31, 2021:
157,921,669 shares
As of February 28, 2021:
157,921,669 shares2) Total number of treasury shares at the end of the period:
As of August 31, 2021:
22,309,031 shares
As of February 28, 2021:
22,322,123 shares
3) Average number of shares outstanding during the period:
Six months ended August 31, 2021:
135,607,220 shares
Six months ended August 31, 2020:
135,297,917 shares* These quarterly consolidated financial results are outside the scope of quarterly review by certified public accountants
or an audit firm.
* Explanation of the proper use of performance forecast and other notes
The performance outlook and other forward-looking statements herein are based on information currently available to
the Company and certain assumptions that have been deemed reasonable. Actual performance may differ significantly
from these forecasts due to a wide range of factors. For conditions used as the assumptions for the performance
forecast and notes on the use of performance forecast, please refer to “1. Qualitative Information on Quarterly
Financial Results for the Period under Review (3) Explanation of Consolidated Performance Forecast and Other
Forward-looking Information” on page 3 of the Attachments.

Table of Contents - Attachments
1. Qualitative Information on Quarterly Financial Results for the Period under Review ...................... 2(1) Explanation of Operating Results .................................................................................................... 2(2) Explanation of Financial Position .................................................................................................... 3(3) Explanation of Consolidated Performance Forecast and Other Forward-looking Information ....... 4
2. Quarterly Consolidated Financial Statements and Principal Notes .................................................... 5(1) Quarterly Consolidated Balance Sheets ........................................................................................... 5(2) Quarterly Consolidated Statements of Income and Comprehensive Income ................................... 7
Quarterly Consolidated Statements of Income ............................................................................ 7
Quarterly Consolidated Statements of Comprehensive Income .................................................. 8(3) Quarterly Consolidated Statements of Cash Flows .......................................................................... 9(4) Notes to Quarterly Consolidated Financial Statements .................................................................. 10(Uncertainties of entity’s ability to continue as going concern) ................................................ 10(Notes when there are significant changes in amounts of shareholders’ equity) ............................ 10(Changes in accounting policies) ................................................................................................. 10(Additional information) ............................................................................................................. 11(Notes to Quarterly Consolidated Statements of Income) ............................................................. 12(Segment information, etc.) ....................................................................................................... 13(Significant events after reporting period) ................................................................................ 141

1. Qualitative Information on Quarterly Financial Results for the Period under Review(1) Explanation of Operating Results
During the six months ended August 31, 2021, although economic recovery was expected in line with theprogress in vaccination against COVID-19, the spread of COVID-19 variants did not slow down. In response,
the government expanded the areas subject to the declaration of a state of emergency and priority measures toprevent the spread of the virus, leading to sluggish consumer sentiment and economic activities that weresignificantly restricted. As a result, the outlook of the Japanese economy continued to remain uncertain.
In these circumstances, the Company launched the CRAHUG project, a Direct to Consumer (D2C) support
project, with the aim of supporting production in Japan. The project provides assistance to producers andfactories across the country in production management, sales support and sales promotion of their original
products. In addition, the D2C brand #Newans is promoting innovations in new business models. For example,
the brand’s Creating Together Project, a consumer engagement-type framework launched this spring, created a
Consumer to Consumer (C2C) model featuring product planning that gives shape to consumer feedback.
Net sales continued to suffer severe conditions from the impact of the prolonged declaration of the state of
emergency. However, as the global business reforms that had been conducted since the autumn of 2019 playedout, operating profit and loss improved mainly due to a significant improvement in gross profit margin as well
as a reduced SGA ratio achieved by cutting fixed costs.
As a result of the above, consolidated net sales amounted to 80,785 million yen (a 0.7% decrease year-onyear), a consolidated operating loss was recorded at 3,294 million yen (an operating loss of 10,979 million yen
for the same period of the previous fiscal year), a consolidated recurring loss was recorded at 2,862 million yen(a recurring loss of 11,454 million yen for the same period of the previous fiscal year), and profit attributable toowners of parent amounted to 7,448 million yen (a loss attributable to owners of parent of 15,188 million yen
for the same period of the previous fiscal year).
Furthermore, the Group has adopted EBITDA (operating profit + depreciation and amortization) as amanagement indicator with the purpose of enabling convenient comparisons between companies regardless ofdifferences in accounting standards, amid its efforts to accelerate growth through enhancement and expansion ofbusiness foundations that utilize creation of new businesses, M&A, etc.
EBITDA for the six months ended August 31, 2021 was (687) million yen ((7,989) million yen for the same
period of the previous fiscal year).
The Company has applied “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020) and “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ
Guidance No. 30, March 26, 2021) from the beginning of the first quarter of the fiscal year under review. The
details are described in “2. Quarterly Consolidated Financial Statements and Principal Notes, (4) Notes to
Quarterly Consolidated Financial Statements, (Changes in accounting policies).”
In addition, the presentation method has been changed from the beginning of the first quarter of the fiscal
year under review. Therefore, for year-on-year comparison of operating results, the Company uses the figures in
the Quarterly Consolidated Financial Statements for the six months ended August 31, 2020 after reclassification,
which reflect this change in the presentation method. The details of the change in the presentation method aredescribed in “2. Quarterly Consolidated Financial Statements and Principal Notes, (4) Notes to Quarterly
Consolidated Financial Statements, (Additional information), (Changes in the presentation method).”
Status by segment is as follows.
[Apparel Business]
In the domestic business, at Tiaclasse Co., Ltd., whose main sales channel is e-commerce, both sales and profit
increased as in the previous fiscal year. In addition, sales increased with improved operating profit and loss at
Onward Kashiyama Co., Ltd., which is a core group company, and at Island Co., Ltd., which operates Grace
Continental as its core brand.

2

In the overseas business, profitability improved as withdrawal from unprofitable businesses under the global
business reforms played out, and operating loss was minimized.
As a result, operating loss was significantly minimized despite a decrease in sales for the Apparel Businessas a whole.
[Lifestyle Business]
Sales increased, and profitability was restored at Chacott Co., Ltd., which operates a wellness business, due tostrong performance of its mainstay ballet products as well as the Chacott COSMETICS and Chacott BALANCE
brands, which cater to new lifestyles. In addition, sales increased, and profitability was restored also at Creative
Yoko Co., Ltd., which is engaged in a pet and home life business, due to strong performance of its products thatdesigned for at-home consumption. Meanwhile, both sales and profit decreased at companies including Onward
Beach Resort Guam, Inc., which operates a resort business in Guam, due to the continued declaration of a stateof emergency.
As a result, both sales and profit increased for the Lifestyle Business as a whole.

(2) Explanation of Financial Position(Status of assets, liabilities, and net assets)
Total assets as of the end of the second quarter of the fiscal year under review decreased by 30,894 million yen
compared with the end of the previous fiscal year to 165,157 million yen. This was primarily due to decreases
in land of 9,774 million yen, merchandise and finished goods of 3,784 million yen, and notes and accounts
receivable—trade, and contract assets of 7,263 million yen.
Liabilities decreased by 36,827 million yen compared with the end of the previous fiscal year to 99,716
million yen. This was primarily due to decreases in notes and accounts payable—trade of 5,855 million yen andshort-term borrowings of 19,287 million yen.
Net assets increased by 5,932 million yen compared with the end of the previous fiscal year to 65,441
million yen. This was primarily due to profit attributable to owners of parent of 7,448 million yen, dividends ofsurplus of 1,627 million yen, and an increase in surplus at the beginning of the period due to changes inaccounting policies of 272 million yen.
As a result, shareholders’ equity ratio was 39.4%.
(Status of cash flows)
Cash flows provided by operating activities amounted to 962 million yen (an outflow of 22,914 million yen forthe same period of the previous fiscal year) primarily due to recording profit before income taxes, and decreases
in trade receivables and trade payables.
Cash flows provided by investing activities amounted to 20,022 million yen (an inflow of 4,500 million yen
for the same period of the previous fiscal year) primarily due to proceeds from sales of property, plant andequipment.
Cash flows used in financing activities amounted to 23,966 million yen (an inflow of 16,025 million yen
for the same period of the previous fiscal year), which primarily included a net increase (decrease) in borrowingsand dividends paid.
As a result, cash and cash equivalents as of the end of the six months ended August 31, 2021 decreased by
2,008 million yen compared with the end of the previous fiscal year to 19,261 million yen.

3

(3) Explanation of Consolidated Performance Forecast and Other Forward-looking Information
Revisions have been made to the consolidated performance forecast for the full year ending February 28, 2022,
which was announced on April 8, 2021, based on the financial results for the second quarter of the fiscal year
under review. For details, please refer to “Notice on Differences between the Consolidated Performance Forecast
and the Results for the Six Months Ended August 31, 2021 and Revisions to the Consolidated Performance
Forecast for the Full Year Ending February 28, 2022” announced today, October 7, 2021.
The presentation method has been changed from the first quarter of the fiscal year under review, andtherefore, year-on-year change in net sales has been calculated using the figures for the same period of theprevious fiscal year after reclassification, which reflect this change in the presentation method.

4

2. Quarterly Consolidated Financial Statements and Principal Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of February 28, 2021
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable—trade
Notes and accounts receivable—trade, and contract
assetsMerchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

5

As of August 31, 2021

21,301
18,251

19,286－－

10,98728,909
1,010
4,435
6,829
(277)
80,46025,124
712
2,796
3,840
(301)
62,44724,31635,25912,24971,82523,272
25,484
12,521
61,2785,251
5,416
10,667

4,959
5,144
10,103

14,312
2,814
7,486
8,778
(292)
33,099115,592
196,052

14,689
2,908
5,101
8,957
(328)
31,328102,710
165,157(Million yen)
As of February 28, 2021
Liabilities
Current liabilities
Notes and accounts payable—trade
Electronically recorded obligations—operating
Short-term borrowings
Income taxes payable
Provision for bonuses
Provision for bonuses for directors
Provision for sales returns
Provision for point card certificates
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Retirement benefit liability
Provision for retirement benefits for directors andcorporate auditors
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

6

As of August 31, 2021

13,4728,484
61,618
669
589
25
125
636
13,927
99,5497,616
8,197
42,331
2,925
917
33
－
－
10,18072,202

16,4303,482

14,404
3,083

232

240

1,661
15,18736,993
136,543

2,644
7,141
27,513
99,71630,07950,3909,321(20,865)
68,92630,07950,39015,617(20,852)
75,235(1,939)15(7,864)(1,669)(744)(12,202)138
2,646
59,509196,052(1,121)(28)(7,619)(677)(730)(10,177)
131
252
65,441
165,157

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Six months ended August 31(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating loss
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Subsidy income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodForeign exchange losses
Other
Total non-operating expenses
Recurring loss
Extraordinary income
Subsidies for employment adjustment, etc.
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates
Total extraordinary income
Extraordinary losses
Loss on liquidation of business
Extraordinary loss due to closing and other
Loss on sales of shares of subsidiaries and associates
Impairment loss
Loss on valuation of investment securities
Loss on liquidation of subsidiaries and associates
Other
Total extraordinary losses
Profit (loss) before income taxes
Total income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent

For the six months
ended August 31, 2020
81,35347,00334,34945,328(10,979)

For the six months
ended August 31, 2021
80,78539,76741,01844,313(3,294)

23
116
－
108
438
685

20
91
109
450
573
1,244

242

221

38

42

648
232
1,161
(11,454)－548
812(2,862)

1,811
2,013
8
–
3,833

244
17,08992
2,944
20,370

953
3,254
–
904
1,657
–
430
7,200
(14,821)146(14,967)
221(15,188)

－
1,062
1,829
222
–
1,968
310
5,393
12,114
4,525
7,589
140
7,448

7

Quarterly Consolidated Statements of Comprehensive Income
Six months ended August 31(Million yen)

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests

For the six months
ended August 31, 2020
(14,967)

For the six months
ended August 31, 2021
7,589

2,028
7
1,064
(245)
(137)
2,717
(12,250)

818
(43)
453
1,011
14
2,253
9,842

(12,467)
217

9,682
159

8

(3) Quarterly Consolidated Statements of Cash Flows(Million yen)
For the six months
ended August 31, 2020
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Loss (gain) on sales of shares of subsidiaries andassociates
Loss (gain) on disposal of non-current assets
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Income taxes refund
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 investment securities
Proceeds from sales of investment securities
Payments of guarantee deposits
Proceeds from refund of guarantee deposits
Purchase of long-term prepaid expenses
Payments for sales of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from sales of shares of subsidiaries resulting inchange in scope of consolidation
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Dividends paid
Other, net
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
Increase (decrease) in cash and cash equivalents resulting
from change in scope of consolidation
Cash and cash equivalents at end of period

9

For the six months
ended August 31, 2021

(14,821)
2,804
904
397
(102)
242
(162)
(139)
242
8,301
(474)
(11,887)

12,114
2,392
222
382
86
(93)
7
(111)
221
4,369
1,573
(3,396)–(1,114)(1,986)(7,524)(24,204)
144
(260)
(452)
1,858
(22,914)(17,055)
998
596
161
(327)
(1,802)
2,334
962

(51)
26
(2,950)
7,788
(25)
503
(140)
336
(48)

(31)
39
(1,658)28,987
(7)
504
(856)
864
(17)

–

(8,366)

–

1,620

(938)
4,500

(1,054)20,022

18,5185,000(2,376)(3,240)(1,875)16,025(226)(2,614)28,780(19,262)–(2,526)(1,627)(550)(23,966)973(2,008)21,270100–

26,265

19,261

(4) Notes to Quarterly Consolidated Financial Statements(Uncertainties of entity’s ability to continue as going concern)
Not applicable.
(Notes when there are significant changes in amounts of shareholders’ equity)
Not applicable.
(Changes in accounting policies)(Application of the Accounting Standard for Revenue Recognition, etc.)
The Company has applied “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31,2020) and “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No.
30, March 26, 2021) (hereinafter referred to as the “Accounting Standard for Revenue Recognition, etc.”) fromthe beginning of the first quarter of the fiscal year under review, and recognizes revenue in the amount expected
to be received in exchange for promised goods or services at the time when the control of these goods or services
is transferred to the customer.
The main changes resulting from the application of the Accounting Standard for Revenue Recognition, etc.
are as follows.
(Revenue recognition for principal and agent transactions)Regarding transactions in which the Company acts an agent in providing goods to a customer, the Company
previously recognized the gross amount of consideration to be received from the customer as revenue. However,
the Company has shifted to the method by which it recognizes revenue at the net amount after deducting theamount to be paid to the supplier of goods from the amount to be received from the customer. Meanwhile, withregard to transactions in which the Company acts as a principal and whose revenue was previously recognizedat the net amount after deducting an amount equivalent to distribution fees from the amount to be received fromthe customer, the Company has shifted to the method by which it recognizes revenue at the gross amount ofconsideration.
(Revenue recognition for customer loyalty program)
Regarding the sale of goods under the customer loyalty program, which grants points to customers when goods
are sold, the Company previously recognized revenue at the time of sale, recorded an amount expected to be
used from the points granted as “Provision for point card certificates,” and recorded the amount of provision forpoint card certificates as “Selling, general and administrative expenses.” However, the Company has shifted tothe method by which it identifies the points granted as performance obligations and allocates the transaction
price based on the standalone selling price estimated in consideration of the points that are expected to expire in
the future.
(Revenue recognition for sale with a right of return)Regarding “Provision for sales returns,” which was previously recorded under “Current liabilities” based on an
amount equivalent to gross profit, the Company has shifted to the method by which it recognizes revenue andcost of sales at the amounts excluding amounts equivalent to revenue and cost of sales for merchandise andfinished goods that are expected to be returned. Compensation for merchandise and finished goods that are
expected to be returned is recorded as refund liabilities in “Other” under “Current liabilities,” and assets
recognized as the right to recover merchandize and finished goods from customers at the time of settlement ofrefund liabilities are recorded as return assets in “Notes and accounts receivable—trade, and contract assets”
under “Current assets.”

10The application of the Accounting Standard for Revenue Recognition, etc. is subject to the transitional
treatment provided for in the proviso to paragraph 84 of the Accounting Standard for Revenue Recognition. The
cumulative effect of the retrospective application of the new accounting policy, assuming it has been applied toperiods prior to the beginning of the first quarter of the fiscal year under review, is added to or subtracted fromretained earnings at the beginning of the first quarter of the fiscal year under review, and the new accounting
policy is applied from the said beginning balance. However, the new accounting policy has not been
retrospectively applied to contracts for which nearly all the revenue amounts had been recognized in accordancewith the previous treatment prior to the beginning of the first quarter of the fiscal year under review, by applying
the method provided for in paragraph 86 of the Accounting Standard for Revenue Recognition.
As a result, for the six months ended August 31, 2021, net sales increased by 3,469 million yen, cost of sales
decreased by 1,006 million yen, selling, general and administrative expenses increased by 4,501 million yen,operating loss and recurring loss each deteriorated by 25 million yen, and profit before income taxes decreased
by 25 million yen. In addition, the balance of retained earnings at the beginning of the period increased by 272
million yen. Due to the application of the Accounting Standard for Revenue Recognition, etc., “Notes andaccounts receivable—trade,” which was presented under “Current assets” in the Consolidated Balance Sheets forthe previous fiscal year, is instead included in “Notes and accounts receivable—trade, and contract assets” fromthe first quarter of the fiscal year under review. In accordance with the transitional treatment provided for inparagraph 89-2 of the Accounting Standard for Revenue Recognition, the Company has not reclassified financial
statements for the previous fiscal year by using the new presentation method.

(Additional information)(Changes in the presentation method)
While real estate lease revenue and real estate lease expenses were previously recorded in “Non-operating
income,” “Selling, general and administrative expenses,” and “Non-operating expenses,” they are recorded in“Net sales” and “Cost of sales” from the first quarter of the fiscal year under review. The Company positions realestate leasing as one of its major businesses, recognizes real estate lease revenue as a steady source of revenue,
and expects real estate lease revenue to grow along with an increase in the number of leasehold properties. In
addition, the relevant department now appropriately manages the profitability of the real estate leasing business.
In light of these circumstances, in order to present the actual state of the business more appropriately, theCompany has changed the presentation method. Quarterly Consolidated Financial Statements for the six months
ended August 31, 2020 have been reclassified to reflect this change in the presentation method.
As a result, 695 million yen presented in “Rental income from land and buildings” and 71 million yen
presented in “Other” under “Non-operating income” in the Quarterly Consolidated Statements of Income for thesix months ended August 31, 2020 have been reclassified as “Net sales.” Additionally, 36 million yen presented
in “Selling, general and administrative expenses” and 259 million yen of “Rental expenses” under “Nonoperating expenses” have been reclassified as “Cost of sales.”Furthermore, 2,754 million yen presented in “Other” under “Investments and other assets” in theConsolidated Balance Sheets for the previous fiscal year has been reclassified as “Buildings and structures, net”
of 2,728 million yen and “Other, net” of 26 million yen under “Property, plant and equipment.”(Accounting estimates related to the impact of the spread of COVID-19)
For the second quarter of the fiscal year under review, there are no material changes in the assumptions related
to the impact of the spread of COVID-19 that were stated in “Additional information (Accounting estimates
related to the impact of the spread of COVID-19)” in the securities report for the previous fiscal year.

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(Treatment of tax effect accounting for the transition from the consolidated taxation system to the group tax sharing
system)Regarding the transition into the group tax sharing system established by the “Act for Partial Amendment of the
Income Tax Act, etc.” (Act No. 8 of 2020) and the items for which the single-entity taxation system has beenrevised in conjunction with the transition into the group tax sharing system, the Company and certain consolidated
subsidiaries in Japan have not applied the provisions of paragraph 44 of “Implementation Guidance on Tax EffectAccounting” (ASBJ Guidance No. 28, February 16, 2018), in accordance with the solution in paragraph 3 of“Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation
System to the Group Tax Sharing System” (PITF No.39, March 31, 2020). The amounts of deferred tax assets
and deferred tax liabilities are based on the provisions of the tax laws prior to the amendment.

(Notes to Quarterly Consolidated Statements of Income)Due to requests from governments and municipalities in response to COVID-19, many of the stores located inretail facilities, directly-managed stores, resort facilities, and other locations were temporarily closed in regions
including Japan, North America, and Europe. Fixed expenses (including personnel expenses, depreciation, andrent expenses) for stores and resort facilities incurred during the periods of closure were recognized as“Extraordinary loss due to closing and other” in “Extraordinary losses.”12

(Segment information, etc.)
I Six months ended August 31, 2020 (From March 1, 2020 to August 31, 2020)
1. Information on net sales and profit or loss by reportable segment(Million yen)
Apparel BusinessNet sales(1) Net sales to outside
customers(2) Intersegment sales ortransfers
Total
Segment profit (loss)

LifestyleBusiness

Total

Amountrecorded in
Quarterly
Adjustments
Consolidated(Note 1)
Statements ofIncome(Note 2)

(Domestic)(Overseas)

49,175

14,89664,072

17,281

81,353–81,353

586

643

1,230

1,038

2,268

(2,268)–49,762(8,245)

15,540(2,831)65,302(11,077)

18,319434

83,621(10,642)(2,268)(336)

81,353(10,979)

Total(Notes) 1. The adjustment amount for segment profit (loss) of (336) million yen includes amortization of goodwillof (397) million yen, elimination of intersegment transactions of 2,367 million yen, and corporate
expenses not allocated to reportable segments of (2,306) million yen. Corporate expenses are mainly
general and administrative expenses that are not attributable to reportable segments.
2. Segment profit (loss) coincides with the amount of operating loss in the Quarterly Consolidated
Statements of Income.

2. Information on impairment loss on non-current assets or goodwill, etc. by reportable segment(Significant impairment loss on non-current assets)
Impairment loss was recorded in the “Apparel Business (Domestic),” “Apparel Business (Overseas),” and“Lifestyle Business” segments.
The amounts of impairment loss recorded in the “Apparel Business (Domestic),” “Apparel Business(Overseas),” and “Lifestyle Business” segments were 446 million yen, 456 million yen, and 1 million yen,respectively.
(Significant changes in the amount of goodwill)
There was no significant amount incurred or change in goodwill.

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II Six months ended August 31, 2021 (From March 1, 2021 to August 31, 2021)
1. Information on net sales and profit or loss by reportable segment(Million yen)
Apparel BusinessNet sales(1) Net sales to outside
customers(2) Intersegment sales ortransfers
Total
Segment profit (loss)

LifestyleBusiness

Total

Amountrecorded in
Quarterly
Adjustments
Consolidated(Note 1)
Statements ofIncome(Note 2)

(Domestic)(Overseas)

52,182

10,04662,22918,55680,785–80,785

323

589

912

619

1,532

(1,532)–52,506(3,637)

10,635(487)

63,141(4,124)

19,175
1,061

82,317(3,063)(1,532)(231)

80,785(3,294)

Total(Notes) 1. The adjustment amount for segment profit (loss) of (231) million yen includes amortization of goodwillof (382) million yen, elimination of intersegment transactions of 1,842 million yen, and corporate
expenses not allocated to reportable segments of (1,691) million yen. Corporate expenses are mainly
general and administrative expenses that are not attributable to reportable segments.
2. Segment profit (loss) coincides with the amount of operating loss in the Quarterly Consolidated
Statements of Income.

2. Information on impairment loss on non-current assets or goodwill, etc. by reportable segment
There was no significant impairment loss or significant change in goodwill.
3. Information on changes, etc. in reportable segments
As stated in “(Changes in accounting policies),” the Company has applied the Accounting Standard for Revenue
Recognition, etc. from the beginning of the first quarter of the fiscal year under review and changed theaccounting method for revenue recognition. Accordingly, it has also changed the method of calculating profit orloss for reportable segments.
As a result of these changes, for the six months ended August 31, 2021, for the “Apparel Business,” netsales increased by 3,630 million yen and segment loss deteriorated by 22 million yen, for the “Lifestyle Business,”
net sales and segment profit decreased by 160 million yen and 3 million yen, respectively, compared with those
calculated under the previous method.
In addition, as stated in “(Additional information), (Changes in the presentation method),” “Rental income
from land and buildings,” which was previously recorded under “Non-operating income,” has been reclassified
as “Net sales” from the first quarter of the fiscal year under review. In addition, “Depreciation and amortization,”
which was included in “Selling, general and administrative expenses,” and “Rental expenses,” which wasrecorded under “Non-operating expenses,” have been reclassified as “Cost of sales.” The figures in the segment
information for the six months ended August 31, 2020 have also been restated to reflect the reclassification. As aresult of these changes, segment loss for the “Apparel Business” improved by 22 million yen, and net sales andsegment profit for the “Lifestyle Business” increased by 767 million yen and 470 million yen, respectively,
compared with before the reclassification.

(Significant events after reporting period)
Not applicable.

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