TSI HOLDINGS CO., LTD.
Financial Results Briefing for the Fiscal Year Ended February 2023
April 13, 2023

Event Summary[Company Name]TSI HOLDINGS CO., LTD.

[Company ID]

3608-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Financial Results Briefing for the Fiscal Year Ended February 2023

[Fiscal Period]

FY2023 Annual[Date]

April 13, 2023

[Number of Pages]

24[Time]

10:00 – 10:42(Total: 42 minutes, Presentation: 30 minutes, Q&A: 12 minutes)[Venue]Webcast[Venue Size][Participants][Number of Speakers]

7
Tsuyoshi Shimoji
Masanori Maekawa
Mitsuru Naito
Jun Imaizumi
Hiroyuki Watanabe
Shunsuke Hasegawa
Kohei Yamada

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Presentation
Hasegawa: Good morning. The time has arrived. We would like to start the financial results briefing for thefull fiscal year ending February 28, 2023.
After this, we will play a video of the financial results presentation, and then have a question-and-answer
session.
We will now start the financial results briefing, thank you.

Shimoji: Good morning. Thank you for all your support. I would now like to present the financial results forthe full fiscal year ending February 28, 2023. Thank you for your cooperation.
First, let's start with the full-year financial highlights. Net sales were JPY154.45 billion, operating profit was
JPY2.32 billion, ordinary income was JPY3.85 billion, and net income was JPY3.06 billion.
Physical stores in Japan and overseas business remained strong throughout the year, and we were able toachieve our sales plan. Although there were various negative effects, such as the lockdown of production sites,
supply chain disruptions, and the deterioration of foreign exchange rates, we believe that we havesignificantly improved our profitability by carefully managing our business operations.
Therefore, with regard to sales, although EC growth remains a challenge, the results were 110% of theprevious year's level and 100.3% of the planned level. Operating income is also affected by expenses related
to the relocation of the head office. This resulted in 129.4% of the plan, or a plus of JPY520 million difference
from the plan, even though the previous period was not achieved.

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We report on the adjusted disclosure difference of Operating income. Operating income was JPY2.32 billion,
an increase of another JPY520 million from the revised plan. The Golf and Street Divisions continue to perform
well. Although operating profit was disclosed as revised to JPY1.8 billion, we were able to fell short of plans
SG&A expenses in H2 by controlling advertising and reduce relocation expenses.

This is a comparison of operating profit with the previous year. As shown in the graph, excluding special
factors, profitability is improving by 330 million yen from the previous fiscal year.

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3Here are items that impacted net income.
Adding an unplanned foreign exchange gain of JPY470 million related to dollar-denominated assets ofoverseas subsidiaries, and dividend income, real estate income, and other non-operating income of JPY1.52
billion, ordinary income came to JPY3.85 billion.
After adding extraordinary gains and losses, including an impairment loss of JPY1.75 billion and a gain on saleof investment securities of JPY880 million, as well as income taxes-deferred, net income was JPY3.06 billion
and the profit margin was 2%.

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4Sales by channel.
Real stores such as department stores total recovered to 116.1% of the previous year's level, plus-JPY12.02
billion.
The recovery of sales at major department stores has been outstanding, and the market is gaining momentum
due to the recovery of inbound demand.
Our brands are also supported, and as the next step, we would like to aggressively open new stores in for ourstrong business.
Compared to the previous year, department stores accounted performed at 141.5%, fashion buildings andstreet stores at 110.4%, overseas at 116.3%, and domestic EC at 98.9%.

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EC Sales Results.
EC sales stagnated in H1. The sales ratio was 99.6%, the same as the previous year, but it recovered to 102%
YoY in H2.
The graph of our own EC on the right side. In terms of our own EC, we had a bit of a tough time in H1 due tothe erratic delivery delays. In H2, we achieved V-shaped recovery through OMO measures centered on SNS,as well as by expanding product contents and [website] contents, and the current Q4 is in good shape at
107.9% over the previous year.
As for third party EC, we have curbed discounting and strengthened exclusive products, resulting in a grossprofit margin much higher than sales, plus7.6%, which is a significant improvement in profitability and apositive contribution to the achievement of the Company-wide operating profit plan.
Going forward, we would like to make of expanding sales while maintaining profitability.

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6Trends by channel.
New mechanisms across channels are generating synergies. Our target is to link our real store business andEC business by connecting them to our customers. As you can see, Momoko Ueda, a professional golfer,became a store manager for a day, and she had customer service experienced.
In addition, we believe that by holding new events at the store, including having leather product professionals
and others to the events, and transmitting these events as web contents, and then attracting new EC
customers to visit stores, we have been able to create a great deal of synergy and interlocking effects.
We also believe that this will be a major pillar of our measures that will lead to the next step.

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7Here is an individual overview of the main brands. The top 10 brands in sales are listed. Six brands are making
strides with double-digit growth. Sales are driven by the strong performance and recovery of large brands.
(Details are described in the supplementary material of the briefing materials)
Notable among them is “HUF”. Sales growth is accelerating at 146% compared to the previous quarter, due
to the strong performance of the brand and the expansion of the number of stores. Also, since it is the 20th
anniversary, the sales ended well both domestically and internationally [in] H1.
“human woman” was 142.7% of the previous year's level. Although the content slowed down at one point
and there were many challenges, the results of the ongoing transmission and OMO measures were evident,
and products have been improved and rejuvenated, and those efforts have resulted in an increase incustomers. Along with the recovery of department stores, real store sales are expanding and EC is also
expanding.
The pending “NANO universe” has not yet caught up with its budget and goals, but the team reorganizationis going quite well here as well, and we are hopeful that this will be another profitable contribution to thenext phase.

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8This is about the balance sheet.
Inventories are visibly inflated, at 131.8%, or plus-JPY5.9 billion, compared to 110% of sales in the previous
year. However, spring items are moving very quickly in March, with long sleeves and spring items being
digested quickly, including coats. They are still moving at this time of year even before Golden Week, so weare anticipating that the number gets into a slim shape to some extent.
Treasury stock amounted to JPY2.32 billion for the full year as part of the implementation of capital policy andshareholder return measures. Due to the cancellation of treasury stock 2.95 billion yen at the end of the termin January 2023, it is a decrease of 630 million yen from the fiscal year ending February 2022.
The equity ratio has remained high at 72.7%, and we intend to use this ratio systematically for M&A as a newinvestment and for our own store openings.

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9Since last year, four domains have been established in the mid-term plan of TIP25 and organized as four
divisions. Let me tell you a little about the current situation of the four divisions.

The Wellness and Lifestyle Division will create an attractive community, elevating itself from an apparel brandto a community brand. Net sales were JPY47.5 billion, growing 116.5% from the previous year.
First, a new TV commercial was aired in February. Regarding leading brands, TSI's recognition has increased
by about 6.7% of points and “PEARLY GATES” favorability has increased by 7 points. Thankfully, stock prices
have moved in tandem together, which I think is a remarkable sign.
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“PEARLY GATES” also provides uniforms to NO EXCUSE, a wheelchair basketball team, as a contribution tosocial welfare. In addition, “and wander” is offering a new buying experience. We have started a rental service
so that customers can easily experience their hardware and goods. This contributes to customers visiting ourstores, [and] also being linked to our EC site.

Street and Culture. This division proposes an American lifestyle and American casual with the keyword “play.”
It is a platform for fun, rooted in the spirit of the street. Net sales were JPY58.62 billion, or 104.5% of theprevious year's level.
“Schott” is a historic brand that started in 1913 and is celebrating its 110th anniversary this year. The brandis becoming very popular as a leather brand, not only its US-made Schott models, but also licensed productsof Japanese standard which is adapted to Japanese people, including the balance of sizes and new trend sizes.
Other driving goods are also very popular, and the Schott Grand Store TOKYO in Jinnan has created where
customers come to the store even though it is located in an area tucked [away] from train stations.
“BAIT”, also located in Shibuya, is a character and culture store from the US. BAIT, a culture store offers a mix
of fashion, sneakers, anime, comics, and manga, attracts many customers because it is a fusion of fashion andculture. We see a 159% increase over the previous quarter, a significant leap forward.
In particular, Shibuya PARCO's high affinity with art and culture has brought back even more internationalcustomers and inbound visitors. We believe that this will become a new base for sending out information, as
it is extremely active, with many young customer coming and even restricting admission in some places.

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Fashion Capital Division. We have been providing services that respond to trends and changes. Many mainstay
women's brands are in this division. We would like to build the culture with our customers that has flexibility
to keep changing in a lighthearted manner. Net sales were JPY34.03 billion, 115.1% of the previous year's level.
“LE PHIL” is debuted in spring/summer 2019 and is expanding sales mainly through EC. For CAGR, one has alarge jump to plus-106.5%, or 192.4% YoY. Customers are bringing in new customers, and we have highexpectations for this growth, which is greater than we had imagined.
“ADORE”, which proposes 360-degrees of beauty, and ballet dancer Mizuka Ueno, who is an expression of
beauty, are creating synergy through a combination of new approaches by collaborating together. Tailoringand silhouette are ADORE's hallmarks. By adding materiality into those hallmarks, we believe that our new
efforts, such as collaborations with the ballet dancer, have been well received by customers.

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12Digital Generation Division. We develop contents that will capture the ever-expanding next generation. Sales
were JPY12.57 billion, 106% of the previous year's level.
“hueLe Museum” has now started as a firmly established directly managed store, starting with a pop-up at
GINZA SIX. hueLe Museum is intensifying live-streaming emphasis and is actively using influencers andpersonal stylists, and we believe this will make it very effective in linking with our directly managed stores.
“STUMBLY”, one of the brands we carry, has implemented OMO measures and introduced a virtual try-onfunction on a trial basis. By doing so, we hope to express the size according to the set body shape. The data isshown on the right side so that you can compare the 3D data with the actual item in the photo.
The next is about a limited-time store opening of “CHAROL”. HINANO, a popular influencer, will serve as
creative director. Launched last year as a debut for the fall/winter 2022 season, the brand has been mainly
online and has opened a limited-time store in Lumine Shinjuku.
We are looking to expand brand awareness and create connections with new customers.

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Next, I would like to talk about the consolidated financial plan for the full year. The profit-and-loss plan. Net
sales are projected at JPY162 billion, or 104.9% of the previous year's level. SG&A expenses will increase inline with sales growth, but the composition of SG&A expenses is expected to decrease by 0.4% with the effectof the head office relocation and other factors. Operating profit is projected at JPY4.7 billion, 201.8% of theprevious year's level, and net income is at JPY3.5 billion.

This is about the operating profit difference in the profit and loss plan. We worked to reduce employment
subsidies received in various ways, relocation expenses, and office rent from the actual JPY2.32 billion for the
fiscal year ending February 2023. We are expanding sales through business growth and plan to improving
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gross profit margins by reviewing sales plans for manufacturing and sales. Within that breakdown, the planfor the fiscal year ending February 2024 will be set at JPY4.7 billion.
The table below shows the growth range for the current fiscal year. We will carry out each of these initiatives
to further increase profitability. We will work on optimizing costs. We would like to focus on internal SG&A
expenses that we have been incurring. In addition, inventory is basically a bit inflated, but we are taking steps
to optimize inventory by narrowing down orders so that we can accurately sell products each season.
As for business growth and business efficiency, we would like to include both new store openings as well as
EC expansion.

Shareholder returns.
The dividend amount for the fiscal year ending February 28, 2023, previously forecasted at JPY7 per share,
has been dividend increase to JPY10 per share.
In addition, the dividend forecast in fiscal year ending February 2024 is JPY15, plus-JPY5, taking into accountthe overall performance and business environment for the current fiscal year.

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15Here is the progress of the contents of TIP25 and TSI Innovation Program.

We are working with Alibaba Cloud and JP Games on a joint metaverse project. We are participating in the
metaverse area to realize new brand experience offerings. We have created a 3D video that we would like
you to watch.

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We continue to strengthen our entertainment content. We want to create play, experience, and empathy as
a new form of value provision.
As for X Games, on the left, the second X Games competition will be held on May 12, May 13, and May 14. I
am looking forward to being a sponsor again this year.
Also, NBB WEEKEND offered a virtual runway, which means that by holding up a smartphone to the in-store
posters, a virtual runway appears. I was able to check the coordination from various angles. I would like topropose more and more of these things.
The photo on the right shows a live event that customers can participate in in real-time. We are now able todeliver 3D design simulations and listen to customer feedback as we commercialize our products. This is oneof the examples where we can use digital technology to create something very fun and original, while picking
up the voice of the customer, including in manufacturing.

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We have relocated our headquarters since the last September and created one large showroom. This has
enabled us to conduct an attractive transmission of our brand x free space.
We have established an event space on the first floor of our headquarters, where we are creating acomprehensive new venue for experiences, such as transmitting our brand, various live experiences such as
collaborations, and holding exhibitions incorporating digital content.
We would like to consider ways of communicating this kind of information in the future so that it can beshared with everyone.

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We are experimenting with new ways of working. We share a space where employees can communicate witheach other and make new plans, regardless of their length or breadth, based on a design that creates businesssynergies and can be used by everyone.
In addition, we have started study sessions with each other to see if we can create a team structure thatgenerates empathy and enthusiasm among customers by bringing together the design team, technical team,and sales floor team, for example, which have not shared information with each other along a vertical axis
until now, into one horizontal axis.
Specifically, we will mix brands that have been working separately, such as JILL STUART and JILL by JILL STUART,
as the ONE JILL project, and combine them into a single team. We are making a team of people working
together to create products, including concepts, in depth. As for the ONE JILL team, we call it With JILL STUART
or WJ, and it started as a digital generation team.

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19This is the development of materials that reduce environmental impact. This is the story of how TSI will start
producing original organic cotton. The cotton harvest has and the yarn will arrive in Japan in April. With this,
we would like to test fabric, weave, and make samples of our products. We will continue to expand this, andwe will further develop the joint development with SynCom Agritech so that we can expand organic cotton
together.

Sustainability initiatives in line with the nine materiality. It is divided into three major categories: global
environment, society, and people.

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First, we agree with the TCFD's recommendations regarding the global environment, and we are disclosing
this information. In the area of material innovation, we are beginning to try to convert our inventory into
textiles and materials through initiatives with Seni-Ikueikai, or the Textile Scholarship Association, such as thecotton mentioned earlier and the pineapple fiber with Food Reborn.
As for society, we have signed a comprehensive partnership agreement with the town of Kamikawa in
Hokkaido and have made donations related to the corporate version of Furusato, or hometown taxation
through the local development support taxation system. We would also like to experience and try to work to
improve the local environment. We have also established a Group Human Rights Policy and intend to makefirm progress on diversity, employee happiness, health and safety, and fair labor.
As a Company, under the supervision of the Board of Directors, I would like to establish a Sustainability
Committee as an advisory body to further examine and promote the contents as well.

Last but not least, as a fashion entertainment creation company, we are committed to our purpose: "To Create
global empathy and social value with the power of fashion entertainment.” We would like to grow ourcompany more and more and develop it in a fun and energetic way based on the purpose.
By dividing the Company into four domains, or divisions, we will re-evaluate what each role should be, andwill further develop these roles to make them more unique.
We would like to further develop our corporate management in such a way that our brands will shine with
their own value. We would appreciate your continuous support.
Thank you very much.

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______________
Document Notes
1.
2.
3.
4.

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TollfreePortions of the document where the audio is unclear are marked with [Inaudible].
Portions of the document where the audio is obscured by technical difficulty are marked with [TD].
Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides ananswer from the Company, or [M] neither asks nor answers a question.
This document has been translated by SCRIPTS Asia.

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