Results Briefing: Q1ST (March to May2022)Results of 2023 Ending Feb.
14th July 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

Reference Data

1

Results Overview

4

Q1ST of Results of 2023 Ending Feb. : Executive summary

COVID-19 movement restrictions were lifted, making people active during the Golden Week for the first time in two years
Real stores recovered sales steadily. Customers returned to ladies brands in department stores and FB, which had both continued to struggle.
They entered a phase of growth again led by ladies brands for which TSI was stepping up its efforts for OMO.
In light of the possibility of its growth rate slowing down, the golf business started with a conservative budget but maintained a rate of growth that far exceeded its forecasts.

There were issues to be addressed in achieving sales growth for the EC businessOn the other hand, the EC business was faced with inventory problems due to lockdowns, and in addition, the challenge was growth potential as major key brands remainedsluggish.
In the second quarter, TSI will restructure the stagnant brands’ system and inventory/supply structure and step up its efforts to increase membership mainly through its EC
operations, thus striving to earn greater sales.

Supply chain disruption occurred in some areas of the United States and Lockdowns in Shanghai from March to May affected TSI’s financial
results
HUF and TACTICS were strong, but the former was delayed delivery date its wholesaling operations while the latter suffered no delivery of spring products.
In terms of logistics in the Shanghai area, the two huge brands, NATURAL BEAUTY BASIC and NANO universe, were troubled by delay in the delivery of popular items.

The head office is scheduled to move in the fall, and costs will increase compared to the previous year.
We are planning to relocate the head office, which is a major event in the company, in September, and this term will cost a lot of temporary expenses.
Among them, we will increase profitability and commit to securing profits.

The new TIP25 reform promotion division was established, accelerating reform
A new division to advance reform was set up. As the first step to invigorate new business domains, TSI entered into an alliance with Sitateru Inc.

TSI aims at medium-term human resource development by stepping up its efforts to train personnel in its organization
A laboratory preparation office was established. It launched a program for developing digital and marketing specialists.

5

Highlights of Results for Q1ST of Results of 2023 Ending Feb.

We achieved the operating income goal for the quarter without fail.
It will focus on implementing measures for powerful sales reforms in the future.
Net sales were 111.4% (105.8% based on the old standards) of the previous term’s level. Operating income was
113.4％ of its budget, exceeding the budget by 190 million yen and achieving the budgetary goal.
The company attained the profit budget thanks to the expansion of strong business domains and the improvement of
earning capabilities. The challenge was delay in sales recovery in the select business domain for youths, and thishindered company-wide sales growth, preventing the company from achieving the sales goals.
Results for the firstquarter

New profit standards

Comparison withbudgets
New profit
standards

Net Sales

38.12

Billion Yen

94.6%

Operating Profit

1.60

Billion Yen

113.4%

Quarterly Net
Income

2.06

Billion Yen

121.4%

YoY change
New profit
standards

Old profit
standards

111.4%

105.8%

70.5%

72.2%

84.9%

84.9%

*)

* The factors for decreasing operating income for the current term compared to the operating income of 2.27 billion yen for the first quarter of the previous term were 300 million
yen (1Q) for accelerated depreciation expenses for the relocation of the head office; 150 million yen for the normalization of funds for performance-linked bonuses; 50 million yen
for expenses for the withdrawal of overseas subsidiaries; 100 million yen for the deterioration of purchasing due to exchange rates; and 200 million yen for a reaction to special
COVID-19 demand in the golf business. Taking these factors into account, We planned 1.41 billion yen as a budgetary goal for operating income during the first quarter.

２

About Business Situation by Channel

7Sale Trends by Channel for Q1ST Results of 2023 Ending Feb.

Sales and profit in store channels steadily recovered. Growth in the EC business remained unsatisfactory, but thecompany aimed at greater investments and further sales growth through aggressive strategy focusing on strong
brands.
Department store and non-department store (along FB streets) sales were 114.9% and 116.8% of the previous term’s level, respectively. Main

Domestic

businesses for ladies entered the phase of recovery. The main factor for struggling overall sales was the poor performance of some brands foryouths and the select business. The company took thoroughgoing measures for recovery.
Old profit standards

Old profit standards

Old profit standards

Old profit standards

New profit standards

Cumulative Q1ST
2021 Ending Feb.

Cumulative Q1ST
2022 Ending Feb.

Cumulative Q1ST
2023 Ending Feb.

Growth by channel

Cumulative Q1ST
2023 Ending Feb.

3.30 Billion Yen

3.79 Billion Yen

Department
1.75 Billion Yen(Composition Rate ：8.1%)
StoresCommercial
Facilities(*1)
E-Commerce

Domestic
Others(*2)
Overseas(*3)

7.03 Billion Yen(Composition Rate ：9.6%)(Composition Rate：10.5%)

14.31 Billion Yen

16.71 Billion Yen(Composition Rate ：32.4%)(Composition Rate ：41.8%)(Composition Rate ：46.2%)

9.18 Billion Yen

9.48 Billion Yen

8.74 Billion Yen(Domestic E-Commerce
ratio：51.1%)(Domestic E-Commerce
ratio：35.0%)（Domestic E-Commerce ratio：29.9%）

2.51 Billion Yen

4.93 Billion Yen(Composition Rate ：11.6%) (Composition Rate ：14.4%)

1.21 Billion Yen

2.19 Billion Yen(Composition Rate ：5.6%) (Composition Rate ：6.4%)

4.14 Billion Yen(Composition Rate ：11.4%)

2.81 Billion Yen(Composition Rate ：7.8%)

compared to year
before last (%)

YoY (%)

216.3

114.9

237.6

116.8

5.44 Billion Yen(Composition Rate：14.3%)

16.75 Billion Yen(Composition Rate ：43.9%)

95.3

92.2

165.2

84.0

9.10 Billion Yen（Domestic E-Commerce ratio：29.1%）

4.00 Billion Yen(Composition Rate ：10.5%)

232.9

128.5

2.81 Billion Yen(Composition Rate ：7.4%)*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.

8Sale Trends by Channel for Q1ST Results of 2023 Ending Feb.

Of the department store and FB businesses, the ladies business continued to recover following the golf business.
Overseas sales also continued to be strong. The business units that worked out plans to acquire new customers using
new marketing devices drove the company’s financial results.
Real store business
Department stores and non-department stores (FB/streetside):
116.4% of the previous term’s level
Following the strong golf business, ladies brands saw sales
recover. Many pop up stores were opened, contributing to theattraction of customers.

➢ 【 PEARLY GATES APOTHECARY POP UP 】

Overseas business
Overseas: Business was affected by supply chain disruption, but it
expanded steadily, posting 232.9% of the level of two years
earlier and 128.5% of the previous year’s level.
➢ TACTICS【 LEARN TO SKATE 】LEARNING CONTENT

9

E-commerce in Q1ST Results of 2023 Ending Feb.

■ Overview of EC sales➢ The nano universe business, the foundation of businesses for youths, was delayed in recovering. The stagnation of the brand over 50% of
which had shifted to EC (The brand's EC budgetary goal achievement rate was 61.7%) had tremendous effects on the sales growth rate of theentire TSI EC business.
➢ The Stüssy EC operation in Japan was returned to the brand’s headquarters in the United States. The absolute amount of the Stüssy
business’s EC sales shrank significantly (310 million yen). On the other hand, the HUF business was at the top of its performance. The
profitability of the HUF business combined with EC offset the adverse effects of the Stüssy EC operation returned to the U.S.
New profit
standards

Old profit standards

Cumulative Cumulative Cumulative compared to
Q1ST 2021 Q1ST 2022 Q1ST 2023 year before
last (%)
Ending Feb. Ending Feb. Ending Feb.

YoY (%)

Cumulative
Q1ST 2023
Ending Feb.

3.89

4.44

4.54

116.9

102.3

4.51

(ratio(％))(42.3)(46.8)(51.9)(＋9.6pt)(＋5.1pt)(49.5)

Domestic
E‐Commerce

9.18

9.48

8.74

95.3

92.2

9.10

(ratio(％)) *1(51.1)(35.0)(29.9)(-21.2pt)(-5.1pt)(29.1)

Overseas
E‐Commerce

0.19

0.86

0.97

504.7

112.9

0.97

(ratio(％)) *2(16.0)(39.4)(34.6)(＋18.7pt)(-4.8pt)(34.6)

9.37

10.35

9.71

103.7

93.9

10.07

(48.9)(35.3)(30.3)(-18.6pt)(-5.0pt)(29.5)

In‐house EC
Unit : Billion yen

E‐Commerce
TOTAL(ratio(％))*1*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.

Lottery
products

Until the deadline

10

E-commerce in Q1ST Results of 2023 Ending Feb.

During the current term, the company gave priority to guiding customers to its own
websites that were highly profitable. It reviewed the role of sluggish 3rd-party websites andaimed at growth through new product strategy. For the time being, it will step up its efforts
to develop services for its own membership and acquire new customers!
•••

The company struggled with domestic EC sales at 92.1% of the previous term’s level and the ratio of brands that had
shifted to EC at 29.9%. (Internal disparities between strong brands and stagnant ones became clear, prompting thecompany to take improvement measures swiftly)
The TSI's own EC ratio was 51.9% (Net sales were 102.1% of the previous term’s level for TSI’s websites and 83.3%
for 3rd-party websites). The company strengthened its own EC, which was highly profitable and acquired customers
with high efficiency. Sales from 3rd-party websites went below those for the previous year because price reductions
were held back. Under these circumstances, the company concentrated on increasing membership at its channels,
gaining 150,000 new members, 125.5% of the previous year’s level.
In the second quarter, the company will strive to increase sales by providing new value to the members acquired in
the first quarter while maintaining stable profitability through reforms of the inventory/supply structure.

Sales trends for TSI’s and 3rd-party websites
75.0%* Excluding NANO universe among thebusinesses whose consolidation into asingle company has been completed

72.9%

65.0%

57.7%
53.2%

55.0%

51.9%

46.8%

45.0%

48.1%

42.3%

Improvement of profitability
Acquisition of customer
information

35.0%

27.1%
25.0%

Ending Feb.
2020年2月期
2020

EndingFeb.
2021年2月期
2021
自社サイト
In-house
EC

Ending Feb.
2022年2月期

Ending Feb.
2023年2月期

2022
3rdサイト3rd-party
3rd
Party

2023

websites

In the future, TSI will consider how
to coexist with 3rd-party EC
websites, further develop its
strategy to raise the recognitionlevel for its brands, and reform its
business structure at a faster paceso that it will further evolve.

３

Brands Overview

12General situation of each brand in Q1ST Results of 2023 Ending Feb.

The key brand businesses performed well.
Sales of seven of the top 10 brand businesses were 121.8% of the previous term’s level, far exceeding
the company average of 111.4%. They are expected to continue to be strong in the second quarter and thesecond half of the year as well.
■ Top 10 strong brands in terms of sales (seven brands)
Unit : Million yen
Internal
sales
ranking

BrandsCumulative Q1ST 2022
Ending Feb.
Sales

Composition
Rate (%)

Cumulative Q1ST
2023 Ending Feb.
Sales

Y/Y

Compared toyear Before lastComposition
Rate (%)

Sales(%)

Sales(%)

1. PEARLY GATES

3,920

11.5

4,603

12.1

117.4

242.2

2. MARGARET HOWELL

2,590

7.6

3,160

8.3

122.0

248.1

3. NATURAL BEAUTY BASIC

2,777

8.1

3,043

8.0

109.6

150.3

5. HUF

1,485

4.3

1,992

5.2

134.2

215.8

6. AVIREX

1,302

3.8

1,453

3.8

111.6

162.9

8. new balance golf

774

2.3

1,158

3.0

149.5

699.1

9. human woman

735

2.1

1,140

3.0

155.1

232.9

Total for strong brands among the top 10(7/10)

13,583

39.7

16,549

43.4

121.8

215.8

TOTAL

34,215100.0

38,122

100.0

111.4

175.8

PEARLY GATES, which ranked second in the previous year in termsof sales, rose to first place.
new balance golf was at the top of its performance, suddenly
expanding its business scale to 700% of the level of two years
earlier.
In general, key top brands remained strong, far exceeding thecompany’s average in terms of sales growth rates (excluding NBB).
NBB struggled to control its supply chain in March and April, but since
the beginning of the second quarter, it has continued to be strong. Its
new strategy Limited Line aimed at rejuvenation was well received by
the market, and the number of new customers acquired is growing.

13

General situation of each brand in Q1ST Results of 2023 Ending Feb.

On the other hand, the NANO business, the largest brand, fell far short of the budgetary goal.
This affected the company’s overall sales growth rate and the EC business. The brand renewal is underway, but TSI
will reform this business by focusing all its strengths on it, and reforms include a review of product pricing, EC
strategy, and a revision of the store sales system.
■ Three of the top 10 brands in terms of sales saw sales go
below those for the previous year
Cumulative Q1ST
2022 Ending Feb.
Internal
sales
ranking

Brands

Sales

Composition
Rate (%)

Cumulative Q1ST 2023
Ending Feb.
Sales

Composition
Rate (%)

Y/Y

Compared toyear Before
lastSales(%)

Sales(%)

4. NANO universe

3,945

11.5

3,013

7.9

76.4

94.5

7. UNDEFEATED *1)

1,283

3.7

1,250

3.3

97.5

127.6

997

2.9

969

2.5

97.2

136.9

Total for sluggish brands among the
top 10 (3/10)

6,225

18.2

5,232

13.7

84.0

106.8

TOTAL

34,215100.0

38,122

100.0

111.4

175.8

10. STUSSY*2)*1) Supply chain disruption occurred in the United States in February, key NIKE products failed
to be delivered in large quantities in March. The budgetary goals were attained except for March.
*2) America’s STUSSY integrated its global EC business. TSI operated only thestore business. Store sales were at the top of their performance, posting 140% of
the previous term’s level.

The NANO business, which stood first in the previous year,
receded to fourth place.
As its rebranding was underway, it failed to achieve its budgetary
goals because its pricing deviated from the needs of 3rd-party
website EC customers. NANO started to reform its business by
putting the company’s managerial resources such as personnel
and capital into it again.

“beats per minute,” the golf line of NANO universe, which
made its debut in the 2022 spring/summer season, was wellreceived by the market as it continued to be strong. Plans callfor pop up stores to be opened at five locations in the autumn
and winter of the current term.

４

Net income and the balance sheet

15

Net Income Impact Items for Q1ST Results of 2023 Ending Feb.

Ordinary income was 2.21 billion yen when non-operating income of 610 million yen, including exchange
gain from loans and deposits in foreign currencies, dividend income, and real estate income, was added.
When 150 million yen, including extraordinary income/loss such as gain on sale of investment securities, loss
on valuation of investment securities, and cooperation money for large facilities as well as income taxesdeferred, was added, net income for the first quarter was 2.06 billion yen, and the profit ratio was 5.4%.

・Exchange gain: 270 million yen
・Dividend income: 120 million yen
・Investment gain on equity method: 90 million yen
・Real estate income: 90 million yen

Unit : Billion Yen

・Gain on sale of investment securities: 100 million yen
・Cooperation money for large facilities: 60 million yen

-0.06

0.17

-0.16

-0.15

0.67
1.60

・Real estate expenses: 20 million yen
・Interest expenses: 20 million yen

Operatingprofit margin
4.2%
OperatingincomeNon-operating
incomeNon-operating
expenses

2.06

・Loss on valuation of investment
securities: 130 million yen
・Impairment loss: 20 million yen

Extraordinary
incomeExtraordinary loss

Net profit
margin5.4%
Income taxes
deferred

Net income attributable toowners of parent

Ordinary Income

Profit Before Taxes

Profit Attributable to Owners of Parent

2.21

2.21

2.06

16

About Balance Sheet> Cash and deposits• Year-on-year change
Decrease of 5.1 billion yen
The major reason is to repay long-termborrowings.

We made active investments in the four business domains identified in themedium-term management plan. It put managerial resources into them byidentifying market trends and the effectiveness of its strategy and prioritizing the
growth potential and efficiency of its businesses.
Cumulative Q1ST 2022
Ending Feb.

Results
Current Assets

Composition
Rate (%)

Unit:Million Yen

FY Ending Feb. 2022

Results

Composition
Rate (%)

Cumulative Q1ST 2023 Ending Feb.

Results

Composition

Y/Y

Rate (%)

ChangeY/Y (%)

Q1/Q4

Q1/Q4 (%)

Change76,43051.5

75,54753.5

75,935

54.1

-495

99.4

388

100.5

(of Cash and Deposits)

42,81628.9

39,25827.8

37,65826.8-5,15888.0-1,60095.9(of which, Inventory)

18,792

12.7

18,725

13.3

19,985

14.2

1,193

106.3

1,260

106.7

71,89948.5

64,89345.9

64,54845.9-7,351

89.8

-345

99.5

(of Investment Securities)

29,43919.8

28,39720.1

27,99419.9-1,445

95.1

-403

98.6

(of Investment Real estate)

4,973

3.4

4,735

3.4

4,728

3.4

-245

95.1

-7

99.9

148,329100.0

141,253

100.0

140,483

100.0-7,846

94.7

43

99.5

28,35619.1

28,37520.1

27,798

19.8

-558

98.0

-577

98.0

(of Short-term borrowings)

1,530

1.0

114

0.1

108

0.1

-1,422

7.1

-6

94.7

(of Current portion of long-term borrowings)

8,699

5.9

6,212

4.4

5,537

3.9

-3,162

63.7

-675

89.1

19,62413.2

14,32910.1

13,4599.6-6,165

68.6

-870

93.9

14,389

9.7

9,803

6.9

8,784

6.3

-5,60561.0-1,01989.6

Total Liabilities

47,981

32.3

42,70430.2

41,25729.4-6,72386.0-1,447

96.6

Total Net Assets

100,348

67.7

97,73669.2

99,22570.6-1,123

98.9

1,489

101.5

Treasury stock(-)-3,726-2.5-3,668-2.6-4,269

-3.0

-543

114.6

-601

116.4

Total Liabilities and Net Assets

148,329100.0

141,253

100.0

140,483

100.0-7,846

94.7

-770

99.5

Non-current Assets

Total Assets
Current Liabilities

Non-current Liabilities(of Long-term borrowings)> Inventory assets• Year-on-year change
Loss of sales opportunities due to theeffects of delayed delivery
Increase in inventories of 6.4% or 1.1
billion yen> Treasury stock
Difference from the previous time
As part of the capital policy it
implemented and its measure for
returning profit to shareholders, thecompany acquired its own shares,
increasing the number of such shares by
600 million yen.
> Equity ratio• The equity ratio is kept high, at 70.3%.

17Profit and Loss Plan for FY Ending Feb. 2023
The company achieved the budgetary goals for the first quarter. It aims at further increasing thesales growth rate.
Prospects of consolidated financial results for the second quarter of the term ending February
2023 (cumulative) and for the whole year are the same as those published on April 13, 2022.
* Plans call for the head office to be relocated in September 2022. The company is considering accelerating the depreciation of head office relocation expenses andremaining rents. With sales expected to go below the previous year’s level, it plans to prepare a deficit budget for the first half of the term ending February 2023.

Unit : Billion yen

1ST Half 2023 Ending Feb.

2ND Half 2023 Ending Feb.

Plan for FY Ending Feb. 2023

Net Sales

76.47

80.88

157.35(YoY：118.1%)(YoY：106.9%)(YoY：112.1%)

-0.98

2.48

(Profit margin ：-%)

(Profit margin ：3.1%)

1.50(Profit margin：1.0%)

-0.52

2.92

(Profit margin ：-%)

(Profit margin ：3.6%)

2.40(Profit margin：1.5%)

-0.24

1.74

1.50

Operating
IncomeOrdinary
IncomeCurrent Net
Income(Profit margin ：-%)

(Profit margin ：2.2%)(Profit margin：1.0%)５Initiatives 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

Hence, to leap toward 2025, we have updated TIP24,
to turn it into the TSI Innovation Program 2025 (TIP25).

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

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 Native 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

Wellness & LifestyleCreating attractive communities
Sublimating apparel brands into community brands
Developing entertainment business closely linked to lifestyles

Net sales¥11.34 billion

YoY change

121.1％NBB WEEKEND makes its debut
11,343

31.2%
Ratio tototal sales

The ladies sports wear
brand made its debut. The
brand is offered to women
who enjoy various sports
opportunities such as golf,
fitness, and running.

The first “MH MARKET” held

and wander HIKING CLUBIn May, a market was held
where delicious things fromour colleagues who support
the operation of Margaret
Howell Café were gathered.

“and wander” is engaged in
activities to provide
opportunities of enjoying
mountaineering andcommuning with nature
through Hiking Club events.
The next activity is schedule
for July 21.

22Street & 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,

Providing value that can only be offered by UNION

and offering new experiences.

Net sales

13,040YoY change

35.8%¥13.04 billion

101.9％

Ratio tototal sales

AVIREX collaborated with and Top Gun: Maverick

NIKE DUNK LOW RETRO SE “BARBER SHOP” X UNION TOKYO
7.0

AVIREX, which supervised
costume design for the movie“Top Gun,” sells items from thespecial collaboration with Top
Gun: Maverick at its own storesnationwide and online.

Collaborations with sneaker brands Net sales
for the first quartersuch as Nike and Converse that can
only be made possible by UNION
are popular, contributing to far
Sales are 612.9% of theprevious year’s levelexceeding the largest-ever sales.
UNION plans to open its second
store, in Osaka, this autumn.

¥ 0.62 Billion

6.0

5.0

4.0

3.0

2.0

1.0

0.0

Feb 2020 term Feb 2021 term Feb 2022 term Feb 2023 term

2020.2期 2021.2期 2022.2期 2023.2期

Street & Culture

23

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, and offering new experiences.

Expansion of the HUF brand’s fan base
HUF continued to open new stores despite the spread of the COVID-19
pandemic, and as of the end of May 2022, it had 22 outlets nationwide. The
number of fans of the brand increased as it strove to raise the brand’srecognition level and introduced collaboration items continuously. In particular,
EC sales growth has been remarkable, and the brand achieved 270.5% of theprevious year’s level in terms of EC sales and 254.9% in terms of overallsales.

Domestic net sales for the firstquarter
22
17

10.0
9.0

18
20
¥ 0.86 Billion

8.0

254.9% of the15
previous year’slevel in net sales
10

7.0
6.0
5.0

8

▲ HUF X MARVEL

4.0
3.0

5

270.5% of the previous
year’s level in EC sales

2.0
1.0

0

0.0

Feb
2020 term Feb
2021 term Feb
2022 term Feb
2023 term
2020.2期
2021.2期
2022.2期
2023.2期

EC売上高
EC
sales

店舗数
Number of stores▲ HUF X THRASHER

Offering new value withskateboarding as its starting pointIn April 2022, “X Games,” an international competition ofaction sports, was held in Japan for the first time.
HUF participated in this competition as a silver sponsor.
It collaborated with the organizers in wear provided toathletes and staff members as their uniforms, and in
addition, it supported the event through official goods
sold at the event site.

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 happinessNet sales¥8.14 billion

YoY change

124.7％

8,148

22.4%
Ratio tototal sales

EC sales are also strong in conjunction withthe recovery of sales at real stores
The six brands managed by Arpege Co., Ltd. are performing well.

Year-on-year change in net sales
Real store sales: 158.8%
EC store sales: 110.4%

A new 2022 Spring collection was
unveiled using Ms. Erika Ikuta, aformer member of Nogizaka 46, as apromotional model.
After the unveiling, the brand had amassive response from customers.
It achieved 123.0% of the previous
term’s level in terms of sales.

As the number of customers visiting real stores declined amidst the
spread of the COVID-19 pandemic, these brands focused oncommunicating information through social media and placedemphasis on their connections with customers. They are continuing
to grow steadily by sending customers from EC to real stores andvice versa.

”Arpege story,” which is
performing particularly well,achieved 284.8% of theprevious year’s level in termsof sales.
It will open new stores in new
areas and commercial facilities.

25

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
LE PHIL is performing well. During three years since its debut, it has increased
sales by nearly ten times

In the 2019 spring/summer season, LE PHIL made its debut as a luxury brand for
adult women who sought satisfaction one rank above. It has expanded its sales mainly
through EC, and in the current term, too, it continued to be strong, posting 208.8% of
the previous term’s level.
As a brand to be strengthened on a company-wide basis, the company plans to makeaggressive investments in it.
Net sales
for the first quarter

EC売上高
EC
sales

¥ 0.21 Billion

CAGR：
112.3%

47.1%
19.4%

63.1%

51.5%

Feb 2020 term Feb
2021 term Feb
2022 term Feb
2023 term
2020.2期
2021.2期
2022.2期
2023.2期

The current two real stores
are NEWoMan Shinjuku
Store and NEWoMan
Yokohama Store.
As they become better
known, they are expanding
sales as are EC sales.

They are considering
opening new stores actively
mainly in the three majorurban areas in the future.

26

Digital Native Generation

Continuously expanding content to win over the next
generation of customers
Obtaining a favorable response and generating strong
excitement through tangible and intangible content
that expands infinitely

Net sales¥3.88 billion

3,880

YoY change

104.9％ETRÉ TOKYO 5th ANNIVERSARY

10.7%

In commemoration of its fifth anniversary,
this brand revived its past popular items
and carried out various campaigns togive away presents.

Ratio tototal sales
In commemoration of the fifth
anniversary, É BY ETRÉ TOKYO, thehome line, made its debut.

“ROSE BUD” x ”FASHION DANCE NIGHT 2022”“hueLe Museum art Labo”“Fashion Dance Night,” an event toexpress the worldview of various
brands through dancing, took place.
ROSE BUD featured a short blouson,
this year’s trend, with duck patterns topresent a coordinated design andpresented an exotic styling that
reminded one of grunge fashion.

”hueLe Museum art Labo”
opened at GINZA SIX for alimited period of time.
Artworks were exhibited andsold there, and collaboration
items were also offered.

27

Digital Native Generation

TSI concluded a capital and business alliance agreement with Sitateru Inc.
While promoting digitization and F2C trials together, the two companies will restructure their domestic
production networks so that they meet the needs of the times, thus advancing flexible production systems
that enable factories to create business on their own initiative and acquiring new customers.

×
Consumer
propagation

Factory
・Implement F2C trials
・Transfer and spread the Yonezawa Factory’s bestpractices to factories affiliated with Sitateru

propagation
A
area

H

propagationarea

Yonezawa
FactoryG
area

propagation

B

area

propagation

C
area

F
area

D
E

area

propagationarea

propagation

3D sample production

Digitize information management and communication
with factories in the workflow of clothing production

propagation

６ Initiatives related to the SDGs

29

Initiatives related to the SDGs

１

Providing humanitarian support to
Ukraine２

As a charitable initiative for humanitarian support to maintain peace, We donated
10 million yen through the Japanese Red Cross Society’s Ukrainian Humanitarian
Crisis Relief. Through the Japanese Red Cross Society and the projects in which it
participated, the company also donated the 2.76 million yen it had gained throughits brand businesses.

あ３ Think Golf
From the viewpoint of starting from what it can do,
Pearly Gates changes whatever parts of various
items that can be changed to recycled fabrics without
spoiling pop and colorful designs, functionality, anddesign quality that are unique to Pearly Gates.

Starting collaboration with Hokkaido’s
Kamikawa Town

In the spring of 2022, We launched a project to breathe new life into old clothes by
upcycling them. Serving as a town to contact for this project, Kamikawa collects
clothes its citizens do not wear any longer, and the project is managed by TSI.
Craftsmen at “ReSew”, a TSI
store dedicated to alterations,reform of old clothes, and new
clothes thus created arepresented to the next generationof youths, including children andgrandchildren. This initiative isbeing carried out on a trial basis.

４ TSUNAGU Project
The Tsunagu Project features the recycling of old
clothes into new clothes.

５ Together with Earth held
TSI implemented its first collaboration campaign withWorld Co., Ltd. at Daimaru and Matsuzakaya
department stores nationwide (at 92 outlets in nine
department stores). In addition to unveiling productsthat used sustainable materials, it carried out acampaign to take back old clothing.

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

A company creating fashion entertainment

７

Reference Data

32

Highlights of Q1 Results for FY Ending Feb. 2023
Unit:Million Yen

Overview

Cumulative Q1ST 2022
Ending Feb. *1(Revenue recognition standards)
Results

Composition
Rate (%)

Cumulative Q1ST 2023 Ending※2
Feb. *2
Results

Composition

Y/Y

Rate (%)

ChangeY/Y (%)Net Sales

34,215100.0

38,122

100.0

3,907

111.4

Gross Profit

19,14556.0

22,348

58.6

3,202

116.7

SG&A Expenses

16,872

49.3

20,744

54.4

3,872

122.9

15,95046.6

19,492

51.1

3,542

122.2

Goodwill Amortization

194

0.6

97

0.3

-96

50.3

Depreciation and Amortization

727

2.1

1,154

3.0

426

158.6

Operating Income

2,273

6.6

1,603

4.2

-669

70.5

Ordinary Income

2,578

7.5

2,212

5.8

-366

85.8

Extraordinary Income

514

1.5

170

0.4

-343

33.2

Extraordinary Loss

597

1.7

164

0.4

-433

27.5

Profit Before Taxes

2,495

7.3

2,219

5.8

-276

88.9

Profit Attributable to Owners of Parent

2,431

7.1

2,063

5.4

-367

84.9

EBITDA ※*3

3,195

9.3

2,855

7.5

-339

89.4

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

33

Highlights of Q1 Results for FY Ending Feb. 2023
Unit:Million Yen

Net Sales
Per Channel(Revenue recognition standards)

Cumulative Q1ST 2022

Cumulative Q1ST 2023 Ending Feb. *4

Ending Feb. *3
Results

Composition

Results

Composition(Million yen)

Rate (%)(Million yen)

Rate (%)

Y/Y (%)

Composition Rate
Y/Y Change(pt)Department Stores

3,299

9.6

5,444

14.3

165.0

4.6

Commercial Facilities(*1)

14,311

41.8

16,750

43.9

117.0

2.1

In-house EC

4,442

13.0

4,510

11.8

101.5

-1.2

3rd Party

5,042

14.7

4,595

12.1

91.1

-2.7

E-Commerce

9,484

27.7

9,105

23.9

96.0

-3.8

Others(*2)

4,931

14.4

4,009

10.5

81.3

-3.9

Domestic

32,02793.6

35,310

92.6

110.3

-1.0

862

2.5

974

2.6

112.9

0.0

2,187

6.4

2,811

7.4

128.5

1.0

E-Commerce TOTAL

10,34730.2

10,079

26.4

97.4

-3.8

TOTAL

34,215100.0

38,122

100.0

111.4

-

E-Commerce
Overseas*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.
*4 The new revenue recognition standards are applied to the term ending February 2023.

34

Highlights of Q1 Results for FY Ending Feb. 2023
Unit:Million Yen

Brands Overview*1

Cumulative Q1ST 2022 Ending Feb.

(Revenue recognition standards)

Composition Gross Profit

Sales

Rate (%)

Ratio (%)*2

YoY

Cumulative Q1ST 2023 Ending Feb.

Sales

Composition

Gross Profit

Rate (%)

Ratio (%)

Sales (%)

Gross Profit
Ratio (%)

1.

PEARLY GATES

3,920

11.5

62.4

4,603

12.1

65.6

117.4

+3.2

2.

MARGARET HOWELL

2,590

7.6

65.8

3,160

8.3

68.0

122.0

+2.2

3.

NATURAL BEAUTY BASIC

2,777

8.1

63.3

3,043

8.0

64.5

109.6

+1.3

4.

NANO universe

3,945

11.5

54.7

3,013

7.9

57.4

76.4

+2.6

5.

HUF

1,485

4.3

48.1

1,992

5.2

52.3

134.2

+4.1

6.

AVIREX

1,302

3.8

62.7

1,453

3.8

60.4

111.6

-2.3

7.

UNDEFEATED

1,283

3.7

42.9

1,250

3.3

41.7

97.5

-1.2

8.

new balance golf

774

2.3

62.5

1,158

3.0

58.1

149.5

-4.4

9.

human woman

735

2.1

59.6

1,140

3.0

65.9

155.1

+6.3

10.

STUSSY

997

2.9

68.4

969

2.5

65.6

97.2

-2.8

TOP10

19,811

57.9

59.3

21,784

57.1

61.4

110.0

+2.2

Other Brands

14,32941.9

51.8

16,321

42.8

54.8

113.9

+3.0

Continuing Brands

34,14199.8

55.9

38,106

100.0

58.6

111.6

+2.7

73

0.2

70.1

16

0.0

112.3

22.0

+42.2

34,215

100.0

56.0

38,122

100.0

58.6

111.4

+2.7

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

35

Highlights of Q1 Results for FY Ending Feb. 2023

Domestic Monthly Sales Information
Q1ST 2022 Ending Feb.
All Stores：149.2％
Existing Stores：108.0％

Q1ST 2023 Ending Feb.
All Stores：106.7％
Existing Stores：104.6％

36

Highlights of Q1 Results for FY Ending Feb. 2023

The Number of Stores

ApparelCumulative Q1STFY Ending

Store

Store

Cumulative Q1ST

Y/Y

Q1/Q4

2022 Ending Feb.

Feb. 2022

Open

Close

2023 Ending Feb.

ChangeChangeDomestic

872

805

+16

-10

811

-61

+6

Overseas

49

41

-

-1

40

-9

-1

Total

921

846

+16

-11

851

-70

+5

Res t au ran t

Domestic

9

7

-

-

7

-2

-

Cos met ics

Domestic

32

36

+1

-1

36

+4

-

962

889

+17

-12

894

-68

+5

Total

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.