Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2024 [J-GAAP]
October 30, 2023
Name of listed company:
Securities code:
Representative:
Contact:

ARTNATURE INC.
Listed on: Tokyo Stock Exchange
7823
URL: https://www.artnature.co.jp/english/index.html
Yoshikata Igarashi, Chairman and President
Hiroaki Inoue, General Manager, Finance & Accounting Division
TEL: +81-3-3379-3334
Senior Corporate Officer
Scheduled date of filing the quarterly financial report:
November 14, 2023
Scheduled date of the start of dividends distribution:
December 1, 2023
Supplementary quarterly materials prepared:
None
Explanation meeting for quarterly financial results:
Yes (for institutional investors and analysts)(Figures shown are rounded down to the nearest million yen.)

1. Consolidated results for the first six months ended September 30, 2023 (April 1, 2023 – September 30, 2023)(Percentage figures show changes from the previous year.)(1) Consolidated operating results
Net sales

Operating income

Millions of yen%
Millions of yen%
Millions of yen
Six months ended
September 30, 2023
21,270(0.1)
1,914(19.3)
1,963
September 30, 2022
21,288
10.1
2,372
51.9
2,374
Note: Comprehensive income:Six months ended September 30, 2023: ¥1,296 million (-12.1%)
Six months ended September 30, 2022: ¥1,474 million (51.1%)

Net income per share
Six months ended
September 30, 2023
September 30, 2022

Net income attributable toowners of the parentcompany

Ordinary income%Millions of yen%

(17.3)
59.2

1,208
1,463

(17.4)
70.7

Diluted net income
per share

YenYen

37.19
45.48

36.71
44.94

(2) Consolidated financial position
Total assets
Net assets
Millions of yen
Millions of yen
As ofSeptember 30, 2023
47,787
26,832
March 31, 2023
47,95625,927(Reference) Equity capital: As of September 30, 2023: ¥26,545 million

Shareholders’ equity ratio

Net assets per share
Yen%

55.5
53.5
As of March 31, 2023: ¥25,662 million

816.12790.26

2. Dividends
First quarter-end

Second quarter-end

Dividends per share
Third quarter-end

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2023―
14.00
Year ending March 31, 2024―
14.00
Year ending March 31, 2024
(forecast)
Note: Revisions to dividend forecasts published most recently: None―

14.00

28.00

―

19.00

33.00

Year-end

Annual

3. Consolidated financial forecast for the fiscal year ending March 31, 2024 (April 1, 2023 – March 31, 2024)(Percentage figures show changes from the previous year.)Net sales
Millions of yen

Operating income%

Millions of yen

Net income
attributable to ownersof the parent company

Ordinary income

Net income
per share%

Millions of yen%

Millions of yen%

Yen

Full year
44,763
3.6
3,743
4.8
Note: Revisions to most recently announced results forecasts: None

3,8218.1

2,140

14.2

65.92

Notes:(1) Significant changes to subsidiaries during the period (Transfers of specific subsidiaries with changes in the scope of consolidation): None
(2) Application of specific accounting methods for preparing the quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates and restatement of revisions
1) Changes in accounting policies due to revision of accounting standards, etc.: None
2) Changes in accounting policies other than 1):None
3) Changes in accounting estimates:None
4) Restatement of revisions:
None(4) Number of outstanding shares (common stock):1) Number of shares issued and outstanding (including treasury shares)
As of September 30, 2023
34,393,200 shares
As of March 31, 2023
34,393,200 shares
2) Number of treasury shares
As of September 30, 2023
1,867,339 shares
As of March 31, 2023
1,919,239 shares
3) Average number of shares issued and outstanding in each period
Six months ended September 30, 2023 32,495,457 shares
Six months ended September 30, 2022 32,182,425 shares*This quarterly kessan tanshin document is outside the scope of audit procedures conducted by certified public
accountants or the independent auditor.

*Explanation of the appropriate use of financial results forecasts; other important items(Cautionary statement regarding forward-looking statements, etc.)
Forward-looking statements in this document, including forecasts, are based on information available at the time of disclosure and on
certain assumptions deemed reasonable by the Company. Actual results may differ materially from forward-looking statements due to anumber of factors. For more information about these assumptions and other conditions that form the basis of these forecasts, please see
page 3 of the supplementary materials, “1. Analysis of operating results and financial position, (3) Qualitative information on consolidated
financial forecasts.”

ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2024
Contents
1. Analysis of operating results and financial position .............................................................................................................. 2(1) Analysis of operating results ................................................................................................................................................. 2(2) Analysis of financial position ............................................................................................................................................... 2(3) Qualitative information on consolidated financial forecasts ................................................................................................. 3
2. Quarterly consolidated financial statements and related notes ............................................................................................ 4(1) Quarterly consolidated balance sheets .................................................................................................................................. 4(2) Quarterly consolidated statements of income and comprehensive income .......................................................................... 6(Quarterly consolidated statements of income) .................................................................................................................... 6(Quarterly consolidated statements of comprehensive income) ........................................................................................... 7(3) Quarterly consolidated statements of cash flows .................................................................................................................. 8(4) Notes on quarterly consolidated financial statements .......................................................................................................... 9(Notes on the going concern assumption) ............................................................................................................................ 9(Notes on significant fluctuation in amounts of shareholders’ equity) ................................................................................. 9–1–

ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2024

1. Analysis of operating results and financial position(1) Analysis of operating results
Operating results for the first six months of fiscal 2024
During the first six months of fiscal 2024 (April-September 2023), the Japanese economy saw a recovery in consumer spending
and inbound tourist demand, given the normalization of economic activities attributable partly to the reclassification of COVID19 in May 2023 under the Infectious Diseases Control Law. However, it continued to face an uncertain situation, partly
reflecting a rise in the cost of living due chiefly to the weakening of the yen and surges in raw material and energy prices.
Against this backdrop, the Group formulated the ARTNATURE Advance Plan, a new medium-term management plan, andbegan to implement it in the current fiscal year. The Group has been leveraging its strengths and tackling a range of issues toenhance its business performances and increase its market share in the haircare industry, while simultaneously promoting its
business activities by expanding businesses acquired in new areas with a view to taking a significant leap for the creation of a
new ARTNATURE capable of opening up the next phase.
As a result, consolidated net sales in the first six months under review decreased 0.1% year on year to ¥21,270 million. In termsof profits, operating income and ordinary income stood at ¥1,914 million (down 19.3% year on year) and ¥1,963 million (down
17.3% year on year), respectively, due to the slight year-on-year decline in net sales and increases in the cost of sales, sales
expenses and general and administrative expenses. Similarly, net income attributable to owners of the parent company cameto ¥1,208 million (down 17.4% year on year).
Business results by segment are as follows.
Men’s business
Sales in the men’s business decreased 0.5% year on year, to ¥11,494 million, chiefly due to a fall in sales to new customers,
despite a year-on-year increase in sales to repeat customers as a result of promotion of customer retention programs, among
other initiatives.
Ladies’ business
Sales in the ladies’ business declined 2.0% year on year, to ¥6,613 million due to a fall in sales to new customers, despite there
was a year-on-year increase in sales to repeat customers, which reflected a rise in the number of customers visiting theCompany’s stores.
Ladies’ ready-made wigs business
Sales in the ladies’ ready-made wigs business rose 17.3% year on year, to ¥2,445 million, chiefly reflecting an increase in thenumber of products sold due to a rise in the number of customers visiting retail facilities in which the Company’s stores arelocated.
(2) Analysis of financial position
1) Assets, liabilities and net assets(Assets)
As of the end of the second quarter, total assets were ¥47,787 million, a decrease of ¥168 million compared with the end of theprevious fiscal year. Current assets decreased ¥311 million, mainly due to a fall in accounts receivable - trade, while noncurrent assets increased ¥142 million.
(Liabilities)
As of the end of the second quarter, liabilities totaled ¥20,954 million, a decrease of ¥1,074 million compared with the end of
the previous fiscal year. This was largely due to a decrease of ¥1,225 million in current liabilities chiefly due to decreases inaccounts payable-other, income taxes payable, advances received, and provision for bonuses.
(Net assets)
As of the end of the second quarter, net assets were ¥26,832 million, an increase of ¥905 million compared with the end of theprevious fiscal year. This largely reflected an increase in retained earnings.

–2–ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 20242) Cash flow position
As of the end of the second quarter, cash and cash equivalents (cash) totaled ¥20,114 million, an increase of ¥32 million
compared with the end of the previous fiscal year. The cash flow position and contributing factors in each section of thestatements of cash flows are as follows.
(Cash flows from operating activities)
Operating activities provided net cash of ¥1,272 million, compared with ¥1,476 million in the same period a year earlier. Cashinflows, including income before income taxes of ¥1,953 million, depreciation of ¥440 million, and a decrease in notes andaccounts receivable-trade of ¥433 million, more than offset cash outflows, including income taxes paid of ¥866 million, and adecrease in advances received of ¥367 million.
(Cash flows from investing activities)
Investing activities used net cash of ¥850 million, compared with ¥999 million in the same period a year earlier. That mainlyreflected purchase of property, plant and equipment of ¥632 million and purchase of intangible assets of ¥117 million.
(Cash flows from financing activities)
Financing activities used net cash of ¥461 million, compared with ¥459 million in the same period a year earlier. That mainlyreflected cash dividends paid of ¥451 million.
(3) Qualitative information on consolidated financial forecasts
Consolidated financial forecasts for the fiscal year ending March 31, 2024 remain the same as those announced on May 12,2023.

–3–ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2024

2. Quarterly consolidated financial statements and related notes(1) Quarterly consolidated balance sheets(Millions of yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Accounts receivable – trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
OthersAllowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Others, net
Total property, plant and equipment
Intangible assets
Goodwill
OthersTotal intangible assets
Investments and other assets
OthersAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets–4–

As of September 30, 2023

20,180
3,044
25
3,379
203
1,364
1,116(4)29,31020,222
2,621
28
3,249
199
1,541
1,140(5)28,999

4,675
4,120
8,795

4,736
4,167
8,904

54
504
558

36
629
665

9,838(547)9,291
18,64547,9569,800(582)
9,218
18,78847,787

ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2024

(Millions of yen)
As of March 31, 2023
Liabilities
Current liabilities
Accounts payable – trade
Accounts payable – other
Income taxes payable
Advances received
Provision for bonuses
Provision for directors’ bonuses
Provision for product warranties
OthersTotal current liabilities
Non-current liabilities
Net defined benefit liability
Asset retirement obligations
OthersTotal non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets–5–

As of September 30, 2023

318
2,205
995
6,184
1,252
145
43
3,403
14,548

306
1,945
717
5,817
1,060
75
44
3,356
13,322

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

4,279
1,566
1,785
7,631
20,954

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

3,667
3,623
20,032(1,048)26,275

1046
124
181
251
12
25,92747,956

12
143
114
270
276
11
26,83247,787

ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2024
(2) Quarterly consolidated statements of income and comprehensive income(Quarterly consolidated statements of income)(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Foreign exchange gains
OthersTotal non-operating income
Non-operating expenses
Provision of allowance for doubtful accounts
Guarantee commission
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Total extraordinary losses
Income before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Net income
Net income (loss) attributable to non-controlling interests
Net income attributable to owners of the parent company–6–

Six months ended
September 30, 2022
21,288
6,792
14,496
12,1232,372

Six months ended
September 30, 2023
21,2706,986
14,284
12,370
1,914

21
69
19
109

24
54
22
101

92
10
4
107
2,374

34
98
52
1,963

――

0
0

0
11
11
2,362
874
22
897
1,465
1
1,463

0
9
9
1,953
600
145
745
1,208
(0)
1,208

ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2024
(Quarterly consolidated statements of comprehensive income)(Millions of yen)

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)
Owners of the parent company
Non-controlling interests–7–

Six months ended
September 30, 2022
1,465

Six months ended
September 30, 2023
1,208(82)
85
6
9
1,474

296(10)
87
1,296

1,474
0

1,297
(1)

ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2024
(3) Quarterly consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Income before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’ bonuses
Increase (decrease) in provision for product warranties
Increase (decrease) in net defined benefit liability
Interest income
Loss on retirement of non-current assets
Loss (gain) on sales of non-current assets
Decrease (increase) in notes and accounts receivable – tradeDecrease (increase) in inventories
Increase (decrease) in notes and accounts payable – trade
Increase (decrease) in advances received
OthersSubtotalInterest income received
Income taxes paid
Subsidies received
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Long-term loan advances
Collection of long-term loans receivable
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee depositsOthers
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of lease obligations
Cash dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period–8–

Six months ended
September 30, 2022

Six months ended
September 30, 2023

2,362
386
1146918(70)3111(21)0―611(509)
307(639)(444)2,25623(805)
1
1,476

1,953
440
91834(192)(70)
199(24)
0(0)
433
4(16)
(367)
(210)
2,112
26(866)―
1,272(747)
―
(77)
(100)
0(79)
57(51)(999)(632)
0(117)―
0(47)20(73)
(850)

(10)
(449)
(459)
76
94
19,452
19,546

(10)
(451)
(461)
71
32
20,082
20,114

ARTNATURE INC. (7823) Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2024
(4) Notes on quarterly consolidated financial statements(Notes on the going concern assumption)
There is no related information.
(Notes on significant fluctuation in amounts of shareholders’ equity)
There is no related information.

–9–