Consolidated Financial Results
for the Six Months Ended August 31, 2023
[Japanese GAAP]
October 11, 2023
Company name: PAL GROUP Holdings CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 2726
URL: http://www.palgroup.holdings/
Representative: Ryuta Inoue, President and Representative Director
Contact: Yasuyuki Konishi, Executive Officer and General Manager of Finance and Accounting Division
Phone: +81-6-6227-0308
Scheduled date of filing quarterly securities report: October 12, 2023
Scheduled date of commencing dividend payments: —Availability of supplementary briefing material on quarterly financial results: Not available
Schedule of quarterly financial results briefing session: Scheduled (for analysts and institutional investors)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Six Months Ended August 31, 2023 (March 1, 2023 to August 31, 2023)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable toNet sales
Operating profit
Ordinary profit
owners of parent
million yen%million yen%million yen%Six months ended94,145
20.4
10,29935.8
10,384
34.7
August 31, 2023
Six months ended
78,193—7,582 167.1
7,710 176.0
August 31, 2022
(Note) Comprehensive income: Six months ended August 31, 2023: ¥7,004 million [46.0%]
Six months ended August 31, 2022: ¥4,796 million [228.5%]
Basic earnings per
share

Diluted earnings per
shareyenyenmillion yen%

7,001

45.6

4,808

232.8

Six months ended
79.93—
August 31, 2023
Six months ended
54.73—
August 31, 2022
(Note) The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,March 31, 2020) and other standards from the beginning of the three months ended May 31, 2022.
Therefore, the change in net sales for the six months ended August 31, 2022 from the previous
corresponding period is not presented.
(Note) The Company conducted a stock split on September 1, 2023 at a ratio of two shares for one share ofcommon stock. Accordingly, basic earnings per share are calculated assuming that the stock split took
place at the beginning of the fiscal year ended February 28, 2023.
(2) Consolidated Financial Position
Total assets
million yen

Net assets

Equity ratio

million yen%

As of August 31, 2023
117,748
57,404As of February 28,112,510
55,191
2023(Reference) Equity: As of August 31, 2023: ¥57,404 million
As of February 28, 2023: ¥55,182 million

48.8
49.0

2. Dividends
1st quarter-end

Annual dividends
2nd quarter-end 3rd quarter-end

yen

yen

Year-end

yen

Total
yen

yen

Fiscal year ended
—
0.00
—
75.00
75.00
February 28, 2023
Fiscal year ending—
0.00
February 29, 2024
Fiscal year ending
February 29, 2024—30.00
30.00(Forecast)(Note) Revision of dividend forecast: Yes(Note) The Company conducted a stock split on September 1, 2023 at a ratio of two shares for one share ofcommon stock. The actual dividend amount before the stock split is stated for the fiscal year endedFebruary 28, 2023. The year-end dividend forecast for the fiscal year ending February 29, 2024 reflects
the stock split.
3. Consolidated Financial Results Forecast for the Fiscal Year Ending February 29, 2024 (March 1, 2023 toFebruary 29, 2024)(% indicates changes from the previous corresponding period.)
Profit attributable to Basic earnings
Net sales
Operating profit
Ordinary profit
owners of parentper share
million yen%million yen%million yen%million yen%

yen

Full year
184,270 12.0
18,97019.9
19,140 19.2
12,45025.1
142.76(Note) Revision of consolidated financial results forecast: Yes(Note) The Company conducted a stock split on September 1, 2023 at a ratio of two shares for one share ofcommon stock. Accordingly, the forecast of basic earnings per share for the fiscal year ending February
29, 2024 is stated taking into account the impact of the stock split.

* Notes(1) Changes in significant subsidiaries during the period under review: No(2) Adoption of special accounting methods for preparing quarterly consolidated financial statement: No(3) Changes in accounting policies, changes in accounting estimates and corrections of errors
1) Changes in accounting policies due to the revision of accounting standards: No2) Any changes other than 1) above: No
3) Changes in accounting estimates: No4) Corrections of errors: No(4) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
As of August 31, 2023
92,544,000 shares
As of February 28, 2023
92,544,000 shares2) Total number of treasury shares at the end of the period:
As of August 31, 2023
5,720,704 shares
As of February 28, 2023
4,693,828 shares
3) Average number of shares during the period:
Six months ended August 31, 2023
87,593,338 shares
Six months ended August 31, 2022
87,851,262 shares(Note) The Company conducted a stock split on September 1, 2023 at a ratio of two shares for one share ofcommon stock. Accordingly, “total number of issued shares at the end of the period,” “total number oftreasury shares at the end of the period,” and “average number of shares during the period” are calculated
assuming that the stock split took place at the beginning of the fiscal year ended February 28, 2023.
* These quarterly consolidated financial results are not covered by the quarterly review conducted by certified
public accountants or audit corporations.
* Explanation of the proper use of financial results forecast and other notes
The statements regarding financial results forecast in this report are based on the information that is available, aswell as estimates, assumptions and projections that are believed to be reasonable at the time of publication, anddo not guarantee the achievement of the projections. Therefore, there might be cases in which actual results differ
from forecast values.

Appendix
1. Qualitative Information on Consolidated Financial Results for the Period under Review

2(1) Explanation of Operating Results

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Financial Results Forecast and Other Future Projections

3

2. Consolidated Financial Statements

4(1) Consolidated Balance Sheets

4(2) Consolidated Statements of Income and Comprehensive Income

6

3. Additional Information

8(1) Sales Results by Segment (Consolidated)

8(2) Status of Stores (Consolidated)811. Qualitative Information on Consolidated Financial Results for the Period under Review(1) Explanation of Operating Results
During the six months ended August 31, 2023 (March 1, 2023 to August 31, 2023), the Japanese
economy showed a gradual pickup as there were signs of recovery in areas such as personal consumption
and the employment situation due to the relaxation of various regulations including the reclassification of
COVID-19 from Class 2 to Class 5 under the Infectious Diseases Control Law. However, the operating
environment remains difficult for retailers that operate stores, due to the continuing impact of soaring
utility costs and raw material prices caused by prolonged Russia’s invasion of Ukraine and higher prices
due to the depreciation of the Japanese yen, compounded by rising wage costs and delivery costs
resulting from labor shortages.
Under such a business environment, the Company has continued its efforts to strengthen EC sales andonline promotions ever since COVID-19 began spreading. We focus on providing services as well as
creating points of contact and strengthening connections with customers by employing tools such as theofficial app, social networking services (SNS), and e-mail newsletters, aiming for long-term
interchangeable utilization of online and offline channels. The number of our official app members has
exceeded 8.6 million, with 10 million in sight. As influencers, employees of the Company proactively
approach target customers through SNS, attracting more customers to the Company’s EC sites and stores.
The number of followers of individual staff accounts of SNS has surpassed 11.7 million. The flexible
utilization of EC, making full use of not only the Company’s own EC platform PAL CLOSET, but also
ZOZOTOWN, has contributed to boosting sales.
The Company, which is marking its 50th anniversary this year, held its first joint preorder exhibitionof its brands in August, where a variety of events including trying on new products and talk shows wereorganized over two days. To commemorate Disney’s 100th anniversary, 22 brands, ranging from apparelto miscellaneous goods, have been offering a diverse lineup of Disney character designs under the themeof “Disney100” since July.
Both the number of customers visiting and sales at physical stores are rising, as the easing of selfrestraint regulations led to an increase in foot traffic and a turnaround in commercial facilities attracting
customers. We have accelerated new store openings and expanded the size of existing stores with a focus
on 3COINS, which will celebrate next year the 30th anniversary of opening its first store in Chayamachi,Kita-ku, Osaka in April 1994.
In addition, we continued to implement our priority measures that have been in place, including
optimizing inventory and improving gross profit margins through the enforcement of the 4-weekmerchandizing, and optimizing personnel costs and streamlining store operations through efficient shiftscheduling.
Through these measures, net sales in the Apparel Business increased by ¥7,803 million year on yearto ¥57,673 million and net sales in the Miscellaneous Goods/Accessories Business increased by ¥8,113
million year on year to ¥36,375 million.
As a result of the above, net sales for the six months ended August 31, 2023 increased by ¥15,951
million year on year to ¥94,145 million. In terms of profit, operating profit increased by ¥2,717 million
year on year to ¥10,299 million, ordinary profit increased by ¥2,673 million year on year to ¥10,384
million, and profit attributable to owners of parent increased by ¥2,193 million year on year to ¥7,001
million.
2

(2) Explanation of Financial Position(Assets)
Current assets increased by ¥3,603 million compared with the end of the previous fiscal year, due
mainly to increases in notes and accounts receivable - trade by ¥1,773 million and merchandise andfinished goods by ¥1,970 million, despite a decrease in cash and deposits by ¥1,941 million.
Non-current assets increased by ¥1,633 million compared with the end of the previous fiscal year, due
primarily to an increase in buildings and structures by ¥1,031 million.
(Liabilities)
Current liabilities decreased by ¥530 million compared with the end of the previous fiscal year, due
mainly to decreases in current portion of long-term borrowings by ¥3,064 million and income taxes
payable by ¥1,377 million, despite an increase in notes and accounts payable - trade by ¥3,796 million.
Non-current liabilities increased by ¥3,555 million compared with the end of the previous fiscal year,due primarily to increases in long-term borrowings by ¥3,066 million and asset retirement obligations by¥323 million.
(Net assets)
Net assets increased by ¥2,212 million compared with the end of the previous fiscal year, due mainly
to an increase in retained earnings by ¥3,707 million, offset by ¥1,497 million purchase of treasuryshares.
(3) Explanation of Consolidated Financial Results Forecast and Other Future Projections
Given the financial results for the period under review, the Company has revised its earlier financial
results and dividend forecasts announced on April 11, 2023 in the “Consolidated Financial Results for theFiscal Year Ended February 28, 2023.” For details, please refer to “Notice Concerning Revision ofFinancial Results and Dividend Forecasts (available in the original Japanese version only)” released
today.

3

2. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
As of February 28, 2023
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assetsTotal non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Provision for point card certificates
Provisions
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Retirement benefit liability
Provisions
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities

4

As of August 31, 2023

63,8458,554
12,518577
85,496

61,903
10,32814,4892,378
89,099

6,940
2,179
9,120
333

7,972
2,458
10,430337

11,7745,840(54)
17,56027,014
112,510

11,8866,047(54)
17,87928,648
117,748

24,335
250
3,064
4,828
2,602
178
546
7,431
43,23728,132
250
–
3,451
2,772
199
331
7,569
42,706

8,118
1,337
135
3,402
1,088
14,08257,31911,184
1,388
136
3,725
1,202
17,63760,344

(Millions of yen)
As of February 28, 2023
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets

5

As of August 31, 2023

3,181
4,478
49,703(2,174)55,1873,181
4,478
53,410(3,672)
57,397

12(13)
6(2)
6(5)

68
55,191
112,510–
57,404
117,748

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Share of profit of entities accounted for using
equity method
Royalty income
Foreign exchange gains
Subsidy income related to COVID
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commission for purchase of treasury shares
Other
Total non-operating expenses
Ordinary profit
Extraordinary losses
Loss on retirement of non-current assets
Impairment losses
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

6

Six months ended
August 31, 2022
78,19334,523
43,66936,0877,582

Six months ended
August 31, 2023
94,14541,81752,32742,027
10,299

00

61

128

10
3
45
70
191

66–
42
185

47–
15
63
7,710

43
30
26
100
10,384

13
446
459
7,251
2,804(332)
2,471
4,780
(28)
4,808

90
143
233
10,1503,204(46)3,157
6,992(8)7,001

Consolidated Statements of Comprehensive Income(Millions of yen)Six months ended
August 31, 2022
ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net oftax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparent
Comprehensive income attributable to noncontrolling interests

7

Six months ended
August 31, 2023
4,780

6,992

008106(0)

21

16
4,796

127,004

4,825

7,013

(28)

(8)

3. Additional Information(1) Sales Results by Segment (Consolidated)
Six months ended
August 31, 2022
million yen
Apparel Business
49,869Miscellaneous Goods/
28,261
Accessories Business
Other135
Total
78,266Six months ended
August 31, 2023
million yen
57,673

Percent change
year-on-year%
115.6

36,375128.7

170
94,218

125.5
120.4

(2) Status of Stores (Consolidated)

Number of stores as of February 28, 2023

Six months ended
August 31, 2023
927 stores

Number of new stores

48 stores

Number of closed stores

28 stores

Number of stores as of August 31, 2023

947 stores8