Summary of Consolidated Financial Results
for the Second Quarter of the Fiscal Year Ending February 28, 2022
(Six Months Ended August 31, 2021)[Japanese GAAP]
September 30, 2021

Company name: Adastria Co., Ltd.
Stock code:
2685
Representative: Michio Fukuda, Chairman of the Board
Itsuo Iwakoshi, Senior Vice President,
Contact:
Head of Corporate Planning Office
Scheduled date of filing of Quarterly Report:
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results:
Holding of quarterly financial results meeting:

Listing: TSE 1st section
URL: https://www.adastria.co.jp

Tel: +81-3-5466-2060
October 15, 2021
October 21, 2021
Yes
Yes (for investors)

Note: The original disclosure in Japanese was released on September 30, 2021 at 15:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending February 28, 2022
(March 1, 2021 – August 31, 2021)(1) Consolidated results of operations (cumulative)
Net sales
Million yen

Six months ended Aug. 31, 2021
Six months ended Aug. 31, 2020
Note: Comprehensive income(Percentages represent year-on-year changes)
Net income
Ordinary profit
attributable to ownersof the parent

Operating profit%

Million yen%

Million yen

92,611
16.3
631
1,552
79,664 (26.9)(4,410)(2,730)Six months ended Aug. 31, 2021:
625 million yen (-%)
Six months ended Aug. 31, 2020: (2,543) million yen (-%)
Net income per share

Diluted net income per share

Yen

Yen

Six months ended Aug. 31, 2021
Six months ended Aug. 31, 2020

9.93
(52.21)%Million yen

-

%

448
(2,461)--(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of Aug. 31, 2021
84,841
As of Feb. 28, 2021
95,449Reference: Shareholders’ equity As of Aug. 31, 2021: 50,468 million yen

50,46850,701
As of Feb. 28, 2021: 50,701 million yen

59.5
53.1

2. Dividends
1Q-end2Q-endDividend per share
3Q-endYear-end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended Feb. 28, 2021
15.00
Fiscal year ending Feb. 28, 2022
25.00
Fiscal year ending Feb. 28, 2022 (forecast)
Note: Revision to the most recently announced dividend forecast: None

-

25.00

40.00

-

25.00

50.00

3. Consolidated Forecast for the Fiscal Year Ending February 28, 2022 (March 1, 2021 – February 28, 2022)
Net sales
Million yen

Operating profit%

Million yen%

Ordinary profit
Million yen

Full year
219,000
19.1
6,500
747.7
6,500
Note: Revision to the most recently announced consolidated forecast: None

(Percentages represent year-on-year changes)
Net income attributable Net income per
to owners of the parent
share

%

118.0

Million yen

3,800

%

Yen

-

84.14

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): Yes
Newly added: -Excluded: 1 (Adastria Korea Co., Ltd.)(2) Application of special accounting methods for presenting quarterly consolidated financial state ments: None
(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(4) Number of outstanding shares (common stock)1) Number of shares outstanding at the end of the period (including treasury shares)
As of Aug. 31, 2021:
48,800,000 shares
As of Feb. 28, 2021:

48,800,000 shares

2) Number of treasury shares at the end of the period
As of Aug. 31, 2021:
3,552,079 shares

As of Feb. 28, 2021:

3,639,505 shares

3) Average number of shares outstanding during the period
Six months ended Aug. 31, 2021:
45,212,230 shares

Six months ended Aug. 31, 2020:

47,144,688 shares

Note 1: The current quarterly financial report is not subject to quarterly review procedures by certified public accountants or
auditing firms.
Note 2: Cautionary statement with respect to forward-looking statements
Forward-looking statements in this report are based on currently available information and certain assumptions judged to bereasonable. Actual results may differ significantly from these forecasts for a number of factors. Please refer to the se ction “1.
Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecast andOther Forward-looking Statements” on page 3 regarding preconditions or other related matters for the forecast shown abov e.

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2022 Fiscal Year

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statements of Income and Comprehensive Income

6(3) Quarterly Consolidated Statement of Cash Flows

8(4) Notes to Quarterly Consolidated Financial Statements

9

Going Concern Assumption

9

Significant Changes in Shareholders’ Equity

9

3. Supplementary Information

10(1) Sales for Brands and Regions

10(2) Sales for Merchandise Categories

10(3) Number of Stores

11

- 1 -

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2022 Fiscal Year

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
Consolidated results(Million yen)First six months of FY2/21
First six months of FY2/22(Mar. 1, 2020 – Aug. 31, 2020) (Mar. 1, 2021 – Aug. 31, 2021)

Net sales

79,664

92,611

YoY change(Amount)
12,946

YoY change(%)

Operating profit(4,410)

631

5,042

-

Ordinary profit(2,730)

1,552

4,283

-

Net income attributableto owners of the parent(2,461)

448

2,910

-

16.3

Consolidated net sales in the first half (March 1 – August 31, 2021) increased 16.3% year-on-year to 92,611
million yen, operating profit was 631 million yen (operating loss of 4,410 million yen in the same period of theprevious fiscal year), ordinary profit was 1,552 million yen (ordinary loss of 2,730 million yen in the same
period of the previous fiscal year), and net income attributable to owners of the parent was 448 million yen (netloss of 2,461 million yen in the same period of the previous fiscal year).
First half sales in Japan increased 15.6% year-on-year to 86,673 million yen. In the first quarter, sales reboundedstrongly from the same period a year earlier as the business environment of physical stores improved from theprevious fiscal year. However, sales in the second quarter were marginally lower than the same period a year
earlier as the state of emergency and priority measures were extended to more areas and prolonged to prevent the
spread of COVID-19 infections. In addition, there was no rebound in consumption as wa s seen in the previous
fiscal year and unseasonal weather, including long spells of rain, also affected sales. E -commerce sales increased
steadily, rising 8.3% from the first half of the previous fiscal year. This increase was attributable to continuous
initiatives to strengthen measures for attracting customers on the Adastria e -commerce site. The strong
performance of BUZZWIT Co., Ltd., which sells merchandise exclusively online, also contributed to the growthof e-commerce sales.
Overseas sales increased 26.8% year-on-year to 5,937 million yen. Sales increased 169.3% year-on-year in China
due to the opening of the second niko and … store in Shanghai. Both sales and earnings were up in Hong Kong,
where the impact of the COVID-19 pandemic was not significant. Sales and earnings were also higher in Taiwan
although the Taiwanese economy slowed from May onward due to resurgence of COVID -19 infections. In the
United States, wholesale sales as well as sales at physical stores rose as the U.S. economy recovered a nd thissegment returned to profitability in the second quarter.
We opened 60 stores (including one overseas) and closed 17 stores (including four overseas), resulting in a totalof 1,443 stores (including 65 overseas) at the end of the first half of the fiscal year.
In this environment, we kept inventories and discount sales in check by offering “the right product at the rightprice at the right time.” As a result, the gross profit margin exceeded from one year earlier to 54.8%, an increaseof 1.7 percentage point.
Selling, general and administrative expenses increased 7.4% because there was no reduction or exemption of
store rent as was the case previous fiscal year and stepped-up advertising and sales promotion for raising theawareness of our e-commerce operations. However, there was an operating surplus as the ratio of selling, generaland administrative expenses improved by 4.5 percentage points to 54.1% of sales because of sales growth. In
addition, we recorded as non-operating income subsidies for employment adjustment of 451 million yen
associated with temporary store closings and a subsidy of 269 million yen related to shortened operating hours
caused by COVID-19.
A gain of 81 million yen from the liquidation of the Korean subsidiary was recorded as extraordinary income,and an impairment loss of 179 million yen on stores was recorded as extraordinary loss.

- 2 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2022 Fiscal Year(2) Explanation of Financial Position
1) Balance sheet position
Total assets decreased 10,608 million yen from as of February 28, 2021 to 84,841 million yen as of August 31,
2021. There was an increase of 2,266 million yen in inventories but there were decreases of 12,117 million yen in
cash and deposits and 736 million yen in notes and accounts receivable-trade.
Liabilities decreased 10,374 million yen to 34,373 million yen. There were decreases of 833 million yen inelectronically recorded obligations-operating, 5,552 million yen in accounts payable-other and 3,334 million yen
in income taxes payable.
Net assets decreased 233 million yen to 50,468 million yen. This was mainly due to a decrease of 281 million
yen in treasury shares (increase in net assets), an increase of 204 million yen in foreign currency translation
adjustment and a decrease of 692 million yen in retained earnings.
2) Cash flow position
Cash and cash equivalents (hereinafter “net cash”) as of August 31, 2021 decreased 12,127 million yen from as
of February 28, 2021 to 11,955 million yen.
A summary of cash flows from each activity during the first half of the current fiscal yea r is as follows:
Cash flows from operating activities
Net cash used in operating activities totaled 7,280 million yen (compared with 6,089 million yen used in thesame period of the previous fiscal year). This was mainly due to net income before income taxes of 1,454 million
yen and a decrease in accrued consumption taxes of 4,592 million yen and income taxes paid of 3,077 million
yen.
Cash flows from investing activities
Net cash used in investing activities totaled 3,448 million yen (compared with 4,013 million yen used in the same
period of the previous fiscal year). This was mainly due to the payments of 1,991 million yen for the purchase ofproperty, plant and equipment and 1,443 million yen for the purchase of intangible assets.
Cash flows from financing activities
Net cash used in financing activities totaled 1,593 million yen (compared with 1,889 million yen used in thesame period of the previous fiscal year). This was mainly due to cash dividends paid of 1,1 41 million yen andrepayments of lease obligations of 451 million yen.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
There are no revisions to the consolidated forecast for the current fiscal year that was announced on April 5,
2021.

- 3 -

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2022 Fiscal Year

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Million yen)
Second quarter of FY2/22(As of Aug. 31, 2021)

FY2/21(As of Feb. 28, 2021)
AssetsCurrent assets
Cash and deposits

24,17912,062

Notes and accounts receivable-trade

9,751

9,014

Inventories

15,71817,985

Other

1,995

1,669

Allowance for doubtful accounts

(74)

(68)

51,56940,663

Store interior equipment, net

4,222

4,588

Other, net

10,354

9,948

Total property, plant and equipment

14,577

14,537

113

83

Other

7,179

7,762

Total intangible assets

7,292

7,846

Total current assets
Non-current assets
Property, plant and equipment

Intangible assets
Goodwill

Investments and other assets
Investment securities

260

464

Leasehold and guarantee deposits

15,162

15,091

Other

7,772

7,456

Allowance for doubtful accounts(1,184)(1,216)

Total investments and other assets

22,01021,79543,88044,17895,44984,841

9,548

10,038

Electronically recorded obligations-operating

7,360

6,527

Accounts payable-other

14,0408,487

Income taxes payable

4,151

816

Provision for bonuses

2,170

1,799

Provision for point card certificates

1,285

1,364

Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade

Other provisions

420

431

Other

2,077

1,581

Total current liabilities

41,05531,047

356

230

Other

3,336

3,094

Total non-current liabilities

3,692

3,325

44,747

34,373

Non-current liabilities
Provisions

Total liabilities- 4 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2022 Fiscal Year

(Million yen)
Second quarter of FY2/22(As of Aug. 31, 2021)

FY2/21(As of Feb. 28, 2021)
Net assets
Shareholders’ equity
Share capital

2,660

2,660

Capital surplus

7,213

7,213

Retained earnings

48,47947,787

Treasury shares(7,917)(7,635)

Total shareholders’ equity

50,43550,025

0

2

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

34

5Foreign currency translation adjustment

231

436

Total accumulated other comprehensive income

266

443

Non-controlling interests
Total net assets
Total liabilities and net assets

- 5 -

-

0

50,70150,46895,44984,841

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2022 Fiscal Year

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Six-month Period)First six months of FY2/21(Mar. 1, 2020 – Aug. 31, 2020)(Million yen)First six months of FY2/22(Mar. 1, 2021 – Aug. 31, 2021)

Net sales

79,664

92,611

Cost of sales

37,393

41,833Gross profit

42,271

50,777

Selling, general and administrative expenses

46,68250,146

Operating profit (loss)(4,410)631

Non-operating income
Foreign exchange gains

-

139

117

269

1,620

451

198

199

1,936

1,060

Interest expenses

71

71

Foreign exchange losses

137-

Loss on valuation of derivatives

22

23

Subsidy income
Subsidies for employment adjustment
Other
Total non-operating income
Non-operating expenses

Other

24

44

Total non-operating expenses

255

139

(2,730)

1,552

Gain on liquidation of subsidiaries and associates-

81

Total extraordinary income

-

81

96

179

Ordinary profit (loss)
Extraordinary income

Extraordinary losses
Impairment loss
Total extraordinary losses

96

179

(2,826)

1,454

Income taxes-current

419

598

Income taxes-deferred

(785)

406

Total income taxes

(365)

1,005

Net income (loss)(2,461)

448

Net income (loss) before income taxes

Loss attributable to non-controlling interests
Net income (loss) attributable to owners of the parent

- 6 -

-

(0)

(2,461)448

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2022 Fiscal Year

Quarterly Consolidated Statement of Comprehensive Income(For the Six-month Period)First six months of FY2/21(Mar. 1, 2020 – Aug. 31, 2020)(Million yen)First six months of FY2/22(Mar. 1, 2021 – Aug. 31, 2021)(2,461)

448

Net income (loss)
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

(3)

1

(44)

(28)

Foreign currency translation adjustment

(33)

204

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of
the parent
Comprehensive income attributable tonon-controlling interests

- 7 -

(82)

177

(2,543)625(2,543)

626

-

(0)

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2022 Fiscal Year

(3) Quarterly Consolidated Statement of Cash Flows(Million yen)First six months of FY2/21
First six months of FY2/22(Mar. 1, 2020 – Aug. 31, 2020) (Mar. 1, 2021 – Aug. 31, 2021)
Cash flows from operating activities
Net (loss) income before income taxes(2,826)

1,454

Depreciation

3,352

3,187

Impairment loss

96

179

Amortization of goodwill
Interest and dividend income
Interest expenses
Increase (decrease) in allowance for doubtful accounts

79

29

(34)

(8)

71

71

44

25

Increase (decrease) in provision for bonuses

(35)

(374)

Increase (decrease) in provision for point card certificates

(903)

78

-

(81)

Loss (gain) on liquidation of subsidiaries and associates
Decrease (increase) in trade receivables

107

795

Decrease (increase) in inventories(2)(2,149)

Increase (decrease) in trade payables
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued consumption taxes(4,900)

(421)

(903)

(1,037)962(4,592)Other, net(709)(1,295)

Subtotal(5,601)(4,138)Interest and dividends received
Interest paid
Income taxes paid

4

6

(71)

(71)

(421)

(3,077)(6,089)(7,280)Purchase of property, plant and equipment(2,071)(1,991)

Purchase of intangible assets(1,202)(1,443)

(0)

(201)

(302)

(388)

Net cash provided by (used in) operating activities
Cash flows from investing activities

Purchase of investment securities
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee deposits

656

597

Other, net(1,091)(21)

Net cash provided by (used in) investing activities(4,013)(3,448)(1,192)(1,141)

Cash flows from financing activities
Dividends paid
Purchase of treasury shares
Repayments of lease obligations
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

(0)

(0)

(696)

(451)

(1,889)(1,593)(38)

195

Net increase (decrease) in cash and cash equivalents(12,031)(12,127)

Cash and cash equivalents at beginning of period

26,37724,082

Cash and cash equivalents at end of period

14,345

11,955- 8 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2022 Fiscal Year

(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.

- 9 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2022 Fiscal Year

3. Supplementary Information(1) Sales for Brands and Regions
Brand / region

First six months of FY2/22
Sales (million yen)

YoY change (%)

Composition (%)

GLOBAL WORK

17,10918.5

18.6

niko and ...

12,487

13.5

10.7

STUDIO CLIP

9,449

10.2

10.3

LOWRYS FARM

9,137

9.9

6.1

LEPSIM

5,679

6.1

15.2

JEANASIS

4,616

5.0

18.0

BAYFLOW

4,270

4.6

12.9

RAGEBLUE

2,504

2.7

12.4

Others13,235

14.3

21.8

Total (Adastria)

78,491

84.8

14.4

BUZZWIT Co., Ltd.

3,371

3.6

22.3

ELEMENT RULE Co., Ltd.

4,582

5.0

30.1

228

0.2

129.7

86,673

93.6

15.6

1,302

1.4

6.5

China

1,118

1.2

169.3

Taiwan

1,234

1.3

5.6

USA

2,282

2.5

49.2

Total (Overseas)

5,937

6.4

26.8

Total (Group)

92,611

100.0

16.3

Other consolidated subsidiaries
Total (Japan)
Hong Kong

Notes:

1. Sales are categorized by using brand operating divisions and geographic regions.
2. The above figures are sales to external customers and do not include internal sales between consolidated
subsidiaries.

(2) Sales for Merchandise Categories
Category

First six months of FY2/22
Sales (million yen)

Composition (%)

YoY change (%)

Men’s apparel (bottoms, tops)

13,417

14.5

24.8

Lady’s apparel (bottoms, tops)

59,100

63.8

18.3

Others

20,09321.7

5.9

92,611

100.0

16.3

Total
Notes:

1. The others category includes additions to the provision for point card certificates and other items.
2. The above figures are sales to external customers and do not include internal sales between consolidated
subsidiaries.

- 10 -

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2022 Fiscal Year

(3) Number of Stores
Number of stores
Brand / region

As of Feb. 28,
2021

First six months of FY2/22

As of Aug. 31,
2021

GLOBAL WORK

209

1

-

(2)

Increase/decrease(1)

niko and ...

144

2

-

-

2

146

STUDIO CLIP

183

3

-

(1)

2

185

LOWRYS FARM

134

4

-

-

4

138

LEPSIM

122

-

-

-

-

122

JEANASIS

72

2

-

-

2

74

BAYFLOW

56

4

-

-

4

60

RAGEBLUE

49

1

-

-

1

50

Others

259

22

-

(2)

20

279

Total (Adastria)

OpenedChangedClosed

208

1,228

39

-

(5)

34

1,262

BUZZWIT Co., Ltd.

14

-

-

(1)

(1)

13

ELEMENT RULE Co., Ltd.

87

15

-

(7)

8

95

Other consolidated
subsidiaries

3

5

-

-

5

8

Total (Japan)

1,332

59

-

(13)

46

1,378

Hong Kong

14

1

-

(2)

(1)

13

China

3

-

-

-

-

3

Taiwan

41

-

-

(1)

(1)

40

USA

10

-

-

(1)

(1)

9

Total (Overseas)

68

1

-

(4)

(3)

65

Total (Group)

1,400

60

-

(17)

43

1,443

Notes:

1. The number of stores is categorized by using brand operating divisions and geographic regions.
2. The number of stores includes e-commerce websites of other companies and e-commerce websites of Adastria.

This financial report is solely a translation of the Company’s Kessan Tanshin (including attachments) in Japanese, which
has been prepared in accordance with accounting principles and practices generally accepted in Japan, for theconvenience of readers who prefer an English translation.

- 11 -