Summary of Consolidated Financial Results
for the First Quarter of the Fiscal Year Ending February 28, 2021
(Three Months Ended May 31, 2020)[Japanese GAAP]
June 30, 2020

Company name: Adastria Co., Ltd.
Listing: TSE 1st section
Stock code:
2685
URL: https://www.adastria.co.jp
Representative: Michio Fukuda, Chairman of the Board
Ryo Araya, Vice President,
Contact:
Deputy Executive General Manager, General Headquarters of Management Tel: +81-3-5466-2050
Scheduled date of filing of Quarterly Report:
July 15, 2020
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting:
None
Note: The original disclosure in Japanese was released on June 30, 2020 at 15:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending February 28, 2021
(March 1, 2020 – May 31, 2020)(1) Consolidated results of operations (cumulative)
Net sales
Million yen

Operating profit%

Million yen%(Percentages represent year-on-year changes)
Net income
Ordinary profit
attributable to ownersof the parent
Million yen

Three months ended May 31, 2020
33,267 (40.9)(4,758)(4,822)Three months ended May 31, 201956,290
9.5
5,221
308.4
5,119
Note: Comprehensive income
Three months ended May 31, 2020: (3,653) million yen (-%)
Three months ended May 31, 2019: 3,372 million yen (-%)

Three months ended May 31, 2020Three months ended May 31, 2019

Net income per share

Diluted net income per share

Yen

Yen

(78.12)
69.41%

Million yen

276.9

%

(3,681)
3,267

-

-

(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of May 31, 2020
93,707
As of Feb. 29, 2020
97,924
Reference: Shareholders’ equity As of May 31, 2020: 52,324 million yen

52,32457,041
As of Feb. 29, 2020: 57,041 million yen

55.8
58.3

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

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended Feb. 29, 2020
25.00
25.00
50.00
Fiscal year ending Feb. 28, 2021
Fiscal year ending Feb. 28, 2021 (forecast)
Note: Revision to the most recently announced dividend forecast: None
The dividends for the fiscal year ending February 28, 2021 are undecided at this time and will be disclosed promptly when
forecasts are announced.

3. Consolidated Forecast for the Fiscal Year Ending February 28, 2021 (March 1, 2020 – February 28, 2021)
Adastria believes that it is not possible to establish a reliable forecast for the fiscal year ending in February 2021 at this time dueto the numerous uncertainties about how the COVID-19 crisis will affect results of operations. An announcement will be made assoon as it becomes possible to determine a forecast.

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
Newly added: -Excluded: -(2) Application of special accounting methods for presenting quarterly consolidated financial statements: 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 May 31, 2020:
48,800,000 shares
As of Feb. 29, 2020:

48,800,000 shares

2) Number of treasury shares at the end of the period
As of May 31, 2020:
1,638,675 shares

As of Feb. 29, 2020:

1,679,557 shares

3) Average number of shares outstanding during the period
Three months ended May 31, 2020: 47,128,104 shares

Three months ended May 31, 2019: 47,070,278 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 section “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 above.

Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2021 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

2(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) Notes to Quarterly Consolidated Financial Statements

8

Going Concern Assumption

8

Significant Changes in Shareholders’ Equity

8

3. Supplementary Information

9(1) Sales for Brands and Regions

9(2) Sales for Merchandise Categories

9(3) Number of Stores

10

- 1 -

Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2021 Fiscal Year

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
Consolidated results(Million yen)First three months of FY2/20(Mar. 1, 2019 – May 31, 2019)

First three months of FY2/21(Mar. 1, 2020 – May 31, 2020)

YoY change(Amount)

YoY change(%)

Net sales

56,29033,267(23,023)(40.9)

Operating profit

5,221(4,758)(9,979)-Ordinary profit

5,119(4,822)(9,942)-

Net income attributableto owners of the parent

3,267(3,681)(6,948)-

Consolidated net sales in the first quarter (March 1 – May 31, 2020) decreased 40.9% year-on-year to 33,267
million yen, operating loss was 4,758 million yen (operating profit of 5,221 million yen in the same period of theprevious fiscal year), ordinary loss was 4,822 million yen (ordinary profit of 5,119 million yen in the same periodof the previous fiscal year), and net loss attributable to owners of the parent was 3,681 million yen (net incomeof 3,267 million yen in the same period of the previous fiscal year ).
Sales in Japan were 42.2% lower than one year earlier as the number of customers visiting our stores decreased
sharply because of the trend towards staying at home due to the spread of the COVID -19 pandemic, and theresulting closure of retail facilities and the shortening of store operating hours. The closures of physical stores inJapan, mainly in metropolitan areas, have increased. Moreover, 1,248 domestic physical stores were closed forabout two weeks from April 25 to May 7. Subsequently, as the number of new infections decreased, business
operations restarted steadily in all regions and the declaration of emergency was completely rescinded on May
25. As a result, almost all stores are now expected to reopen by the end of May. On the other hand, e -commerce
sales increased significantly by 25.7% year on year.
In other countries, sales were affected by the spread of the COVID -19 pandemic, but the scale of the decrease
was small compared to Japan.
We opened 26 stores (no new overseas stores) and closed 10 stores (including two overseas), resulting in a totalof 1,408 stores (including 75 overseas) at the end of the first quarter of this fiscal year .
In this challenging market environment, promotions to sell off inventories of spring products led to higher
discount sales. As a result, the gross profit margin decreased 5.2 percentage points from one year earlier to
53.2%.
Selling, general and administrative (SG&A) expenses were 5,219 million yen lower than in the same period of
the previous year as a result of efforts to reduce personnel expenses and store rents through store closures andshortened store operating hours, as well as drives to decrease other expenses by refraining from business trips
and cancelling events. However, as a result of a significant decrease in sales, the ratio of SG&A expenses to sales
increased 18.4 percentage points to 67.5%, and there was an operating loss of 4,758 million yen (operating profitof 5,221 million yen in the same period of the previous fiscal year).
There were extraordinary losses of 88 million yen for the impairment of store assets.
(2) Explanation of Financial Position
Total assets decreased 4,216 million yen from as of February 29, 2020 to 93,707 million yen as of May 31, 2020.
There were increases of 5,737 million yen in inventories and 2,502 million yen in other under investments andother assets (deferred tax assets, etc.) but there was a decrease of 12,158 million yen in cash and deposits.
Liabilities increased 499 million yen to 41,383 million yen. There were decreases of 2,564 million yen inelectronically recorded obligations-operating, 956 million yen in provision for bonuses and 761 million yen inprovision for point card certificates but there was an increase of 5,000 million yen in short -term borrowings.
Net assets decreased 4,716 million yen to 52,324 million yen. This was mainly due to a decrease of 4,873 million
yen in retained earnings.
- 2 -Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2021 Fiscal Year(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
Given that concerns about the COVID-19 pandemic have not abated, it has become extremely difficult to forecast
the trends in economic activity and consumer sentiment because of concerns about the reclosure of retailfacilities, the trend towards consumers staying at home and other changes in lifestyle preferences. Due to thenumerous uncertainties about how the COVID-19 crisis will affect results of operations, there is no forecast
because we believe that it is not possible to establish a reliable forecast for the fiscal year end ing in February
2021 at this time. An announcement will be made as soon as it becomes possible to determine a forecast.

- 3 -Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2021 Fiscal Year

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Million yen)First quarter of FY2/21(As of May 31, 2020)

FY2/20(As of Feb. 29, 2020)
AssetsCurrent assets
Cash and deposits

26,462

14,303

Notes and accounts receivable-trade

9,954

10,047

Inventories

15,00820,746

Other

1,877

1,728

Allowance for doubtful accounts
Total current assets

(68)

(54)

53,234

46,771

5,349

5,407

Non-current assets
Property, plant and equipment
Store interior equipment, net
Other, net

9,915

9,713

Total property, plant and equipment

15,265

15,121

478

437

Other

5,799

5,990

Total intangible assets

6,278

6,427

Intangible assets
Goodwill

Investments and other assets
Investment securities

242

241

Leasehold and guarantee deposits

15,95915,693

Other

7,212

9,715

Allowance for doubtful accounts

(268)

(263)

Total investments and other assets

23,14625,38744,68946,93697,92493,707

Notes and accounts payable-trade

7,900

8,150

Electronically recorded obligations-operating

Total non-current assets
Total assets
Liabilities
Current liabilities

9,020

6,455

Short-term borrowings

-

5,000

Accounts payable-other

11,500

11,134

Income taxes payable

3,130

3,227

Provision for bonuses

2,188

1,231

Provision for point card certificates

1,937

1,176

279

471

Other provisions
Other

1,505

1,598

Total current liabilities

37,46238,447

Non-current liabilities
Provisions

396

194

Other

3,024

2,741

Total non-current liabilities

3,421

2,935

40,88341,383

Total liabilities- 4 -Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2021 Fiscal Year

(Million yen)First quarter of FY2/21(As of May 31, 2020)

FY2/20(As of Feb. 29, 2020)
Net assets
Shareholders’ equity
Share capital

2,660

2,660

Capital surplus

7,213

7,213

Retained earnings

51,07946,206

Treasury shares(4,372)(4,244)

Total shareholders’ equity

56,58051,835

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

(0)

(1)

6

(1)

Foreign currency translation adjustment

454

492

Total accumulated other comprehensive income

461

489

57,041

52,324

97,92493,707

Total net assets
Total liabilities and net assets- 5 -Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2021 Fiscal Year

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Three-month Period)First three months of FY2/20(Mar. 1, 2019 – May 31, 2019)(Million yen)First three months of FY2/21(Mar. 1, 2020 – May 31, 2020)

Net sales

56,29033,267

Cost of sales

23,40815,584Gross profit

32,882

17,683

Selling, general and administrative expenses

27,66022,441

Operating profit (loss)

5,221(4,758)Non-operating income
Dividend income

31

Gain on valuation of derivatives

51

14

Subsidy income

17

62

Other

68

85

Total non-operating income

141

164

Interest expenses

32

35

Foreign exchange losses

203

179

6

13

Non-operating expenses

Other
Total non-operating expenses

243

228

5,119

(4,822)

Impairment loss

32

88

Loss on sales of investment securities

4-

Ordinary profit (loss)
Extraordinary losses

36

88

Net income (loss) before income taxes

Total extraordinary losses

5,083(4,910)

Income taxes-current

2,253

206

Income taxes-deferred(437)(1,435)

Total income taxes

1,816(1,228)Net income (loss)

3,267(3,681)

Net income (loss) attributable to owners of the parent

3,267(3,681)- 6 -Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2021 Fiscal Year

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)First three months of FY2/20(Mar. 1, 2019 – May 31, 2019)(Million yen)First three months of FY2/21(Mar. 1, 2020 – May 31, 2020)

Net income (loss)

3,267(3,681)Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

(49)

(1)

(42)

(8)

Foreign currency translation adjustment

197

37

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

- 7 -

105

28

3,372

(3,653)

3,372(3,653)--

Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2021 Fiscal Year

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

- 8 -Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2021 Fiscal Year

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

First three months of FY2/21
Sales (million yen)

YoY change (%)

Composition (%)

GLOBAL WORK

5,673

17.1

(46.6)

niko and ...

4,275

12.8

(45.5)LOWRYS FARM

3,420

10.3

(44.4)STUDIO CLIP

3,384

10.2

(39.9)LEPSIM

2,107

6.3(43.2)JEANASIS

1,587

4.8

(46.4)BAYFLOW

1,426

4.3

(40.9)RAGEBLUE

970

2.9(47.9)

Others (Note 3)

4,820

14.5

(41.9)(44.1)

Total (Adastria)

27,666

83.2

BUZZWIT Co., Ltd.

1,380

4.1

16.3

ELEMENT RULE Co., Ltd. (Note 3)

1,626

4.9

(34.2)

52

0.2-

Other consolidated subsidiaries
Total (Japan)

30,72692.4(42.2)

Hong Kong

605

1.8

(31.5)

China

173

0.5

15.8

Taiwan

616

1.9

(1.1)

South Korea

166

0.5

(39.5)

USA

978

2.9

(17.6)

Notes:

Total (Overseas)

2,540

7.6

(18.6)

Total (Group)

33,267100.0(40.9)

1. The number of stores is 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.
3. On March 1, 2020, Adastria conducted an absorption-type split where the PAS TIERRA business unit of Adastria
was divested and then transferred to consolidated subsidiary ELEMENT RULE Co., Ltd. As a result, the sales ofthis brand, which was included in “others” for Adastria in prior years, are included in the sales of ELEMENTRULE beginning with the first quarter of the fiscal year ending in February 2021.

(2) Sales for Merchandise Categories
Category

First three months of FY2/21
Sales (million yen)

Composition (%)

YoY change (%)

Men’s apparel (bottoms, tops)

4,265

12.8

(46.1)

Lady’s apparel (bottoms, tops)

21,79565.5(42.7)

7,206

21.7

(30.5)

33,267100.0(40.9)

Others
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.

- 9 -Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2021 Fiscal Year

(3) Number of Stores
Number of storesFirst three months of FY2/21
Brand / region

As of Feb.
29, 2020

GLOBAL WORK

Absorptiontype split(Note 3)
210-

niko and ...

144-

LOWRYS FARM136

STUDIO CLIP

183

LEPSIM

OpenedAs of May31, 2020

Increase/decrease

ClosedChanged
1

(1)

-

-

210

1

-

-

1

145

-

-

-

-

-

136

-

2

-

-

2

185

128

-

-

-

-

-

128

JEANASIS

73

-

-

-

-

-

73

BAYFLOW

54

-

2

-

-

2

56

RAGEBLUE

54

-

1

-

(2)

(1)

53

Others

247

(3)

13

1

(3)

8

255

1,229

(3)

20

-

(5)

12

1,241

BUZZWIT Co., Ltd.

7

-

1

-

-

1

8

ELEMENT RULE Co., Ltd.

77

3

5

-

(2)

6

83

Other consolidated
subsidiaries

2

-

-

-

(1)

(1)

1

1,315

-

26

-

(8)

18

1,333

16

-

-

-

-

-

16

China

1

-

-

-

-

-

1

Taiwan

37

-

-

-

-

-

37

South Korea

13

-

-

-

(2)

(2)

11

USA

Total (Adastria)

Total (Japan)
Hong Kong

Notes:

10

-

-

-

-

-

10

Total (Overseas)

77

-

-

-

(2)

(2)

75

Total (Group)

1,392

-

26

-

(10)

16

1,408

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.
3. The figures in “Absorption-type split” show the change in the number of stores resulting from theabsorption-type split conducted on March 1, 2020, where the PAS TIERRA business unit of Adastria was divested
and then transferred to consolidated subsidiary ELEMENT RULE Co., Ltd.

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, f or theconvenience of readers who prefer an English translation.

- 10 -