Summary of Consolidated Financial Results
for the Third Quarter of the Fiscal Year Ending February 28, 2022
(Nine Months Ended November 30, 2021)[Japanese GAAP]
December 27, 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
January 14, 2022
Yes
Yes (for investors)

Note: The original disclosure in Japanese was released on December 27, 2021 at 18:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending February 28, 2022
(March 1, 2021 – November 30, 2021)(1) Consolidated results of operations (cumulative)
Net sales(Percentages represent year-on-year changes)
Net income
Ordinary profit
attributable to ownersof the parent

Operating profit

Million yen%

Million yen%

Million yen%

Million yen

Nine months ended Nov. 30, 2021
146,731
10.5
4,483
304.6
5,725
83.7
Nine months ended Nov. 30, 2020
132,833 (19.1)
1,108 (90.7)
3,116 (73.7)
Note: Comprehensive income
Nine months ended Nov. 30, 2021: 3,734 million yen (up 297.4%)
Nine months ended Nov. 30, 2020:
939 million yen (down 86.5%)
Net income per share

Diluted net income per share

Yen

Yen

Nine months ended Nov. 30, 2021
Nine months ended Nov. 30, 2020

78.16
26.13

%

3,534
1,228

187.6
(82.2)-(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of Nov. 30, 2021
101,320
As of Feb. 28, 2021
95,449Reference: Shareholders’ equity As of Nov. 30, 2021: 52,434 million yen

52,43450,701
As of Feb. 28, 2021: 50,701 million yen

51.8
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 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 Nov. 30, 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 Nov. 30, 2021:
3,552,319 shares

As of Feb. 28, 2021:

3,639,505 shares

3) Average number of shares outstanding during the period
Nine months ended Nov. 30, 2021: 45,224,082 shares

Nine months ended Nov. 30, 2020: 47,030,649 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 o f 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 fo r the forecast shown above.

Adastria Co., Ltd. (2685) Summary of 3Q 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) Notes to Quarterly Consolidated Financial Statements

8

Going Concern Assumption

8

Significant Changes in Shareholders’ Equity

8

Subsequent Events

8

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 3Q 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 nine months of FY2/21
First nine months of FY2/22(Mar. 1, 2020 – Nov. 30, 2020) (Mar. 1, 2021 – Nov. 30, 2021)
132,833

146,731

YoY change(Amount)
13,898Operating profit

1,108

4,483

3,375

304.6

Ordinary profit

3,116

5,725

2,608

83.7

Net income attributableto owners of the parent

1,228

3,534

2,305

187.6

Net sales

YoY change
(%)
10.5

Consolidated net sales in the first nine months (March 1 – November 30, 2021) increased 10.5% year-on-year to146,731 million yen, operating profit increased 304.6% year-on-year to 4,483 million yen, ordinary profit
increased 83.7% year-on-year to 5,725 million yen, and net income attributable to owners of the parent increased
187.6% year-on-year to 3,534 million yen.
Sales in the first nine months in Japan increased 9.9% year-on-year to 137,749 million yen. In the first quarter,
sales rebounded strongly from the same period a year earlier as the business environment of physical storesimproved. However, sales in the second quarter were marginally lower than the same period a year earlier as thestate of emergency and priority measures were extended to more areas and prolo nged due to the pandemic. In
addition, unseasonal weather, including long spells of rain, also affected sales. In the third quarter, sales early inthe quarter were held down by the continuation of the state of emergency and unseasonably warm weather. Late r
in the third quarter, sales of fall and winter apparel recovered along with cooler weather and an upturn in appareldemand as people started going on outings more. Overall, third quarter sales were only slightly higher than thesame period a year earlier because the severity of the pandemic had temporarily declined at that time.
E-commerce sales in the third quarter continued to grow, increasing 8.1% from one year earlier with the supportof TV commercials and other substantial marketing activities for increasing the number of customers of the
Adastria e-commerce “.st” website.
Overseas sales increased 20.4% year-on-year to 8,981 million yen. Sales increased 97.4% year-on-year in
Mainland 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. In Taiwan, earnings continued
to grow although there was a small decline in sales as the economy slowed down due to another wave of thepandemic that ended in August. In the United States, wholesale sales as well as sales at physical stores rose as the
U.S. economy recovered and this segment returned to profitability in the third quarter.
We opened 85 stores (including seven overseas) and closed 23 stores (including five overseas), resulting in a
total of 1,462 stores (including 70 overseas) at the end of the first nine months 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 remained at 55.7%, the same level as one year earlier.
Selling, general and administrative expenses increased 6.0% partially because there was no reduction or
exemption of store rent as in the previous fiscal year and advertising and sales promotion increased for raising
the awareness of our e-commerce operations. However, there was an operating surplus as the ratio of selling,
general and administrative expenses improved by 2.2 percentage points to 52.6% of sales because of sales growth.
The operating margin also rose 2.2 percentage points. In addition, we recorded as non-operating income
subsidies for employment adjustment of 486 million yen associated with temporary store closings and a subsidyof 471 million yen related to shortened operating hours caused by the pandemic, and foreign exchange gains of
240 million yen.

- 2 -Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2022 Fiscal Year

There was extraordinary income of 264 million yen for the reversal of the allowance for doubtful accounts
resulting from the conversion of a loan to LOVEBONITO HOLDINGS PTE.LTD.a Singapore company using the“Love Bonito” omnichannel fashion brand, to equity to become an equity partner of this company and 81 million
yen due to a gain on the liquidation of the Korean subsidiary. There was an extraordinary loss of 321 million yen
for the impairment of store assets.
(2) Explanation of Financial Position
Total assets increased 5,870 million yen from as of February 28, 2021 to 101,320 million yen as of November 30,
2021. There was a decrease of 8,263 million yen in cash and deposits but there were increases of 7,265 million
yen in notes and accounts receivable-trade, 5,924 million yen in inventories and 982 million yen in other(software, etc.) under intangible assets.
Liabilities increased 4,137 million yen to 48,885 million yen. There were decreases of 2,299 million yen inaccounts payable-other, 1,805 million yen in income taxes payable but there were increases of 3,061 million yen
in notes and accounts payable-trade and 6,000 million yen in short-term borrowings.
Net assets increased 1,732 million yen to 52,434 million yen. This was mainly due to a decrease of 281 million
yen in treasury shares (increase in net assets), and increases of 1,252 million yen in retained earnings and 206
million yen in foreign currency translation adjustment.
(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 3Q Financial Results for February 2022 Fiscal Year

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Million yen)
Third quarter of FY2/22(As of Nov. 30, 2021)

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

24,17915,916

Notes and accounts receivable-trade

9,751

17,016Inventories

15,71821,643

Other

1,995

1,317

Allowance for doubtful accounts

(74)

(133)

51,56955,760Store interior equipment, net

4,222

4,410

Other, net

10,354

10,128

Total property, plant and equipment

14,577

14,538

113

68

Other

7,179

8,161

Total intangible assets

7,292

8,230

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

Intangible assets
Goodwill

Investments and other assets
Investment securities

260

988

Leasehold and guarantee deposits

15,162

15,092

Other

7,772

7,049

Allowance for doubtful accounts(1,184)(340)

Total investments and other assets

22,01022,79043,88045,55995,449101,320

Notes and accounts payable-trade

9,548

12,610Electronically recorded obligations-operating

Total non-current assets
Total assets
Liabilities
Current liabilities

7,360

7,793

Short-term borrowings

-

6,000

Accounts payable-other

14,04011,740

Income taxes payable

4,151

2,345

Provision for bonuses

2,170

1,186

Provision for point card certificates

1,285

2,037

420

432

Other provisions
Other

2,077

1,385

Total current liabilities

41,05545,531

Non-current liabilities
Provisions

356

308

Other

3,336

3,045

Total non-current liabilities

3,692

3,354

44,74748,885

Total liabilities- 4 -Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2022 Fiscal Year

(Million yen)
Third quarter of FY2/22(As of Nov. 30, 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

48,47949,731

Treasury shares(7,917)(7,636)

Total shareholders’ equity

50,43551,9690(2)

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

34

29

Foreign currency translation adjustment

231

438

Total accumulated other comprehensive income

266

465

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

- 5 -

-

0

50,701

52,434

95,449101,320

Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2022 Fiscal Year

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Nine-month Period)First nine months of FY2/21(Mar. 1, 2020 – Nov. 30, 2020)(Million yen)First nine months of FY2/22(Mar. 1, 2021 – Nov. 30, 2021)

Net sales

132,833

146,731

Cost of sales

58,88365,058Gross profit

73,94981,673

Selling, general and administrative expenses

72,841

77,189Operating profit

1,108

4,483

Foreign exchange gains

34

240

Subsidy income

190

471

1,658

486

363

260

2,247

1,459

Interest expenses

104

109

Loss on valuation of derivatives

81

55

Other

52

52

Non-operating income

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

Total non-operating expenses
Ordinary profit

238

218

3,116

5,725

Extraordinary income
Gain on liquidation of subsidiaries and associates-

81

Reversal of allowance for doubtful accounts-

264

Total extraordinary income-

346

Impairment loss

226

321

Provision for loss on business liquidation

133-

Total extraordinary losses

360

321

Net income before income taxes

2,756

5,750

Income taxes-current

1,363

2,526

Income taxes-deferred

163

(310)

Total income taxes

1,527

2,216

Net income

1,228

3,534

Extraordinary losses

Net loss attributable to non-controlling interests-(0)

Net income attributable to owners of the parent

1,228

3,534

- 6 -

Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2022 Fiscal Year

Quarterly Consolidated Statement of Comprehensive Income(For the Nine-month Period)First nine months of FY2/21(Mar. 1, 2020 – Nov. 30, 2020)(Million yen)First nine months of FY2/22(Mar. 1, 2021 – Nov. 30, 2021)

1,228

3,534

(2)

(2)

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

(34)

(4)

Foreign currency translation adjustment

(252)

206

Total other comprehensive income

(289)

199

939

3,734

939

3,734

-

(0)

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of
the parent
Comprehensive income attributable tonon-controlling interests- 7 -Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2022 Fiscal Year

(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Subsequent Events
Adastria subscribes for new shares to be issued through third-party allotment conducted by Zetton, Inc. andcommences tender offer for Zetton, Inc.’s shares as well as executes capital and business alliance agreement
associated therewith
As was announced on December 14, 2021 in a press release titled “Adastria subscribes for new shares to beissued through third-party allotment conducted by Zetton, Inc. and commences tender offer for Zetton, Inc.’sshares (Securities code: 3057) as well as executes capital and business alliance agreement associated therewit h,”
Adastria resolved to purchase new shares to be issued through a third-party allotment by Zetton, start a tender
offer for Zetton’s common stock as prescribed by the Financial Instruments and Exchange Act, and sign on
December 14, 2021 a capital and business alliance agreement with Zetton in association with the third-party
allotment and tender offer.
1. Summary of the third-party allotment(1) Class of shares to be purchased:(2) Number of shares to be purchased:(3) Amount per share:(4) Total amount:(5) Scheduled payment date:Common stock
1,621,400 shares
797 yen per share
1,292,255,800 yen
December 30, 2021

2. Tender Offer(1) Purpose of the Tender Offer
Adastria has decided to use this tender offer to make Zetton a consolidated subsidiary with the goal of increasing
the profitability of this company, which is expected to contribute to the growth of Adastria’s corporate value. The
addition of future business opportunities in the restaurant sector resulting from this acquisition will become one
more aspect of Adastria’s activities to become a source of ideas and products for a broad range of lifestyles for
consumers.
(2) Profile of Zetton
Name:

Zetton, Inc.

Location:

3-12-23 Sakae, Naka-ku, Nagoya, Aichi

Title and name of representative:

Shinsuke Suzuki, Representative and President

Description of business:

Management, development and consulting of restaurants, etc.

Stated capital:

561 million yen (as of August 31, 2021)

Establishment:

October 26, 1995

(3) Tender offer period: January 4, 2022 (Tuesday) to February 16, 2022 (Wednesday) (30 business days)(4) Tender offer price: 950 yen in cash per share of Zetton shares(5) Number of share certificates, etc. to be purchased
Number of shares to be purchased:
1,668,000 shares
Minimum number of shares to be purchased:
958,600 shares (40.00%)
Maximum number of shares to be purchased:
1,668,000 shares (51.00%)- 8 -Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2022 Fiscal Year

(6) Purchase price: 1,585 million yen (planned)
Note: The purchase price is obtained by multiplying the number of shares to be p urchased in the tender offer(1,668,000 shares) by the tender offer price of 950 yen per share.
(7) Post-tender offer policy and Future Outlook
In addition to the Capital Increase through Third-party Allotment, the Company will conduct the Tender Offer
for the purpose of acquiring a majority from 40% of the voting rights of the Target and making the Target its
consolidated subsidiary, but the Company does not intend to delist the Target's shares. Therefore, if, as a result of
the Capital Increase through Third-party Allotment and the Tender Offer, the Company acquires a majority from
40% of the voting rights of the Target, the Company does not intend to acquire additional sha res of the Target at
this time. If the shareholding ratio of the Tender Offeror in the Target Company Shares does not reach 51.00% as
a result of the Tender Offer, the Tender Offeror will, for the purpose of effectively controlling the Target
Company and making the Target Company its consolidated subsidiary, execute a memorandum of understandingthat satisfies requirements for the Tender Offeror to hold a controlling interest in the Target Company, at theBoard of Directors of the company on December 30, 2012.
3. Outlook concerning delisting of Zetton and reason
Currently, Zetton is listed on the Centrex market of the Nagoya Stock Exchange. The delisting of Zetton is not
the intent of this tender offer and the maximum number of shares to be purchased is 1,668,000 . As the purpose of
the tender offer is to make Zetton a consolidated subsidiary, even if the maximum number of shares arepurchased, Adastria will hold 51.00% of the voting rights of Zetton. Consequently, Adastria believes that Zetton
will continue to be listed on the Centrex market after the tender offer.

- 9 -Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2022 Fiscal Year

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

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

YoY change (%)

Composition (%)

GLOBAL WORK

27,606

18.8

12.6

niko and ...

19,802

13.5

5.3

LOWRYS FARM

14,872

10.1

3.9

STUDIO CLIP

14,361

9.8

5.0

LEPSIM

8,837

6.0

8.1

JEANASIS

7,543

5.1

8.4

BAYFLOW

6,654

4.5

5.8

RAGEBLUE

4,106

2.8

7.4

Others

21,588

14.8

18.7
9.3

Total (Adastria)

125,373

85.4

BUZZWIT Co., Ltd.

5,132

3.5

9.3

ELEMENT RULE Co., Ltd.

6,864

4.7

20.3

379

0.2

55.1

Other consolidated subsidiaries
Total (Japan)

137,749

93.8

9.9

Hong Kong

1,997

1.4

9.2

China

1,609

1.1

97.4

Taiwan

1,845

1.3

(0.8)

USA

3,529

2.4

43.3

Total (Overseas)

8,981

6.2

20.4

Total (Group)

146,731

100.0

10.5

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 nine months of FY2/22
Sales (million yen)

Composition (%)

YoY change (%)

Men’s apparel (bottoms, tops)

21,855

14.9

17.4

Lady’s apparel (bottoms, tops)

94,04864.1

11.6

Others30,82721.0

2.9

146,731

100.0

10.5

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 3Q Financial Results for February 2022 Fiscal Year

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

As of Feb. 28,
2021

First nine months of FY2/22

As of Nov. 30,
2021

GLOBAL WORK

209

1

-

(2)

Increase/decrease(1)

niko and ...

144

2

-

-

2

146

LOWRYS FARM

134

4

-

-

4

138

STUDIO CLIP

183

3

-

(1)

2

185

LEPSIM

122

1

-

-

1

123

JEANASIS

72

2

-

-

2

74

BAYFLOW

56

4

-

-

4

60

RAGEBLUE

49

1

-

-

1

50

Others

259

33

-

(4)

29

288

Total (Adastria)

OpenedChangedClosed

208

1,228

51

-

(7)

44

1,272

BUZZWIT Co., Ltd.

14

6

-

(1)

5

19

ELEMENT RULE Co., Ltd.

87

15

-

(8)

7

94

Other consolidated
subsidiaries

3

6

-

(2)

4

7

Total (Japan)

1,332

78

-

(18)

60

1,392

Hong Kong

14

2

-

(2)

-

14

China

3

1

-

-

1

4

Taiwan

41

3

-

(2)

1

42

USA

10

1

-

(1)

-

10

Total (Overseas)

68

7

-

(5)

2

70

Total (Group)

1,400

85

-

(23)

62

1,462

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 -