Summary of Consolidated Financial Results
for the Second Quarter of the Fiscal Year Ending February 28, 2017
(Six Months Ended August 31, 2016)[Japanese GAAP]
September 30, 2016

Company name: Adastria Co., Ltd.
Listing: TSE 1st section
Stock code:
2685
URL: http://www.adastria.co.jp
Representative: Michio Fukuda, Representative Director, Chairman & CEO
Contact:
Mika Takano, General Manager of Corporate Planning Department
Tel: +81-3-6895-6000
Scheduled date of filing of Quarterly Report:
October 14, 2016
Scheduled date of payment of dividend:
October 21, 2016
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting:Yes (for investors)
Note: The original disclosure in Japanese was released on September 30, 2016 at 16:30 (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, 2017
(March 1, 2016 – August 31, 2016)(1) Consolidated results of operations (cumulative)
Net sales

Operating income

Million yen

Six months ended Aug. 31, 2016
Six months ended Aug. 31, 2015
Note: Comprehensive income%

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

Million yen

97,726
0.7
8,054
(1.0)
8,050
(3.3)
97,032
10.2
8,132
299.0
8,324 282.8
Six months ended Aug. 31, 2016:
3,441 million yen (down 52.9%)
Six months ended Aug. 31, 2015:
7,310 million yen (up 906.3%)
Net income per share

Diluted net income per share

Yen

Yen

Six months ended Aug. 31, 2016
Six months ended Aug. 31, 2015

100.7085.60

EPS before goodwill amortization

16.6
-

-

Six months ended Aug. 31, 2016:
Six months ended Aug. 31, 2015:
Six months ended Aug. 31, 2016:
Six months ended Aug. 31, 2015:

Reference: EBITDA

%

4,848
4,156

11,903 million yen (down 3.0%)
12,272 million yen
123.37 yen (up 13.5%)
108.68 yen(*) For more details regarding definition, computational method and other matters of these indices, please refer to the section“Explanation of Results of Operations” on page 2.
Note: The Company conducted a 2-for-1 common stock split on March 1, 2016. Net income per share has been calculated as if this stock
split had taken place at the beginning of FY2/16.

(2) Consolidated financial position
Total assets

Net assets

Million yen

Million yen

As of Aug. 31, 2016
As of Feb. 29, 2016

87,00390,454

Reference: Shareholders’ equity

As of Aug. 31, 2016:

Equity ratio%

54,54353,28254,543 million yen

As of Feb. 29, 2016:

62.7
58.9
53,282 million yen

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

Yen

Yen

Yen

Fiscal year ended Feb. 29, 2016
Fiscal year ending Feb. 28, 2017
Fiscal year ending Feb. 28, 2017 (forecast)

-

40.00
35.00

Year-end

Total

Yen

Yen

-

90.00

130.00

-

40.00

75.00

Note: Revision to the most recently announced dividend forecast: None
Note: The Company conducted a 2-for-1 common stock split on March 1, 2016. Dividends per share for the fiscal year ended February 29,
2016 are the actual amounts before the stock split.

3. Consolidated Forecast for the Fiscal Year Ending February 28, 2017 (March 1, 2016 – February 28, 2017)
Net sales
Full year

Operating income

Ordinary income
Million yen

Million yen%

Million yen

208,900

4.4

17,000%6.2

17,300(Percentages represent year-on-year changes)
Net income attributable
Net income per
to owners of the parent
share

%

Million yen

6.9

12,000

%

31.5

Yen

252.09Note: Revision to the most recently announced consolidated forecast: Yes
Reference: EBITDA
EPS before goodwill amortization

Fiscal year ending Feb. 28, 2017 (forecast):
Fiscal year ending Feb. 28, 2017 (forecast):

24,900 million yen (up 1.2%)
298.30 yen (up 27.5%)

* 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 SINGAPORE PTE. LTD.)
Note: Please refer to the section “2. Matters Related to Summary Information (Notes), (1) Changes in Significant Subsidiaries
during the Period” on page 4 for further information.

(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: Yes
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None
Note: Please refer to the section “2. Matters Related to Summary Information (Notes), (3) Changes in Accounting Policies
and Accounting-based Estimates, and Restatements” on page 4 for further information.

(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, 2016:
48,800,000 shares
As of Feb. 29, 2016:

48,800,000 shares

2) Number of treasury shares at the end of the period
As of Aug. 31, 2016:
647,505 shares

As of Feb. 29, 2016:

3) Average number of shares outstanding during the period
Six months ended Aug. 31, 2016:
48,153,477 shares

Six months ended Aug. 31, 2015:

643,396 shares
48,562,835 shares

Note: The Company conducted a 2-for-1 common stock split on March 1, 2016. Number of outstanding shares (common stock)has been calculated as if this stock split had taken place at the beginning of FY2/16.
Note: Numbers of treasury shares include the Company’s stock held by the Stock Compensation Employee Stock Ownership
Plan (ESOP) Trust and the Board Incentive Plan (BIP) Trust (555,900 shares as of Aug. 31, 2016).
Note 1: Indication of quarterly review procedure implementation status
The current quarterly financial statements are exempted from quarterly review procedures based on the Financial
Instruments and Exchange Act. At the time of disclosure, the review procedures for these quarterly financial statements
have not been completed.
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“Explanation of Consolidated Forecast and Other Forward-looking Statements” on page 3 regarding preconditions or otherrelated matters for the forecast shown above.

Reference: Summary of Non-consolidated Forecast
Non-consolidated Forecast for the Fiscal Year Ending February 28, 2017 (March 1, 2016 – February 28, 2017)
Net sales
Million yen%

Operating income

Ordinary income(Percentages represent year-on-year changes)
Net income
Net income per share

Million yen

Million yen

Million yen%%

Full year
196,700
4.7
16,4006.7
16,3005.4
Note: Revision to the most recently announced non-consolidated forecast: Yes

11,200

%

34.3

Yen

235.28Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 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. Matters Related to Summary Information (Notes)

4(1) Changes in Significant Subsidiaries during the Period

4(2) Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements

4(3) Changes in Accounting Policies and Accounting-based Estimates, and Restatements

4(4) Additional Information

5

3. Quarterly Consolidated Financial Statements

6(1) Quarterly Consolidated Balance Sheet

6(2) Quarterly Consolidated Statements of Income and Comprehensive Income8(3) Quarterly Consolidated Statement of Cash Flows

10(4) Notes to Quarterly Consolidated Financial Statements

11

Going Concern Assumption

11

Significant Changes in Shareholders’ Equity

11

Subsequent Events

11

4. Supplementary Information

12(1) Number of Stores

12(2) Sales for Brands and Regions

13(3) Sales for Merchandise Categories

13

- 1 -

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 Fiscal Year

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first half of the current fiscal year (March 1-August 31, 2016), the Japanese economy, despite someweakness, including sluggish growth in corporate earnings, continued to recover slowly. The economic outlook
remained uncertain because of concerns over possible economic downturn in emerging Asian countries as well as
resource-producing countries, and Britain’s exit from the European Union. Consumer spending in Japan was
generally flat as gloomy consumer sentiment offset continuing improvements in jobs and personal income.
Domestic existing-store sales increased 2.3% from one year earlier and total sales were up 0.7% , despite thenegative effects of unfavorable summer weather. The GLOBAL WORK, niko and … and LEPSIM brands were theprimary engines of sales growth.
Regarding the store network, we opened 42 stores (including four overseas), and closed 21 (no overseas store
closed), resulting in a total network of 1,345 stores (including 108 overseas) at the end of August 2016.
The gross profit margin increased 0.6 percentage point from one year earlier to 57.9% . Further progress in cost
control more than offset increased price discounts during the summer sale season.
The ratio of selling, general and administrative (SG&A expenses) to sales increased 0.7 percentage point fromone year earlier to 49.6% mainly due to the substantial expenditures and investments to build a sound base for
growth such as preparations for launching new brands and businesses and preliminary studies about upgrading
the computer system. As a result the operating margin decreased 0.2 percentage point to 8.2%.
In the first half, there was extraordinary income of 78 million yen and extraordinary losses of 10 million yen,both resulting from the liquidation of overseas subsidiaries. Extraordinary losses of 24 million yen for the
impairment of store assets and 82 million yen for damage caused by the April 2016 earthquake in Kumamoto
prefecture were also posted.
As a result, consolidated net sales in the first half increased 0.7% year-on-year to 97,726 million yen, operating
income decreased 1.0% to 8,054 million yen, ordinary income decreased 3.3% to 8,050 million yen, and net
income attributable to owners of the parent increased 16.6% to 4,848 million yen.
Earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 3.0% to 11,903 million yen
and earnings per share (EPS) before goodwill amortization rose 13.5% to 123.37 yen. (*)(*) Amortization of goodwill that mainly resulted from the consolidation of TRINITY ARTS INC. (subsequently
absorbed by the Company) has caused large declines in operating income and all subsequent categories of
profits since the fiscal year that ended on February 28, 2014. Since goodwill amortization is not a cash
expense, this amortization created a large gap between changes in cash flows and changes at all levels of
profits starting with operating income. Furthermore, comparisons with foreign companies are difficult
because of differences in accounting standards of individual countries for recording goodwill amortization. As
a result, we are newly announcing EBITDA and EPS before goodwill amortization as reference financial
indicators.
EBITDA
Operating income + Depreciation + Amortization of goodwill (SG&A expenses)
EPS before goodwill amortization(Net income attributable to owners of the parent + Amortization of goodwill (SG&A expenses, andextraordinary losses) + Impairment losses (goodwill)) / Average number of shares ou tstanding during theperiod- 2 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 Fiscal Year(2) Explanation of Financial Position
1) Balance sheet position
Total assets decreased 3,451 million yen from as of February 29, 2016 to 87,003 million yen as of August 31,
2016. This was mainly due to increases in notes and accounts receivable-trade of 1,188 million yen andinventories of 1,630 million yen, while there were decreases in cash and deposits of 3,249 million yen, goodwillof 1,092 million yen, and investment securities of 1,148 million yen.
Liabilities decreased 4,711 million yen to 32,460 million yen. This was mainly due to decreases of 2,544 million
yen in electronically recorded obligations-operating and 2,704 million yen in accounts payable-other.
Net assets increased 1,260 million yen to 54,543 million yen. This was mainly due to an increase of 2,681
million yen in retained earnings, while there was a decrease of 1,140 million yen in valuation difference on
available-for-sale securities.
2) Cash flow position
Cash and cash equivalents (hereinafter “net cash”) as of August 31, 2016 amounted to 16,203 million yen, or
3,248 million yen less than as of February 29, 2016.
A summary of cash flows from each activity during the first half of the current fiscal year is as follows:
Cash flows from operating activities
Net cash provided by operating activities totaled 2,836 million yen (compared with 9,844 million yen provided in
the same period of the previous fiscal year). The main factors include net income before income taxes of 8,011
million yen, depreciation of 2,859 million yen, an increase in inventories of 1,830 million yen, and income taxes
paid of 4,033 million yen.
Cash flows from investing activities
Net cash used in investing activities totaled 3,688 million yen (compared with 1,950 million yen used in the same
period of the previous fiscal year). This was mainly due to the payments of 2,743 million yen for the purchase ofproperty, plant and equipment and 671 million yen for the purchase of investment securities.
Cash flows from financing activities
Net cash used in financing activities totaled 2,234 million yen (compared with 3,292 million yen used in thesame period of the previous fiscal year). This was mainly due to cash dividends paid of 2,167 million yen.

(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
The Company has revised the full year forecast for the fiscal year ending February 28, 2017 that was announced
on April 4, 2016 due to the outlook for extraordinary income resulting from the sale of some investment
securities held by the Company.
For more information about this revision, please see the September 30, 2016 press release concerning thisrevision (Japanese version only).

- 3 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 Fiscal Year

2. Matters Related to Summary Information (Notes)(1) Changes in Significant Subsidiaries during the Period
ADASTRIA SINGAPORE PTE. LTD. was excluded from the scope of consolidation in the second quarter of thecurrent fiscal year, because of the completion of its liquidation.
(2) Application of Special Accounting Methods for Presenting Quarte rly Consolidated Financial Statements
Not applicable.
(3) Changes in Accounting Policies and Accounting-based Estimates, and Restatements
Application of the accounting standards for business combinations
The Company has adopted the “Accounting Standard fo r Business Combinations” (Accounting Standards Boardof Japan (ASBJ) Statement No. 21, issued on September 13, 2013), “Accounting Standard for Consolidated
Financial Statements” (ASBJ Statement No. 22, issued on September 13, 2013), “Accounting Standard fo r
Business Divestitures” (ASBJ Statement No. 7, issued on September 13, 2013), etc. from the first quarter of thecurrent fiscal year. Accordingly, difference arising from changes in the Company’s ownership interests in
subsidiaries in cases where control is retained is recognized in capital surplus, and the acquisition costs inconnection with business combinations are recognized as expenses in the fiscal year in which they arise.
Regarding business combinations that take place on or after the beginning of the first quarter of the current fiscal
year, the Company has revised the method to reflect reviewed allocation of the acquisition costs arising fromdetermination of the provisional accounting treatment on the quarterly consolidated financial statements to which
the date of the business combination belongs. In addition, the presentation of net income and other items has
been revised, and the minority interests item has been renamed non -controlling interests. For consistency withthese changes, the consolidated financial statements for the first half of the previous fiscal year and the previous
fiscal year have been revised.
In the consolidated statement of cash flows for the first half of the current fiscal year, cash flows associated withpurchase or sales of shares of subsidiary not resulting in changes in the scope of consolidation are included in
cash flows from financing activities. On the other hand, cash flows associated with acquisition costs of shares ofsubsidiary resulting in changes in the scope of consolidation or expenses associated with purchase or sales ofshares of subsidiary not resulting in changes in the scope of consolidation are included in cash flows fromoperating activities.
The Company has adopted these accounting standards, etc. from the beginning of the first quarter of the current
fiscal year, in accordance with the transitional accounting treatments set forth in Article 58 -2 (4) of the
Accounting Standard for Business Combinations, Article 44-5 (4) of the Accounting Standard for Consolidated
Financial Statements, and Article 57-4 (4) of the Accounting Standard for Business Divestitures.
There is no impact on the quarterly consolidated financial statements for the first half.
Change in depreciation method of property, plant and equipment
Following tax law revisions, the Company has adopted the “Practical Solution on a Change in Depreciation
Method due to Tax Reform 2016” (ASBJ Practical Issue Task Force (PITF) No. 32, issued on June 17, 2016)
from the first quarter of the current fiscal year, and changed the depreciation method for facilities attached tobuildings and structures acquired on or after April 1, 2016, from the declining -balance method to the straight-line
method.
The effect of this change on the quarterly consolidated financial statements for the first half is insignificant.

- 4 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 Fiscal Year

(4) Additional Information
Transactions of delivering the Company’s own stock to employees, etc. through trusts
The Company has established a Stock Compensation Employee Stock Ownership Plan (ESOP) Trust as anincentive plan for the purpose of reinforcing the commitment of executive officers (excluding executive officers
who are directors) and senior management officers to contribute to medium and long-term growth in sales andearnings as well as corporate value.
(1) Summary of the plan
The Company established this trust by making a payment to the trust for the acquisition of the Company’s stock.
The trust beneficiaries are all eligible executive officers and senior management officers. In accordance withrules for the distribution of stock, eligible executive officers and managers are awarded certain number of points
based on their positions and individual performance evaluation and the results of operations. These individuals
can then receive the Company’s stock based on the number of points. The executive officers and senior
management officers make no payments because the Company’s contributions to the trust cover the entire cost ofpurchasing the Company’s stock through trust account.
(2) The Company’s stock held by the trust account
The Company’s stock held by the trust account is included in net assets as treasury shares at book value(excluding associated expenses). The number of shares of the Company’s stock held by the trust account was
412,500 shares with a book value of 1,348 million yen as of August 31, 2016.
Stock compensation plan for directors based on results of operations
The Company has established a Board Incentive Plan (BIP) Trust as the stock compensation plan based on the
results of company operations for the purpose of reinforcing the commitment of directors (excluding outside
directors and directors who are not residents of Japan) to contribute to medium and long -term growth in sales andearnings as well as corporate value.
(1) Summary of the plan
The Company established this trust by making a payment to the trust for the acquisition of the Company’s stock.
The trust beneficiaries are all eligible directors. In accordance with rules for the distribution of stock, eligible
directors are awarded points based on their positions and the achievement of performance goals in the fiscal year
to be evaluated. After three years from the beginning of applicable fiscal years, these directors can then receive
the Company’s stock and cash from the disposal of the Company’s stock as compensation, based on the numberof points.
(2) The Company’s stock held by the trust account
The Company’s stock held by the trust account is included in net assets as treasury shares at book value(excluding associated expenses). The number of shares of the Company’s stock held by the trust account was
143,400 shares with a book value of 468 million yen as of August 31, 2016.

- 5 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 Fiscal Year

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheet(Million yen)
Second quarter of FY2/17(As of Aug. 31, 2016)

FY2/16(As of Feb. 29, 2016)
AssetsCurrent assets
Cash and deposits

19,46016,211

Notes and accounts receivable-trade

7,668

8,856

Inventories

15,076

16,707

Other

3,313

2,520

Allowance for doubtful accounts

(53)

(68)

45,46544,227

Store interior equipment, net

6,933

6,782

Other, net

4,282

4,131

Total property, plant and equipment

11,215

10,913

Goodwill

5,493

4,401

Other

1,471

1,640

Total intangible assets

6,965

6,042

Investment securities

10,231

9,082

Lease and guarantee deposits

16,622

16,198

207

787

Allowance for doubtful accounts

(253)

(249)

Total investments and other assets

26,80725,81944,98842,77590,45487,003

Notes and accounts payable-trade

6,768

8,904

Electronically recorded obligations-operating

9,901

7,356

Short-term loans payable

1,867

1,591

Accounts payable-other

10,331

7,627

Income taxes payable

4,368

3,222

Provision for bonuses

2,212

2,190

412

418

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

Intangible assets

Investments and other assets

Other

Total non-current assets
Total assets
Liabilities
Current liabilities

Other provision
Other

563

376

36,426

31,686

Provision

94

121

Other

650

652

Total current liabilities
Non-current liabilities

Total non-current liabilities
Total liabilities

- 6 -

745

774

37,171

32,460Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 Fiscal Year

(Million yen)
Second quarter of FY2/17(As of Aug. 31, 2016)

FY2/16(As of Feb. 29, 2016)
Net assets
Shareholders’ equity
Capital stock

2,660

2,660

Capital surplus

6,987

7,227

Retained earnings

39,70942,391

Treasury shares(1,824)(2,077)

Total shareholders’ equity

47,53350,201

Valuation difference on available-for-sale securities

5,445

4,305

Deferred gains or losses on hedges

(263)

(103)

567

140

Accumulated other comprehensive income

Foreign currency translation adjustment
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

- 7 -

5,749

4,341

53,28254,54390,45487,003

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 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 FY2/16(Mar. 1, 2015 – Aug. 31, 2015)(Million yen)First six months of FY2/17(Mar. 1, 2016 – Aug. 31, 2016)

Net sales

97,032

97,726

Cost of sales

41,48041,180Gross profit

55,55256,545

Selling, general and administrative expenses

47,41948,491

Operating income

8,132

8,054

Dividend income

53

69

House rent income

63

57

Gain on valuation of derivatives

42

-

Other

232

103

Total non-operating income

391

230

Non-operating income

Non-operating expenses
Interest expenses

24

10

Foreign exchange losses

108

117

Loss on valuation of derivatives-

42

Cost of lease revenue

50

47

Other

16

16

Total non-operating expenses

200

233

8,324

8,050

Gain on liquidation of subsidiaries and associates-

78

Total extraordinary income

-

78

168

24

Ordinary income
Extraordinary income

Extraordinary losses
Impairment loss
Loss on disaster
Loss on sales of shares of subsidiaries andassociates
Loss on liquidation of subsidiaries and associates

-

82

173

-

-

10

Total extraordinary losses

342

117

Net income before income taxes

7,981

8,011

Income taxes-current

3,246

2,918

Income taxes-deferred

578

244

Total income taxes

3,824

3,162

Net income

4,156

4,848

Net income attributable to owners of the parent

4,156

4,848

- 8 -

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 Fiscal Year

Quarterly Consolidated Statement of Comprehensive Income(For the Six-month Period)First six months of FY2/16(Mar. 1, 2015 – Aug. 31, 2015)(Million yen)First six months of FY2/17(Mar. 1, 2016 – Aug. 31, 2016)

Net income

4,156

4,848

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

3,320(1,140)

(330)

159

Foreign currency translation adjustment

163

(426)

3,153

(1,407)

7,310

3,441

7,310

3,441

-

-

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of
the parent
Comprehensive income attributable tonon-controlling interests- 9 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 Fiscal Year

(3) Quarterly Consolidated Statement of Cash FlowsFirst six months of FY2/16(Mar. 1, 2015 – Aug. 31, 2015)(Million yen)First six months of FY2/17(Mar. 1, 2016 – Aug. 31, 2016)

Cash flows from operating activities
Net income before income taxes

7,981

8,011

Depreciation

3,096

2,859

Impairment loss
Amortization of goodwill

168

24

1,121

1,092

Increase (decrease) in allowance for doubtful accounts

56

10

Increase (decrease) in provision for bonuses

261

(14)

Loss (gain) on sales of shares of subsidiaries and associates

173-

Loss (gain) on liquidation of subsidiaries and associates

-

(67)

Loss on disaster-82(1,905)(1,257)585(1,830)

Increase (decrease) in notes and accounts payable-trade

1,931

(357)

Increase (decrease) in accounts payable-other

(469)

(570)

Increase (decrease) in accrued consumption taxes

Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories(915)(1,495)

Other, net

438

322

Subtotal

12,524

6,810

53

70

(26)

(10)

(2,707)(4,033)

9,844

2,836

(1,526)(2,743)-(671)

Purchase of intangible assets

(352)

(451)

Payments for lease and guarantee deposits

(541)

(428)

441

620

29

-

(0)

(13)

(1,950)(3,688)

Increase (decrease) in short-term loans payable(2,181)-

Cash dividends paid

(1,102)(2,167)(9)(13)

Interest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of investment securities

Proceeds from collection of lease and guarantee deposits
Proceeds from sales of shares of subsidiaries resulting inchange in scope of consolidation
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities

Purchase of treasury shares

-

(52)

(3,292)(2,234)

124

(163)

Net increase (decrease) in cash and cash equivalents

4,725(3,248)Cash and cash equivalents at beginning of period

7,667

19,452

Cash and cash equivalents at end of period

12,392

16,203

Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents- 10 -

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 Fiscal Year

(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Subsequent Events
Acquisition of treasury shares
The Company’s Board of Directors approved a resolution on September 30, 2016 to repurchase its own shareswith the following specific conditions pursuant to Article 156 of the Companies Act which is applicable in lieu ofArticle 165, Paragraph 3 of this act.
1. Reason for the share repurchase
To improve capital efficiency and enable the Company to adopt a timely and flexible capit al policy in response tochanges in the operating environment.
2. Details of the share repurchase(1) Class of shares to be repurchased:

Common stock of the Company(2) Total number of shares to be repurchased: Up to 1,200,000 shares(3) Total value of shares to be repurchased:

Up to 28 million yen(4) Date of repurchase:

October 3, 2016(5) Method of repurchase:Transaction through Off-Auction Own Share Repurchase Trading
System of the Tokyo Stock Exchange (ToSTNeT-3)

Sales of investment securities
The Company’s Board of Directors approved a resolution on September 30, 2016 to sell part of the investment
securities held by the Company.
1. Details of the gain on sales of investment securities(1) Stock to be sold:

One issue of listed securities held by the Company(2) Scheduled period for sales:

Early October 2016(3) Expected gain on sales:

Approx. 3,000 million yen- 11 -

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 Fiscal Year

4. Supplementary Information(1) Number of Stores
Number of stores
Store format / region

As of Feb. 29,
2016

First six months of FY2/17
Closed,Increase
OpenedRebrandedetc.
/decrease5(2)3

As of Aug. 31,
2016

GLOBAL WORK184

LOWRYS FARM

157

3

(3)

(3)

(3)

154

niko and ...

123

4

-

(2)

2

125

STUDIO CLIP

171

7

-

-

7

178

LEPSIM (Note 3)

130

5

-

-

5

135

JEANASIS

83

2

-

(4)

(2)

81

RAGEBLUE

59

2

-

(1)

1

60

HEATHER

67

3

9

(2)

10

77

Others

246

7

(6)

(7)

(6)

240

Total (Adastria)

187

1,220

38

-

(21)

17

1,237

Hong Kong

27

-

-

-

-

27

China

40

3

-

-

3

43

Taiwan

27

1

-

-

1

28

South Korea

10

-

-

-

-

10

104

4

-

-

4

108

Total (Group)
1,324
42
(21)
21
1. The number of stores is categorized by using brand operating divisions and geographic regions.

1,345

Total (Overseas)
Notes:

2. The number of stores includes e-commerce websites of other companies and e-commerce websites of Adastria.
3. The brand name of LEPSIM LOWRYS FARM has changed to LEPSIM in the first quarter of FY2/17.

- 12 -

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2017 Fiscal Year

(2) Sales for Brands and Regions
Brand / region

First six months of FY2/17
Sales (million yen)
Composition (%)

YoY change (%)

GLOBAL WORK

18,364

18.8

7.3

LOWRYS FARM

11,981

12.2

(6.6)

niko and ...

11,629

11.9

5.9

STUDIO CLIP

11,010

11.3

3.7

LEPSIM (Note 3)

7,741

7.9

5.8

JEANASIS

6,036

6.2

3.3

RAGEBLUE

4,320

4.4

(2.3)

HEATHER

3,787

3.9

(5.1)

Others17,60318.0

0.3

92,476

94.6

2.0

3,249

3.3

(8.5)

China

887

0.9

(7.7)

Taiwan

753

0.8

(3.4)

South Korea

359

0.4

(17.5)

5,250

5.4(11.4)

Total (Adastria)
Hong Kong

Total (Overseas)
Total (Group)

Notes:

97,726100.0
1. The number of stores is categorized by using brand operating divisions and geographic regions.

0.7

2. The above figures are sales to external customers and do not include internal sales between consolidated
subsidiaries.
3. The brand name of LEPSIM LOWRYS FARM has changed to LEPSIM in the first quarter of FY2/17.

(3) Sales for Merchandise Categories
Category

First six months of FY2/17
Sales (million yen)

Composition (%)

YoY change (%)

Men’s apparel (bottoms, tops)

14,002

14.3

8.8

Lady’s apparel (bottoms, tops)

64,655

66.2

(1.4)

Others

19,06919.5

2.6

97,726

100.0

0.7

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.

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.

- 13 -