Summary of Consolidated Financial Results
for the Second Quarter of the Fiscal Year Ending February 28, 2021
(Six Months Ended August 31, 2020)[Japanese GAAP]
September 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
October 15, 2020
Scheduled date of filing of Quarterly Report:
October 21, 2020
Scheduled date of payment of dividend:
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, 2020 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, 2021
(March 1, 2020 – August 31, 2020)(1) Consolidated results of operations (cumulative)
Net sales
Million yen

Six months ended Aug. 31, 2020
Six months ended Aug. 31, 2019
Note: Comprehensive income(Percentages represent year-on-year changes)
Net income
Ordinary profit
attributable to ownersof the parent

Operating profit%

Million yen%

Million yen

79,664 (26.9)(4,410)(2,730)108,981
3.8
7,164
6,987
Six months ended Aug. 31, 2020: (2,543) million yen (-%)
Six months ended Aug. 31, 2019:
4,469 million yen (-%)
Net income per share

Diluted net income per share

Yen

Yen

Six months ended Aug. 31, 2020
Six months ended Aug. 31, 2019(52.21)
93.66%

Million yen-%(2,461)
4,410

-

-

(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of Aug. 31, 2020
88,320
As of Feb. 29, 2020
97,924
Reference: Shareholders’ equity As of Aug. 31, 2020: 53,434 million yen

53,43457,041
As of Feb. 29, 2020: 57,041 million yen

60.5
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
Fiscal year ending Feb. 28, 2021
15.00
Fiscal year ending Feb. 28, 2021 (forecast)
Note: Revision to the most recently announced dividend forecast: None

-

25.00

50.00

-

25.00

40.00

3. Consolidated Forecast for the Fiscal Year Ending February 28, 2021 (March 1, 2020 – February 28, 2021)
Net sales
Million yen

Operating profit%

Million yen%

Ordinary profit
Million yen

Full year
189,000(15.0)(1,000)(1,100)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

%

Million yen-(2,200)%Yen-(46.69)

* 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 financia l 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 Aug. 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 Aug. 31, 2020:
1,638,755 shares

As of Feb. 29, 2020:

1,679,557 shares

3) Average number of shares outstanding during the period
Six months ended Aug. 31, 2020:
47,144,688 shares

Six months ended Aug. 31, 2019:47,093,537 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 2Q 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

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 2021 Fiscal Year

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
Consolidated results(Million yen)First six months of FY2/20
First six months of FY2/21(Mar. 1, 2019 – Aug. 31, 2019) (Mar. 1, 2020 – Aug. 31, 2020)
108,981

79,664

YoY change(Amount)(29,316)

Operating profit

7,164(4,410)(11,575)-

Ordinary profit

6,987(2,730)(9,717)-

Net income attributableto owners of the parent

4,410(2,461)(6,871)-

Net sales

YoY change(%)(26.9)

Consolidated net sales in the first half (March 1 – August 31, 2020) decreased 26.9% year-on-year to 79,664
million yen, operating loss was 4,410 million yen (operating profit of 7,164 million yen in the same period of theprevious fiscal year), ordinary loss was 2,730 million yen (ordinary profit of 6,987 million yen in the same
period of the previous fiscal year), and net loss attributable to owners of the parent was 2,461 million yen (netincome of 4,410 million yen in the same period of the previous fiscal ye ar).
Sales in Japan were 27.1% lower than one year earlier as the number of customers visiting our stores decreased
sharply because people stayed home due to the COVID-19 pandemic and retail facilities closed or shortened
operating hours. All of our physical stores in Japan were closed from April 25 to May 7 (about two weeks).
Subsequently, stores reopened in stages in each region of Japan as the number of COVID -19 infections declined
and the state of emergency ended. From June 3, all stores had reopened. Although the downturn in demand ofgoing out continued to affect sales, the decline in store sales in Japan in the second quarter was smaller than in
the first quarter. E-commerce sales were 25.2% higher than in the first half of the previous fiscal year. One
reason was the temporary suspension of operations of the “.st” e -commerce site that started on August 8, 2019.
The big increase was also attributable to initiatives to strengthen measures to attract e-commerce customers as
people stayed home for safety. A strong performance of BUZZWIT Co., Ltd., which sells merchandise
exclusively online, also contributed to the growth of e-commerce sales.
In other countries, sales were down in Hong Kong, South Korea and the United States because of COVID -19.
Sales in Taiwan, where the impact of COVID-19 was relatively small, were about the same as one year earlier.
Sales increased in China because of strong sales at the niko and … Shanghai flagship store.
We opened 47 stores (including 4 overseas) and closed 26 stores (including 8 overseas), resulting in a total of
1,413 stores (including 73 overseas) at the end of the first half of this fiscal year.
In this challenging market environment, promotions to sell inventories of spring apparel and other products led tomore discount sales. As a result, the gross profit margin decreased 3.1 percentage points from one year earlier to
53.1%.
Selling, general and administrative expenses were 7,413 million yen lower than one year earlier. One reason wasa decrease in personnel expenses and store rents because of store closings and reduced operating hours. Thisdecrease was also attributable to the reduction of other expenses, such as by holding down promotional expenses,
reducing credit card fees, limiting business trips and canceling events. However, due to the significant decreasein sales, the ratio of SG&A expenses to sales increased 9.0 percentage points to 58.6%, and there was an
operating loss of 4,410 million yen (operating profit of 7,164 million yen in the same period of the previous
fiscal year). There was non-operating income of 1,620 million yen due to the receipt of subsidies for employment
adjustment associated with temporary store closings caused by COVID-19.
There were extraordinary losses of 96 million yen for the impairment of store assets.

- 2 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2021 Fiscal Year(2) Explanation of Financial Position
1) Balance sheet position
Total assets decreased 9,604 million yen from as of February 29, 2020 to 88,320 million yen as of August 31,
2020. There were increases of 1,404 million yen in other under current assets (accounts receivable-other, etc.)
and 1,761 million yen in other under investments and other assets (deferred tax assets, etc.) but there was adecrease of 12,024 million yen in cash and deposits.
Liabilities decreased 5,996 million yen to 34,886 million yen. There were decreases of 5,155 million yen inelectronically recorded obligations-operating and 903 million yen in provision for point card certificates.
Net assets decreased 3,607 million yen to 53,434 million yen. This was mainly due to a decrease of 3,652 million
yen in retained earnings.
2) Cash flow position
Cash and cash equivalents (hereinafter “net cash”) as of August 31, 2020 decreased 14,345 million yen to 12,031
million yen less than as of February 29, 2020.
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 used in operating activities totaled 6,089 million yen (compared with 8,246 million yen provided in thesame period of the previous fiscal year). This was mainly due to net loss before income taxes of 2,826 million
yen and a decrease in notes and accounts payable-trade of 4,900 million yen.
Cash flows from investing activities
Net cash used in investing activities totaled 4,013 million yen (compared with 3,042 million yen used in the same
period of the previous fiscal year). This was mainly due to the payments of 2,071 million yen for the purchase ofproperty, plant and equipment and 1,202 million yen for the purchase of intangible assets.
Cash flows from financing activities
Net cash used in financing activities totaled 1,889 million yen (compared with 2,225 million yen used in thesame period of the previous fiscal year). This was mainly due to cash dividends paid of 1,192 million yen andrepayments of lease obligations of 696 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 th at was announced on July 16,
2020.

- 3 -

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2021 Fiscal Year

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

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

26,462

14,438Notes and accounts receivable-trade

9,954

9,839

Inventories

15,00814,981

Other

1,877

3,281

Allowance for doubtful accounts
Total current assets

(68)

(72)

53,234

42,468

5,349

5,237

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

9,915

9,413

Total property, plant and equipment

15,265

14,650

478

396

Other

5,799

6,341

Total intangible assets

6,278

6,737

Intangible assets
Goodwill

Investments and other assets
Investment securities

242

238

Leasehold and guarantee deposits

15,95915,560

Other

7,212

8,974

Allowance for doubtful accounts

(268)

(310)

Total investments and other assets

23,146

24,46344,68945,852

97,92488,320

7,900

8,147

Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations-operating

9,020

3,864

Accounts payable-other

11,50011,278

Income taxes payable

3,130

3,428

Provision for bonuses

2,188

2,152

Provision for point card certificates

1,937

1,034

Other provisions

279

424

Other

1,505

1,813

Total current liabilities

37,46232,144

396

287

Other

3,024

2,454

Total non-current liabilities

3,421

2,742

40,88334,886

Non-current liabilities
Provisions

Total liabilities- 4 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2021 Fiscal Year

(Million yen)
Second quarter of FY2/21(As of Aug. 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

51,07947,426

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

Total shareholders’ equity

56,58053,055

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

(0)

(4)

6

(38)

Foreign currency translation adjustment

454

421

Total accumulated other comprehensive income

461

378

57,04153,434

97,92488,320Total net assets
Total liabilities and net assets- 5 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2021 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 FY2/20(Mar. 1, 2019 – Aug. 31, 2019)(Million yen)First six months of FY2/21(Mar. 1, 2020 – Aug. 31, 2020)

Net sales

108,981

79,664

Cost of sales

47,72037,393Gross profit

61,261

42,271

Selling, general and administrative expenses

54,096

46,682

Operating profit (loss)

7,164(4,410)

Dividend income

131

Gain on valuation of derivatives

91-

Non-operating income

Subsidies for employment adjustment

-

1,620

Other

175

314

Total non-operating income

279

1,936

Interest expenses

67

71

Foreign exchange losses

377

137

-

22

Non-operating expenses

Loss on valuation of derivatives
Other

11

24

Total non-operating expenses

456

255

6,987

(2,730)49

96

Ordinary profit (loss)
Extraordinary losses
Impairment loss
Loss on sales of investment securities

4-

Total extraordinary losses

53

96

Net income (loss) before income taxes

6,933(2,826)

Income taxes-current

2,734

419

Income taxes-deferred

(211)

(785)

Total income taxes

2,522

(365)

Net income (loss)

4,410(2,461)

Net income (loss) attributable to owners of the parent

4,410(2,461)- 6 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2021 Fiscal Year

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

Net income (loss)

4,410(2,461)Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

(114)

(3)

(48)

(44)

Foreign currency translation adjustment

221

(33)

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

- 7 -

58

(82)

4,469

(2,543)

4,469(2,543)--

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2021 Fiscal Year

(3) Quarterly Consolidated Statement of Cash FlowsFirst six months of FY2/20(Mar. 1, 2019 – Aug. 31, 2019)(Million yen)First six months of FY2/21(Mar. 1, 2020 – Aug. 31, 2020)

Net income (loss) before income taxes

6,933(2,826)

Depreciation

3,444

3,352

Impairment loss

49

96

Cash flows from operating activities

Amortization of goodwill

87

79

(16)

(34)

Interest expenses

67

71

Increase (decrease) in allowance for doubtful accounts

28

44Interest and dividend income

Increase (decrease) in provision for bonuses

43

(35)

Increase (decrease) in provision for point card certificates

(24)

(903)

Decrease (increase) in notes and accounts receivable-trade

(630)

107

670

(2)

Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued consumption taxes(798)(4,900)(1,438)

(903)

456

962

Other, net

606

(709)

Subtotal

9,481(5,601)

Interest and dividend income received

16

4

(67)

(71)

(1,183)

(421)

8,246

(6,089)Purchase of property, plant and equipment(2,077)(2,071)

Purchase of intangible assets(1,215)(1,202)

Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities

Proceeds from sales of investment securities

27-

Payments for lease and guarantee deposits

(385)

(302)

Proceeds from collection of lease and guarantee deposits

658

656

Other, net(50)(1,092)(3,042)(4,013)(140)-(1,427)(1,192)

(2)

(0)

(654)

(696)

Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase (decrease) in short-term loans payable
Cash dividends paid
Purchase of treasury shares
Repayments of lease obligations
Other, net

0-(2,225)(1,889)

(50)

(38)

Net increase (decrease) in cash and cash equivalents

2,927(12,031)

Cash and cash equivalents at beginning of period

18,647

26,377

Cash and cash equivalents at end of period

21,575

14,345

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents- 8 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2021 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 2021 Fiscal Year

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

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

YoY change (%)

Composition (%)

GLOBAL WORK

14,422

18.1(27.5)

niko and ...

11,281

14.2(28.3)LOWRYS FARM

8,608

10.8

(27.8)STUDIO CLIP

8,569

10.7

(25.3)LEPSIM

4,930

6.2(30.8)JEANASIS

3,912

4.9

(32.7)BAYFLOW

3,657

4.6

(22.6)RAGEBLUE

2,227

2.8

(36.9)

Others (Note 3)

10,99513.8(28.4)(28.2)

Total (Adastria)

68,60586.1

BUZZWIT Co., Ltd.

2,755

3.5

19.0

ELEMENT RULE Co., Ltd. (Note 3)

3,522

4.4

(28.0)

99

0.1

474.3

74,982

94.1(27.1)

1,222

1.6(27.5)

China

415

0.5

52.1

Taiwan

1,169

1.5

0.5

344

0.4

(41.9)

1,530

1.9(38.2)

Other consolidated subsidiaries
Total (Japan)
Hong Kong

South Korea
USA

Notes:

Total (Overseas)

4,682

5.9

(24.4)

Total (Group)

79,664100.0(26.9)

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 six months of FY2/21
Sales (million yen)

Composition (%)

YoY change (%)

Men’s apparel (bottoms, tops)

10,74913.5(28.8)

Lady’s apparel (bottoms, tops)

49,94562.7(30.9)

Others18,96923.8(12.3)

79,664100.0(26.9)

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 2021 Fiscal Year

(3) Number of Stores
Number of storesFirst six 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

OpenedClosedChangedIncrease/decrease

As ofAug. 31,
2020

1

(1)

(1)

(1)

209

2

-

(1)

1

145

-

-

-

-

-

136

-

4

-

-

4

187

128

-

-

-

(2)

(2)

126

JEANASIS

73

-

-

-

(1)

(1)

72

BAYFLOW

54

-

2

-

(1)

1

55

RAGEBLUE

54

-

1

-

(2)

(1)

53

Others

247

(3)

20

1

(7)

11

258

1,229

(3)

30

-

(15)

12

1,241

BUZZWIT Co., Ltd.

7

-

1

-

-

1

8

ELEMENT RULE Co., Ltd.

77

3

11

-

(2)

12

89

Other consolidated
subsidiaries

2

-

1

-

(1)

-

2

1,315

-

43

-

(18)

25

1,340

16

-

-

-

(2)

(2)

14

China

1

-

1

-

-

1

2

Taiwan

37

-

3

-

-

3

40

South Korea

13

-

-

-

(6)

(6)

7

USA

Total (Adastria)

Total (Japan)
Hong Kong

Notes:

10

-

-

-

-

-

10

Total (Overseas)

77

-

4

-

(8)

(4)

73

Total (Group)

1,392

-

47

-

(26)

21

1,413

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, for theconvenience of readers who prefer an English translation.

- 11 -