Results
Results

Briefing: Q3RD
of 2023 Ending

16th January 2023

(MarchFeb.

toNovember

2022)

AGENDA
1

Results Overview

2

About Business Situation by Channel

3

Brands Overview

4

Net income and the Balance sheet

5

Initiatives in each area of TIP25

6

Initiatives related to the SDGs

7

Full-year Forecast

8

Reference Data

1

Results Overview

4

Q3RD Results of 2023 Ending Feb. : Executive summary[Summary of operations during the third quarter]
Market environment
After October 11, 2022, the government substantially relaxed its COVID-19 border control measures, eliminating the upper limit to the number offoreign tourists who were allowed to enter the country. Because of this, the department store women's apparel business, one of TSI Holdings’ keybusiness segments, started to show signs of steady revival mainly in urban areas as inbound tourism demand recovered, the first trend seen in
many months.
Business conditions
In the EC business, which had been stagnant during the first half of the year, sales recovered steadily after September, contributing to thecompany’s overall sales growth.
In addition, at present, sales and profits from the overseas business are contributing partly to the upward trend in the current term’s financial
results due to low yen value. Trends in the overseas business, however, are expected to be affected by rapid foreign exchange fluctuations andglobal inflation, which requires careful profit estimations for the coming months, including the fourth quarter.
Challenges and countermeasures
SG&A expenses tend to be slightly higher than initially planned, except for the new revenue recognition standards. Cited as two major reasons are
an increase in variable costs associated with the recovery of business performance and a temporary rise in the costs incurred by brand businessreforms. These expenses will be controlled appropriately throughout the current term. Meanwhile, the relocation of the head office was completed
in September in accordance with the medium-term management reform plan. By integrating main business bases, we reformed the fixed-cost
structure for the next term and thereafter.

Furthermore, part of the major logistic bases was transferred from Chiba to Yokohama to improve logistic costs and increase the EC business’s
shipment capabilities. We are pursuing productivity growth as well as logistic reforms as we strive to improve the overall profitability.

5

Highlights of Results for Q3RD Results of 2023 Ending Feb.
➢ In general, domestic and overseas sales, particularly non-apparel and overseas sales, continued to be strong. With net sales up by ¥11.49
billion to 111.1% (105.3% based on the old accounting standards) of the previous term’s level, the company achieved goals as initiallyplanned.
➢ Operating profit was ¥3.72 billion, up by ¥320 million compared to the revised plan.
Operating profit as compared to the previous term was affected by the temporary costs incurred by the relocation of the head office during the current term (Effects
are explained in the next page).

➢ Net income was ¥4.62 billion, up by ¥80 million as targeted by the revised plan.
However, sales failed to grow enough to exceed the expected ones, and we will work to improve this in the next term.
Old profit
standards

New profit standards
Cumulative Q3RD
2023 Ending Feb.

revised budget
difference

YoY Change

YoY

111.1%

105.3%

71.9%

76.5%

YoY

Net Sales

115.4

Billion Yen+0.12 Billon Yen+11.49 Billon Yen

Operating
Profit3.72

Billion Yen+0.32 Billon Yen-1.45 Billon Yen

Ordinary
Income

5.06

Billion Yen+0.35 Billon Yen-1.17 Billon Yen

81.1%

84.9%

Quarterly
Net Income

4.62

Billion Yen+0.08 Billon Yen-0.84 Billon Yen

84.6%

88.9%

※)

* While cumulative operating profit for the third quarter of the previous term was ¥5.18 billion, that for the same period of the current term was lower because they included¥870 million for the accelerated depreciation of the head office relocation expenses, etc.

6Operating Profit Transition for Q3RD Results of 2023 Ending Feb.
In the women's apparel business, TSI’s key business sector, department stores recovered. The OMO enhancement and D2C businesses
continued to be strong. In addition, following the previous year and the first half of the current term, the street business continued to growsubstantially. This was the major reason the company achieved the overall goal.
However, operating profit was 71.9% of the previous year’s level primarily because the company reported ¥870 million as head office relocation
costs, a temporary factor for decreasing the profits. If these temporary costs were excluded, the operating profit for the current quarter would bearound ¥4.6 billion.
* For head office relocation costs, the company reported ¥590 million for the first half of the year (¥300 million for 1Q and ¥290 million for 2Q) and plans to report ¥350 million forthe second half (¥280 million for 3Q and ¥70 million for 4Q) for a total of ¥940 million for the whole year.

Factors for differences in 3Q cumulative
operating profit between the current andprevious terms

Operating profit fell by ¥870 million due totemporary expenses (head office relocation),
but in average years, the company iscapable of earning around ¥4.6 billion in
operating profit. Operating profit remained
strong as initially planned.

Changes in 3Q cumulative
operating profit

5.18 billion yen
50.0✓ Effects of relocation: −¥870 million✓ Effects of differences in the employment
adjustment subsidies received: −¥410
million

40.0

3.31 billion yen
Earned in thecurrent quarter
Planned for the
3.72 billion yen
current term
(109.4% of the
3.4 billion yen
planned level）

30.0

1.94 billion yen

20.0
10.0

0.0

3Q cumulative operating profit: ¥3.72 billion-10.0

EBITDA: ¥6.75 billion-8.27 billion yen-20.0

FY ending
19年2月期
February
2019

FY ending
20年2月期
February
2020

FY ending
21年2月期
February
2021

FY ending

22年2月期
February
2022

FY ending

23年2月期
February2023

２

About Business Situation by Channel

Sale Trends by Channel for Q3RD Results of 2023 Ending Feb.
Sales for real stores continued to be strong, growing by ¥9.65 billion to 117.4% of the previous term’s level (up ¥5.29
billion to 109.5% of the previous term’s level if based on the old accounting standards).
Continuing from the first half of the year, overseas business performance remained steady, and in addition, theimpact of foreign exchange differences on the value of sales increased.
Comparison to the previous term: 144.3% for department stores, 111.1% for non-department stores (FB and streetside stores), 130.3% for overseas, and 99.1% for
domestic EC (101.0% for total domestic and overseas EC)

Domestic8

Department
StoresCommercial
Facilities(*1)
E-Commerce

Domestic
Others(*2)
Overseas(*3)

Old profit standards

Old profit standards

New profit
standards

New profit
standards

CumulativeQ3RD
2021 Ending Feb.

CumulativeQ3RD
2022 Ending Feb.

CumulativeQ3RD
2023 Ending Feb.

Growth by Channel

9.39 Billion Yen

10.53 Billion Yen(Composition Rate：9.7%)

41.51 Billion Yen

15.21(Composition Rate： 10.1%)

161.8％ 144.3％

Billion Yen(Composition Rate：9.9%)44.49 Billion Yen

49.93 Billion Yen

120.3％ 111.1％

Billion Yen(Composition Rate ：45.6%)(Composition Rate： 43.3%)

28.98 Billion Yen

28.39 Billion Yen(Composition Rate ：43.3%)

28.14

Billion Yen（
Domestic
E-Commerce
ratio：(Domestic E-Commerce ratio：36.3%) (Domestic E-Commerce ratio ：33.9%)
30.2%）

11.11 Billion Yen

12.23 Billion Yen

11.95 Billion Yen(Composition Rate： 11.4%)(Composition Rate： 11.8%)(Composition Rate：10.4%)

6.2

YoY (%)

CumulativeQ3RD
2023 Ending Feb.

Billion Yen(Composition Rate：13.2%)(Composition Rate： 42.7%)

Billion Yen(Composition Rate： 6.4%)

compared to year
before last (%)

Old profit standards

7.79

Billion Yen(Composition Rate： 7.5%)

10.16

Billion Yen(Composition Rate：8.8%)

10.87

49.90

26.71 Billion Yen

97.1%

99.1%

107.5%

97.7%

Billion Yen(Composition Rate：10.7%)

163.8%

130.3%

Billion Yen(Composition Rate ：9.3%)（ Domestic E-Commerce ratio：
30.5%）

11.73

10.16

*1 Fashion buildings, shopping centers, railroad station buildings, individual stores, outlet shops etc. except for department stores.
*2 Apparel businesses such as wholesale, intercompany sales and non-apparel businesses of the group companies.
*3 Results of Efuego Corp. which operates EC sites centering on Tactics.com in the U.S. is to be consolidated from the second quarter of 2021 and onward. The results are recorded in overseas sales.

9E-commerce in Q3RD Results of 2023 Ending Feb.
Cumulative EC sales for the third quarter recovered steadily, registering ¥31.07 billion, 101.0% of the previous
term’s level (new revenue recognition standards).
Sales for the EC business, which had struggled during the first half of the year, in the third quarter alone continued to be strong, reporting
108.9% of the previous term’s level.
The hosting of OMO events and the planning and introduction of separately ordered EC merchandise, the measures taken on a company-widebasis, helped improve sales significantly.
After the relocation of the head office, SNS operation reforms for the EC business made progress chiefly in women's brands, making the mostof newly installed spaces dedicated to shooting live streaming.
Old profit standards

Unit : Billion Yen

Old profit
standards

New profit standards

CumulativeQ3RD
2021 Ending Feb.

CumulativeQ3RD
2022 Ending Feb.

12.57

13.33

13.24

105.3%

99.3%

13.25

(ratio(%))(43.4%)(47.0%)(47.1%)(＋3.7pt)(+0.1pt)(49.6%)

Domestic EC

28.98

28.39

28.14

97.1%

99.1%

26.71

(36.3%)(33.9%)(30.2%)(-6.1pt)(-3.7pt)(30.5%)

In-House EC

CumulativeQ3RD Compared to year
2023 Ending Feb.
before last (%)

Y/Y(%)

CumulativeQ3RD
2023 Ending Feb.

Quarterly changes in EC sales comparedto the previous term
108.9%
11,500110.0%

11,000105.0%

Unit : Billion yen(ratio(%))*１

10,500

97.4%

96.5%

100.0%

11,29910,0009,500

Overseas EC

2.18

2.37

2.92

133.7%

123.2%

90.0%

10,0792.92
9,000(ratio(%))*２(35.2%)(30.4%)(28.8%)(-6.4pt)(-1.6pt)

95.0%

9,692

85.0%

(28.8%)
8,500

E-Commerce TOTAL

31.16

30.76

31.07

99.7%

101.0%

29.63(ratio(％))※１(36.2%)(33.6%)(30.0%)(-6.2pt)(-3.6pt)(30.3%)

80.0%

1Q
2023.2期
2023 ending Feb.
第1四半期

2Q
2023.2期
2023 ending Feb.
第2四半期
EC売上高
EC
sales

*1 Domestic E‐Commerce ratio excluding domestic and other sales (wholesale, company sales, etc.)*2 Results of EfuegoCorp. which operates EC sites centering on Tactics.com in the U.S. is to be consolidated from the second
quarter of 2021 and onward. The results are recorded in overseas sales.

3Q
2023.2期
2023 ending Feb.
第3四半期

前期比
YoY
change10

Sale Trends by Channel for Q3RD Results of 2023 Ending Feb.
Department store women's brands such as LE PHIL, human woman, ADORE recovered.
The EC business escaped from stagnation in the first half of the year and entered a growth phase again.
Real store businessEC business

Real stores: 117.4% of the previous term’s level (including department stores:
144.3%)

EC: 101.0% of the previous term’s level; 108.9% of the previous term’s level
for the third quarter alone

Department store women's brands, which had been forced to struggle since the
COVID-19 pandemic spread, continued to recover. Sales from department storesexceeded those for the previous term though they were affected by the withdrawalof some brands. Despite COVID-19, these brands worked to develop new sales
territories and new customers by actively opening pop-up stores in line with thegrowing interest of people in going out.

The EC business was forced to stagnate during the first half of the year due todelayed response to market changes, but it is getting back again on the track
to growth by acquiring new customers through the expansion of information
content and the staging of events linked to stores.
It will continue to strengthen its platforms such as LINE ID cooperation.

▲ “PGG” and “NBB WEEKEND” opened
its first Pop-up store▲ Selling products only on
the web▲ Plans to invite customers toparticipate were implemented▲ Various collaboration
projects primed the pump andnew customers were acquired

３

Brands Overview

12

Individual Overview of Major Brands in Q3RD Results of 2023 Ending Feb.
The percentage of top ten brands in terms of sales further increased from 58.4% at the end of the first half of the year to58.9%, indicating that major brands continued to be strong or recovered.
In particular, men’s street brands and department store women's brands, including those other than the top ten, made rapid
progress, driving sales growth much larger than that achieved in the first half of the year. As a result, the company’s overallsales were 111.1% of the previous term’s level while sales for the top ten brands were 113.7% of the previous term’s level.
・ HUF (Japan and overseas)
New stores were opened in a wider range of areas due to thedomestic store opening strategy, thus acquiring new customers.
The brand increased sales regardless of sales channels withdomestic sales registering 213.3% of the previous term’s level.

Sales by brand: Changes in sales for the top ten brands during the current term andthe percentage of the brands in the company’s total sales

113.7%

60. 0%

114 .0%111.2%

59. 0%

112 .0%110.0%
110 .0%58. 0%・ AVIREX
In addition to the invigoration of the market due to related hit
movies, the relaxation of COVID-19 behavioral restrictions
significantly supplied a favorable tailwind for AVIREX, attracting
more customers to the brand with many streetside outlets. The
brand actively offered collaborative products, maintaining strong
sales.

108 .0%57. 0%

58.4%

58.9%

106 .0%104 .0%56. 0%

57.1%
102 .0%55. 0%

100 .0%1Q
cumulative
2023.2期
2023 ending Feb.

第1四半期計

1H total
2023.2期
2023 ending Feb.

上期計

Company-wide sales
売上高全社構成比
composition
ratio(%)

3Q
cumulative
2023.2期
2023 ending Feb.

第3四半期累計
YoY change in
売上高前期比sales(%)

・ NATURAL BEAUTY BASIC
The brand’s sales growth rate went below the company’s
average, but its profitability improved significantly. Limited Line
continued to be strong, becoming a major pillar of the brand’s
product lineups.
・ human woman
The brand recovered regardless of sales areas, but in particular,
outlets in large cities and their vicinities benefited from therecovery of department stores, registering much larger sales
than in the previous year. The brand made progress in shutting
down nonperforming stores, thereby improving its profitability.

４

Net income and the balance sheet

1420Net Income Impact Items for Q3RD Results of 2023 Ending Feb. 2月期

Ordinary income was ¥5.06 billion, including unplanned foreign exchange profits from overseas subsidiaries’ dollardenominated assets, etc. at ¥490 million and dividend incomes, real estate revenues, and other non-operating revenue at ¥1.52
billion.
Net income was ¥4.62 billion, including gains on sales of investment securities at ¥830 million, impairment loss at ¥330 million,
and other extraordinary profits/losses as well as income tax adjustments, and the net profit margin was 4.0%.
・Gain on sales of investment securities(unplanned): ¥830 million
・Cooperation money for large facilities, etc.
(unplanned): ¥60 million

・Foreign exchange profit(unplanned): ¥490 million
・Dividend income: ¥460 million
・Real estate revenue: ¥260 million
・Equity method investment profit/loss:¥50 million

・Interest expenses: ¥50 million
・Real estate expenses: ¥40 million

Operting profit margin
3.2%

Operatingincome

-0.68
-0.73

-0.18

1.52
3.72

0.97

Non-operating
incomeNon-operating
expenses

UNIT: Billion yen

4.62

・Impairment loss (unplanned): ¥330
million・Losses on valuation of investment
securities (unplanned): ¥150 million
Extraordinary
incomeExtraordinaryloss

Net profit margin
Ratio 4.0%

Income taxes
deferredQ3 cumulative
net income

Ordinary Income

Profit before tax

Profit Attributable to Owners of Parent¥5.06 billion¥5.35 billion¥4.62 billion

Unplanned profit/loss total: +¥780 million (+¥490 million for non-operating revenue and +¥290 million for extraordinary income/loss)* Extraordinary losses associated with temporary store closures as reported in the previous term: ¥1.19 billion

15

About Balance Sheet
Unit:Million Yen
Cumulative Q3RD
2022 Ending Feb.

1ST Half 2023
Ending Feb.

Cumulative Q3RD 2023 Ending Feb.

Q2/Q3
ChangeComposition
Rate (%)

Results

78,58552.4%

74,66154.1%

80,805

55.4%

2,220

102.8%

6,144

108.2%

35,68822,658

23.8%
15.1%

37,06921,780

26.8%
15.8%

32,13928,280

22.0%
19.4%

-3,5495,622

90.1%
124.8%-4,9306,500

86.7%
129.8%

71,48547.6%

63,43445.9%

65,15544.6%-6,330

91.1%

1,721

102.7%

30,204
4,956

20.1%
3.3%

27,684
4,722

20.0%
3.4%

28,122
4,713

19.3%
3.2%

-2,082
-243

93.1%
95.1%

438
-9

101.6%
99.8%

150,071

100.0% 138,095

100.0%

145,961

100.0%-4,110

97.3%

7,865

105.7%

31,10020.7%

26,481

19.2%

32,05922.0%

959

103.1%

5,578

121.1%

129
7,035

0.1%
4.7%

121
5,262

0.1%
3.8%

17
4,987

0.0%
3.4%

-112
-2,048

13.2%
70.9%

-104
-275

14.0%
94.8%

16,31810.9%

12,4759.0%

12,177

8.3%-4,141

74.6%

-298

97.6%

11,552

7.7%

7,313

5.3%

6,478

4.4%

-5,074

56.1%

-835

88.6%

Total Liabilities

47,41931.6%

38,95728.2%

44,23630.3%-3,182

93.3%

5,280

113.6%

Total Net Assets

102,652

68.4%

99,13871.8%

101,724

69.7%

-928

99.1%

2,586

102.6%(of Treasury Stock(-))-3,688-2.5%-4,759-3.4%-5,388-3.7%-1,700146.1%-629

113.2%

Total Liabilities and Net Assets

150,071

100.0% 138,095

100.0%

145,961

100.0%-4,110

97.3%

7,866

105.7%

Current Assets(of Cash and Deposits)(of which, Inventory)
Non-current Assets(of Investment Securities)(of Investment Real estate)
Total Assets
Current Liabilities(of Short-term borrowings)(of Current portion of long-term borrowings)

Non-current Liabilities(of Long-term borrowings)

Composition
Composition
Results
Rate (%)
Rate (%)

Y/Y
ChangeResults

Y/Y (%)

Q2/Q3 (%)> Inventory assets[Comparison with the previous term]
While sales were 111.1% of the previous term’slevel, inventory assets were 124.8% of theprevious term’s level or an increase of ¥5.6 billion.
In response to inbound tourism demand in
October and thereafter, inventories wereincreased mainly in promising businesses.
Inventories were maintained at appropriate levels
to increase profitability.
> Treasury stock[Differences from the previous acquisition]
The company acquired treasury stock as part of its
capital policy and efforts to return profits toshareholders. The treasury stock increased by¥620 million.
(Increase of ¥1.71 billion from the end of February2022)> Equity ratio
The equity ratio was kept high, at 69.4%. The
company will continue to consider acquiring moretreasury stock while ascertaining the appropriate
level of its capital structure. It will also continue toinvest in areas with growth potential in an effort tomaintain sustained growth.

５ Initiatives in each area of TIP25

17

TSI Holdings Group’s medium-term management plan “TIP25”
Announced on April 14, 2022 Medium-term management plan materials reposted

H e n c e , t o l e a p t o w a r d 2 0 2 5 , w e h a ve u p d a t e d T I P 2 4 ,t o t u r n i t i n t o t h e T S I I n n o va t i o n P r o g r a m 2 0 2 5 ( T I P 2 5 ) .

TIP25 formulation policy

1

2

3

Capture changes in the social

Align the direction of the entire

Achieve sufficiency in digital

environment and market tocompany with the direction ofengagement, ESGs and highexpress and embody ourbusiness domains to develop

profit, all areas that the stock

existence and purpose

business in new growth domains

market holds dear

18

4 Business domains
Announced on April 14, 2022 Medium-term management plan materials reposted
Wellness & LifestyleWellness & lifestyle

1

Street & Culture

Street & culture

2

AthleisureCreate fashion entertainment that has a

StreetNurture street culture and create fashion

Outdoorpositive impact on the health andCultureentertainment that brings positivity to

L i fe s t y l ehappiness of consumers and, bySelectsociety and the environment.

extension, society.

Fashion Capital3

Fashion capital

L a d y ’s
Fa s h i o n

Refine the experience values of brands
and create fashion entertainment
centered on highly refined tastes.

Digital Generation

Digital generation
Gen-Z
Fa s h i o n
D2C/F2C
DigitalFa s h i o nCreate fashion entertainment for thedigital native generation via digital x
fashion.

4

19

4 Business domains / Brand list

1

Wellness & LifestyleWellness Div.

Lifestyle Div.

1.
2.
3.
4.
5.
6.
7.

1. MARGARET HOWELL
2. MHL.
3. and wander
4. Laline
5. Urth Caffé
6. THE LIBRARY
7. SEVEN BY SEVEN
8. SUNSPEL
9. YLÈVE
10.Quitan
11.Dice&Dice

PEARLY GATESMASTER BUNNY EDITIONJack Bunny!!
new balance golf
PING
NBB WEEKEND
St ANDREWS

Fashion Capital Div.
1.
2.
3.

4.
5.
6.
7.

NATURAL BEAUTY BASICN.
PROPORTION BODY
DRESSING
Apuweiser-riche
Arpege story
CADUNÉ
Mystrada

Street Div.
1.
2.
3.
4.
5.
6.

3

Fashion CapitalSTÜSSYHUF
UNDEFEATEDTACTICSAVIREX
SchottDigital Generation
Digital Generation Div.

8.
9.
10.
11.
12.
13.

JUSGLITTY
Rirandture
ADORE
human woman
LE PHILPINKY & DIANNE

2

Street & Culture

1.
2.
3.
4.
5.
6.
7.
8.

ETRÉ TOKYOMECRE
CHAROL
FREE’S MARTROSE BUDJILLSTUARTJILL by JILLSTUART
hueLe Museum

Culture Div.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

NANO universeB’2nd (GARDEN,吾亦紅)ROYAL FLASH
LHP
MANASTASH
Dorothy Lang
BEAVERUNION TOKYOBAIT
FIGURE
Forget-me-nots

4

20

Wellness & LifestyleCreating attractive communities
Sublimating apparel brands into community brands.
Even after the golf boom, “PING“ achieved substantial growth

Developing entertainment business closely linked to lifestyles.

3Q cumulative sales results

36,472

Net sales¥36.47 Billion

YoY change

119.6％“and wander” received the Good Design Award
The brand “and wonder” received theGood Design Award 2022 for the tent it
had developed in collaboration with theoutdoor brand “muraco.” In this season,
it started to offer its collection of
camping gear. It will step up its efforts tomake comprehensive proposals for not
only camping wear but also a wide
range of camping gear.

32.3%
Ratio
売上高to
total
sales
構成比

Since 2021, PING have continued
1.396 billion yen
steady growth, and in the third quarter,
its cumulative sales achieved over
0.654 billion yen
200% of the previous term’s level.
YoY change
They far exceeded those for the91
millionyen
213.3%
previous year, when golf demand
grew due to the COVID-19 pandemic,
2021
ending Feb. 2022
ending Feb. 2023
ending Feb.
2021年2月期
2022年2月期
2023年2月期
and this made 2022 a year of rapid
growth for the brand.

At the 2023 Fall/Winter Exhibition,
PING took on new challenges toconstantly propose new forms ofentertainment mainly by introducing
AR fitting and smart glasses.

▲ Signage and projection mapping

On January 11, PING entered into an advisory agreementwith Mr. Taiga Semikawa, who became a professional
golfer last year and was attracting public attention.
It will work with the professional golfer, who is expected toplay an active role in the world arena in the future, toconvey the pleasure of golfing to the public, thus raising
the recognition level for the PING brand further.

21

Street & Culture

Platform for play rooted in the street spirit
By extending to the keyword “play,” the platform aims at
spreading itself to neighboring lifestyles, reinventing gears,

and offering new experiences.

Net sales¥41.39 Billion“HUF” put on a grand finale for its anniversary year
41,399YoY change

103.8％

36.7%
Ratio
売上高to
total
sales
構成比

In 2022, which marked the 20th anniversary of the foundation of the brand,
HUF offered collections of fashion items that were developed through various
collaborations, by paying homage to the past ones and representing
contemporary tastes throughout the year. The brand thus livened up various
scenes of marketing.
It will maintain this momentum to open new stores continuously in the springof 2023 and thereafter for aggressive sales.

“UNION” opened its second domestic store in Osaka
In October, UNION opened the UNIONOSAKA store as its third base following theones in Los Angeles and Tokyo. The newstore looks just like a Japanese or Osaka
store while its interior maintains the sense ofunity all UNION stores have.
It aims at developing new sales territories as
UNION’s flagship store in western Japan.

Cumulative domestic and overseas
sales for the third quarter were
▲ At the center of the store stands a
symbol tree that represents bonsai.

236.4%of the previous term’s level22

Fashion CapitalServices that respond constantly to market trends and changes
Being flexible enough to continue changing gracefully, granting“CADUNE” continued to grow despite the spread of the COVID19 pandemic

the wishes of customers, and extending a circle of happiness.
25,467

Net sales¥25.46 Billion

22.6%

YoY change

116.3％

Ratio
to
売上高
total
sales
構成比

“human woman” recovered as it approached its 25th
anniversary

The CADUNE brand, which made its debut in 2020 with women in their 30s to
40s as its target market, constantly continued to grow, and by the end of thethird quarter, its sales exceeded those for the entire previous fiscal year.
Currently, it has three permanent stores, but the percentage of its EC sales isnearly 50%. As shown by these, the brand has garnered support from
customers nationwide.

Changes in sales after the brand’s
debut
3Q cumulative CAGR

700,000

600,000

The brand was left behind in terms of OMO strategy, but by strengthening its
staff content (fashion coordination and LIVE commerce) while making the mostof examples of its success, it increased the ability of its real stores and EC sites
to attract customers. Coupled with the relaxation of COVID-19 restrictions on
the traffic of people, these efforts recovered both sales and profits.

0.45 billion yen

500,000？

400,000

300,000

200,000

The brand will increase thismomentum as it approaches its
25 anniversary in the next term.

101.7%

0.18 billion yen

100,0000

2021年2月期
2022年2月期
2023年2月期
2021
endingFeb. 2022
2022ending
endingFeb.
Feb. 2023
2023ending
endingFeb.
Feb.
2021
endingFeb.
1Q売上高
1Q sales
sales
1Q

2Q売上高
2Q sales
sales
2Q

3Q売上高
3Q sales
sales
3Q

4Q売上高
4Q sales23

Digital Generation

Continuously expanding content to win over the next generation of customers
Obtaining a favorable response and generating strong excitement
through tangible and intangible content that expands infinitely.

“hueLe Museum” offers new encounters and experience
9,560

Net sales¥9.56 Billion

YoY change

109.1％

8.5%

Ratio to
売上高
total
sales
構成比

The real store at GINZA SIX increased the number of
its fans by providing experiences that could only beoffered by the real store, such as providing various
kinds of information content related to art andpersonal styling events. Sales for the third quarter
were excellent, registering 167.1% of the initiallyplanned level.
The brand also actively hosted OMO events with its
momentum having ripple effects on EC sales.

“ETRÉ TOKYO” makes the time spent at home rich
“É BY ETRÉ TOKYO,” which had madeits debut during the current term,
launched new home items. Some of its
kitchen goods were so popular that evenadditionally produced ones were sold out.
Based on its concept “Creating whatleads you to feel rich,” the brandproposes new items from new aspects oflife.

▲Kitchen goods and room wear

The 2023 Spring/Summer Exhibition held at the new head
office was also favorably spoken of, and as a result, thenumber of orders accepted prior to general sales far
exceeded the initially set target.
In the future, the brand will accelerate growth byconcentrating its energies on hosting pop-up shops andopening new stores.

◀ Opening in-store pop-up shops covering awide range of products such as ceramics andjewelry each month24

Digital Generation

Continuously expanding content to win over the next generation of customers
Obtaining a favorable response and generating strong excitement
through tangible and intangible content that expands infinitely.

Through rebranding, two JILLs started with their 2023 S/S Collections
JILL STUART and JILL by JILL STUART being
reborn with a combined concept
The brand purpose and the product design concept werereviewed by analyzing changes in the needs of target womenand the trends of the times.
The two brands, which announced the shared purpose “For abrighter tomorrow than today” across their boundaries, will carryout new initiatives based on the newly defined purpose,including sharing season concept, brand site, and co-hosting
exhibitions.

W/J (with JILL STUART), a project to empower women by
combining the power of various collaboration partners acrossthe boundaries of clothing and fashion, was launched, and planscall for the opening of W/J with JILL STUART (temporary
naming), a concept shop that integrates the two brands.

■ Future developments▲ The two brands co-hosted an exhibition in December. How
the exhibition was going on was posted on the web.

➢ In January 2023, the collaboration plan with “bloomee,” thefirst phase of the W/J project, will begin.
➢ In early February of 2023, sales of the 2023 Spring/SummerCollection will start at EC sites as well as department stores,
fashion buildings, and other outlets nationwide.
➢ Other various marketing measures are planned to be
implemented.

25

Office Concentration Project
The relocation of offices began in September
2022, and the major part of the project has
been completed.
In the next term, the rents are expected to be
reduced by ¥500 million.

▲ Stepping up efforts to communicate information as a

medium of marketing by installing several filming spaces

The company took the opportunity ofoffice relocation to redesign the physicalenvironment of its offices. Through thisrelocation, it will realize creative
workstyles.
▲ Installing an entertainment area in the press roomso that it can be utilized for exhibitions and events

Reprinted from the medium-term management plan (TIP25)

Promotion

MD

Marketing plan
Service/productdevelopmen

Marketing

Receptivity
surveyProduction
EC Research &hypothesis
Plan

Service/
Prototyping product concept– Spiral & agile workstyle:Create a cross-functional
agile team that works in
speedy cycles.
▲ Making communication more lively by employing alayout that effectively uses the free address system

26

×

×

Launching proof of concept(PoC) mainly in the PEARLYGATES brand
The company has started to consider implementing
content services, including planning and operationalverification, in order to realize such services.

The 3D data on clothes TSI manufactures using the 3D
simulation “CLO” are taken into JP GAMES’s
metaverse construction technology frame “PEGASUSWORLD KIT,” which runs on the Alibaba Cloud. Byletting avatars put on such clothes, we conduct
technical verifications of their movements and detailed
nuances such as double-layer looks.

６

Initiatives related to the SDGs

28

SDGs

Specific measures to realize carbon neutrality in 2050
We will review raw materials to promote a shift to low-carbon materials. At the same time, we will invest in the sustainableproduction of raw materials and reuse and recycle clothing resources, thus producing environmentally friendly products.

Material innovation: Initiatives for the evolution of raw materials

We will reduce the amount of virgin polyester we use and increase the amount of recycled polyester andother low-carbon materials we use. In order to realize a sustainable future, we will work with business
partners to help development of materials that have low environmental impacts and respect human rights.
Environmentally friendly production
methods

By working on all processes
from the production to
spinning to selling of organic
cotton using organic farming
technology in an integrated
manner, we will manage
reduction in environmental
impacts and improvement ofworkers’ labor environment ina unified way.

New fibers using food residue

We will develop fibers using
unused agricultural products
such as leaves of pineapples
and stems of bananas for raw
materials.
We aim at improving theincome of farmers andensuring traceability when
producing raw materials.

Recycling of fiber resources

We will collect remnants ofplain cloth left after the
production of products anddiscarded clothing torecycle/upcycle them into
new fibers. By producing
products using such fibers for
raw materials, we will
establish a resource recycling
system.

29

SDGs

Project to develop TSI’s original organic cotton
TSI entered into a business outsourcing agreement with SynCom Agritech, a venture firm in agricultural management. The main themeof the agreement is research to develop TSI’s organic cotton and improve cotton productivity. The trial cultivation of TSI’s own cotton isunder way in the Indian state of Tamil Nadu.
● Future test schedule

Progress in the project・Seeds have already been sown, and three kinds ofcotton have been harvested
Farm soil data were used to analyze problems such as
the lack of nutrients and aridity by taking a scientificapproach. SynCom’s soil improvement method was⬆ Cotton balls harvested
applied in TSI’s test farmland, which was separated from at TSI’s test farmland
ordinary farmland, for soil improvement experiments.
➡ The interim results at the end of November indicatedthat the size of cotton balls grown using SynCom’s
method was around 15% larger than those produced
without extra efforts. In addition, cotton given
abundant nutrients was whiter than ordinary cotton,
an indication of quality improvement.
■ Future R&D goals for TSI and SynCom Agritech

・The second harvest of cotton is scheduled for late
January to early February.
・Production tests covering all processes from thespinning of cotton to the production of plain cloth will be
conducted after selecting suppliers in India.
➡ In the next term, cotton varieties will be chosen again
for practical application to TSI brands

Launching a ginning factory by remodeling the site of a
shut-down local school⬆ Cotton harvested at
farmland other the test area

Figures of scientific correlations between nutrients generated by soil bacteria and the density of
cotton and its whiteness will be calculated. Preliminary discussions about the improvement oflocal producers’ labor environment (health hazards caused by the spraying of agriculturalchemicals, productivity, and training) will also be held.

State of Tamil
Nadu

Local spinning factory and the start ofspinning tests

TSI’s operationbase in India

30

SDGs

Forming business and capital alliances with Food Reborn
In October of last year, TSI concluded a business alliance agreement with Food Reborn, a start-up based in Okinawa
Prefecture.
In January of this year, TSI plans to invest in the start-up after it forms a capital alliance with it. It will step up its efforts todevelop new materials.
Reducing environmental impacts by employing fibers from food residue
廃棄物となっていた、食用にならない残渣を買い取ることで農家に新しい所得をもたらす。
生産者や加工業者などサプライ
チェーンのトレーサビリティに対する課題にも積極的にチャレンジしていく。

サステナブルな原材料の開発サポート、食物残渣を利用した繊維の生地を使用した製品
開発によってサステナビリ
ティを向上させていく。

Leaves ofpineapples
We bring new income to farmers
by purchasing food residue thatwas formerly left uneaten andthrown away as waste. We will
actively take on new challenges tocope with problems in the
traceability of supply chains,
including producers andprocessors.

Extracting fibers
from the leaves

Processing the fibers
Producing threads of fibers
Plain cloth of fibers fromextracted
fromfoodresiduefood residue
低環境負荷かつ、量産を実現
繊維抽出機の原料繊維からWe succeeded in developing a
開発・組立させる繊維集出装置の小型化
Development andProduction of
We will increase sustainability糸を作る
smaller fiber extraction system that
assembly of the fiber threads using fibers
has less environmental impacts andfor raw materials
extraction systemenables mass-production. Since it
can produce fibers at farms, thissystem helps reduce CO2 emissions
in the process of logistics, including
the transport of materials to factories
2
for processing.

に成功。農場で繊維化できる機器であることから、加工のため工場に運搬するなど物流にかかるCO を削減。

by supporting the developmentof sustainable raw materials
and developing products thatuse plain cloth of fibers which
employ food residue.

Food Reborn’s website: https://food-reborn.co.jp

31

SDGs

Working with Seni-Ikueikai to establish a system to recycle fiber resources
Remnants of plain cloth generated at the time of production and discarded clothing are collected and upcycled into new
cloth. TSI will treat limited resources carefully and implement projects friendly to the global environment.

Material innovation: Initiatives for the evolution of raw materials
Using recycled fibers for productsCollection of discarded fiber resources▲ Remnants ofplain cloth▲ Collection ofclothes at stores

Utilizing recycled fibers for store
fittings and in-company interior
decorations《Initiatives資源循環
with Seni-Ikueikai》

Reborn as recycled fibers

Crushing collected
Upcycled into
clothes and remnants recycled fibersof plain cloth

Reborn as boards of recycled fibers

Used as raw
materials for cloth

Boards are produced bycrushing collected waste
clothing and remnants of plain
cloth and coating them withresin. After they are used, they
are coated again and reborn as
new boards.
Seni-Ikueikai’s website: http://seni-ikuei.org

７

Full-year Forecast

33

Full-year Forecast
In December, as commercial facilities recovered, the women's and street brand businesses, TSI’s key businesssectors, continued to report financial results as correction planned.
The prospects of consolidated financial results for the whole year, which were revised upward on October 12,
2022, will not be changed.
FY Ending Feb. 2023
Full-year Forecast

Plan(Billion Yen)

Composition Rate
（%）

154.0

100%

Operating Profit

1.8

1.2%

Ordinary Income

3.3

2.1%

Profit Attributable to
Owners of Parent

2.4

1.6%

Net Income Per Share¥27.63

Net SalesNurture worldwide empathy and social value through the power of fashionentertainment.

A company creating fashion entertainment8Reference Data

36

Highlights of Q3RD Results for FY Ending Feb. 2023
Unit:Million Yen

Overview(Revenue recognition standards)

Q3RD 2022 Ending
Feb.
*1

Q3RD 2023 Ending Feb. ※2*2

Results

Composition
Rate (%)

Results

Composition
Rate (%)

Net Sales

39,163100.0

43,318

100.0

4,154

110.6

Gross Profit

22,69658.0

24,631

56.9

1,935

108.5

SG&A Expenses

18,64947.6

21,493

49.6

2,843

115.2

17,62645.0

20,683

47.7

3,056

117.3

Goodwill Amortization

198

0.5

127

0.3

-70

64.5

Depreciation and Amortization

824

2.1

682

1.6

-142

82.7

Operating Income

4,046

10.3

3,137

7.2

-908

77.5

Ordinary Income

4,236

10.8

3,169

7.3

-1,06774.8

Extraordinary Income

120

0.3

99

0.2

-21

82.1

Extraordinary Loss

467

1.2

433

1.0

-34

92.7

Profit Before Taxes

3,889

9.9

2,834

6.5

-1,054

72.9

Profit Attributable to Owners of Parent

3,575

9.1

2,372

5.5

-1,203

66.3*3
EBITDA ※

5,069

12.9

3,947

9.1

-1,121

77.9

SG&A Expenses(excl. Goodwill Amortization,
Depreciation and Amortization)*1The old revenue recognition standards were applied to the term ended February 2022.
*2The new revenue recognition standards are applied to the term ending February 2023.
*3 EBITDA＝Operating Income + Goodwill Amortization + Depreciation and Amortization

Y/Y
ChangeY/Y (%)

37

Highlights of Cumulative Q3RD Results for FY Ending Feb. 2023

Overview(Revenue recognition standards)

Unit:Million Yen
Cumulative Q3RD 2022
*2
Ending Feb. *1
Results

CompositionRate (%)

Cumulative Q3RD 2023 Ending Feb. ※2

Results

Composition
Rate (%)

Y/Y
ChangeY/Y (%)Net Sales

103,915

100.0

115,406

100.0

11,491

111.1

Gross Profit

57,99155.8

65,366

56.6

7,375

112.7

SG&A Expenses

52,81050.8

61,639

53.4

8,829

116.7

49,86548.0

58,608

50.8

8,743

117.5

587

0.6

345

0.3

-241

58.9

2,357

2.3

2,685

2.3

327

113.9

Operating Income

5,180

5.0

3,726

3.2

-1,453

71.9

Ordinary Income

6,239

6.0

5,061

4.4

-1,17781.1

Extraordinary Income

1,563

1.5

972

0.8

-591

62.2

Extraordinary Loss

1,535

1.5

682

0.6

-853

44.4

Profit Before Taxes

6,268

6.0

5,352

4.6

-915

85.4

Profit Attributable to Owners of Parent

5,465

5.3

4,621

4.0

-843

84.6

EBITDA *3

8,125

7.8

6,757

5.9

-1,367

83.2

SG&A Expenses(excl. Goodwill Amortization,
Depreciation and Amortization)
Goodwill Amortization
Depreciation and Amortization*1The old revenue recognition standards were applied to the term ended February 2022.
*2The new revenue recognition standards are applied to the term ending February 2023.
*3 EBITDA＝Operating Income + Goodwill Amortization + Depreciation and Amortization

38

Highlights of Cumulative Q3RD Results for FY Ending Feb. 2023

Net Sales
Per Channel(Revenue recognition standards)

Unit:Million Yen
Cumulative Q3RD 2022
Ending Feb. *3

Cumulative Q3RD 2023 Ending Feb. ※4*4Composition
Rate Y/Y
Change(pt)Results(Million yen)

Composition
Rate (%)

Results(Million yen)

Composition
Rate (%)

Department Stores

10,53910.1

15,211

13.2

144.3

+3.0

Commercial Facilities(*1)

44,94943.3

49,930

43.3

111.1

+0.0

In-house EC

13,332

12.8

13,244

11.5

99.3

-1.4

3rd Party

15,062

14.5

14,903

12.9

98.9

-1.6

E-Commerce

28,39527.3

28,147

24.4

99.1

-2.9

Others(*2)

12,23311.8

11,955

10.4

97.7

-1.4

Domestic

96,11792.5

105,244

91.2

109.5

-1.3

E-Commerce

2,372

2.3

2,922

2.5

123.2

+0.2

Overseas

7,797

7.5

10,161

8.8

130.3

+1.3

E-Commerce TOTAL

30,76729.6

31,070

26.9

101.0

-2.7

TOTAL

103,915

100.0

115,406

100.0

111.1

-

Y/Y (%)*1 Fashion buildings, shopping centers, railroad station buildings, individual stores, outlet shops etc. except for department stores.
*2 Apparel businesses such as wholesale, intercompany sales and non-apparel businesses of the group companies.
*3 The old revenue recognition standards were applied to the term ended February 2022.
*4The new revenue recognition standards are applied to the term ending February 2023.

39

Highlights of Cumulative Q3RD Results for FY Ending Feb. 2023

Brands Overview(Revenue recognition standards)
Unit:Million Yen*1
Cumulative Q3RD 2022 Ending Feb.

Sales

Composition
Rate (%)

Gross Profit
Ratio (%)

Cumulative Q3RD 2023 Ending Feb.

Sales

Composition
Rate (%)

Gross Profit
Ratio (%)

*2

Sales (%)

compared toyear before last

Y/Y
Gross Profit
Ratio (pt)Sales (%)

Gross Profit
Ratio (pt)1.

PEARLY GATES

11,804

11.4

62.3

13,429

11.6

61.6

113.8

-0.6

144.6

+9.2

2.

NANO universe

12,45112.0

50.1

10,308

8.9

53.2

82.8

+3.1

74.1

+9.3

3.

MARGARET HOWELL

8,190

7.9

67.4

9,500

8.2

65.9

116.0

-1.5

150.2

+12.3

4.

NATURAL BEAUTY BASIC

7,876

7.6

59.8

8,433

7.3

63.9

107.1

+4.1

103.1

+15.0

5.

HUF

4,640

4.5

51.2

7,744

6.7

50.6

166.9

-0.7

246.4

+4.0

6.

AVIREX

4,303

4.1

61.4

4,853

4.2

64.7

112.8

+3.3

116.4

+5.1

7.

new balance golf

2,698

2.6

58.3

3,527

3.1

51.7

130.8

-6.6

181.7

+12.5

8.

UNDEFEATED

3,508

3.4

41.3

3,481

3.0

39.5

99.2

-1.8

123.8

+0.2

9.

human woman

2,332

2.2

59.2

3,349

2.9

65.0

143.6

+5.9

144.7

+15.0

10.

STUSSY

3,356

3.2

69.8

3,335

2.9

65.0

99.3

-4.8

98.3

+0.5

TOP10

61,162

58.9

58.3

67,964

58.9

58.9

111.1

+0.6

122.5

+9.1

Other Brands

41,37839.8

52.6

46,760

40.5

53.5

113.0

+1.0

126.2

+7.3

Continuing Brands

102,541

98.7

56.0

114,724

99.4

56.7

111.9

+0.7

124.0

+8.3

1,373

1.3

43.8

681

0.6

50.3

49.6

+6.5

14.5

+7.5

103,915

100.0

55.8

115,406

100.0

56.6

111.1

+0.8

118.7

+8.6

Closed Brands
TOTAL*1The old revenue recognition standards were applied to the term ended February 2022.
*2The new revenue recognition standards are applied to the term ending February 2023.

40

Highlights of Cumulative Q3RD Results for FY Ending Feb. 2023

Domestic Monthly Sales Information
Cumulative Q3RD 2022 Ending Feb.
All Stores：103.6％
Existing Stores：98.4％

Cumulative Q3RD 2023 Ending Feb.
All Stores：101.3％
Existing Stores：102.6％

41

Highlights of Cumulative Q3RD Results for FY Ending Feb. 2023

The Number of Stores
Store
Close

Cumulative
Q3RD 2023
Ending Feb.

+33

-59

779

-67

-26

41

-

-12

29

-18

-12

893

846

+33

-71

808

-85

-38

Domestic

7

7

+1

-

8

+1

+1

Domestic

36

36

+4

-3

37

+1

+1

936

889

+38

-74

853

-83

-36

Q3RD 2022
Ending Feb.

FY EndingFeb. 2022

Domestic

846

805

Overseas

47

合計
Restaurant
Cosmetics

Apparel

Total

Store
Open

Y/Y
ChangeQ3/Q4
Change・Descriptions about future within this document are based on the information that the company obtains on the date of this report andcertain assumptions deemed to be reasonable. Actual earnings may differ materially from various future factors.
・This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between thistranslated document and the Japanese original, the original shall prevail.