TSI HOLDINGS CO., LTD.
Q1 Financial Results Briefing for the Fiscal Year Ending February 2023
July 14, 2022

Event Summary[Company Name]TSI HOLDINGS CO., LTD.

[Company ID]

3608-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Q1 Financial Results Briefing for the Fiscal Year Ending February 2023

[Fiscal Period]

FY2022 Q1[Date]

July 14, 2022

[Number of Pages]

6[Time]

10:00 – 10:44(Total: 44 minutes, Presentation: 30 minutes, Q&A: 14 minutes)[Venue]Webcast[Venue Size][Participants]

76[Number of Speakers]

2Tsuyoshi Shimoji
Jun Imaizumi

SupportJapanTollfree

050.5212.7790
0120.966.744

North America
Email Support

President and CEO
Senior Executive Officer/TIP Promotion,
Department Manager and TSI TIP Promotion,
Division Manager and Division Innovation
Section Manager

1.800.674.8375
support@scriptsasia.com
1Question & Answer
Hasegawa [Q]: Let us get into the Q&A session. Thank you for your cooperation.
Thank you, Nagamatsu of Senken Shimbun Co., Ltd. The question is, can you tell us a little more about working
with Sitateru? Which do you prioritize in this effort at first? Are you going to upgrade production infrastructure
network for Shitateru, or aim to create a new business for TSI?
Jun Imaizumi, will answer first. After that, if there is anything to add, President and CEO, Tsuyoshi Shimoji, willanswer. Thank you.
Imaizumi [A]: This is Imaizumi. As for your question, regarding the conversion of Yonezawa into a motherfactory and the production networking of Sitateru, Yonezawa has been a smart factory in the past, and wehave been trying to introduce digital sewing machines and automatic cutting machines and have accumulated
knowledge there.
On the other hand, what Sitateru has in mind is that by connecting the so-called ERP-like linkage function thatconnects the factory and the manufacturer, We think the Yonezawa factory itself can first of all be utilized in
TSI's new business. Beyond that, we are currently envisioning that the Yonezawa factory itself will be used asa network to accept work from other companies using the Sitateru factory.
Hasegawa [M]: Thank you. Shimoji, if you have anything to add.
Shimoji [A]: This is Shimoji. First of all, we have a feeling of expectation about this alliance. Until now, it's notjust from the awareness of the apparel side of things, where the apparel side has a factory at the production
site. We are very much working on the possibility of creating new products through the use of various
networks. We will continue to create with an overall view from now on, but we will start from a small place
and work on the branding and the link between our customers and our factories. Meanwhile, one of the firsttrials is to assemble a single brand. We will do this so that we can deliver products that meet the needs of ourcustomers, with a greater sense of urgency and quality, and that fit their needs in terms of size and fitting.
Hasegawa [Q]: Thank you. Nagamatsu, is that all? Thank you.
Now, we have two questions from Nozawa of Daiwa Securities Co., Ltd. First, regarding the rebranding of theNANO universe. What are the specific initiatives for the NANO universe price review, EC strategy, and in-store
sales structure? We were also asked to provide a sense of a timeline for the price review, in terms of whether
it will be reflected and take effect starting with this fiscal year's fall/winter products.
The second question is the impact of the yen's depreciation and raw material price hikes since Q2. Comparedto the plan at the beginning of the period, I believe there are many effects including yen depreciation, COVID19, and price increases, but we were asked about future measures and ideas for price revisions.
Shimoji will answer this question.
Shimoji [A]: Thank you for your question. This is regarding the rebranding of NANO universe. In fact, NANO
universe has a fairly wide range of price points, and the balance of these price points has not yet been sorted
out, so we intend to further improve the precision of the balance of price points to meet market needs.
Therefore, we will deepen and increase the volume of products that people need on a daily basis, including inthe shape of EC. And prices were still very much lacking in terms of the volume of the product mix at somewhat
SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
2affordable prices. Also, there were delays in delivery from overseas, so we are making very detailed
corrections in those areas.
We also provide more detailed support for high-unit-price purchased products and domestically produced
items that are rebranded from within Japan. We have redesigned the organization as a more pleasant viewing
experience, with the top products related to those products narrowed down. Simply put, we are changing thezoning and balance of each price range, with the first step being to increase the volume of low-priced items.
I hope you can accept this imagining.
Regarding the revision of product prices, there is the depreciation of the yen. I believe that an increase in raw
material prices is unavoidable, and that the impact of the exchange rate is still quite large. We naturally see
the possibility of the rate coming in around the JPY140 level, so the impact of price will be substantial.
However, we do not believe that we should charge prices that are not appropriate for our products, so wewill concentrate on how we can provide service and add to the design quality of our products while
maintaining a price range that is acceptable to our customers. Therefore, we have the idea that we will
respond, in part, by product by product, rather than by an overall increase in price. That is all.
Hasegawa [M]: Thank you. Nozawa, how was the answer? Are there any additions?
Nozawa [Q]: Thank you for your detailed answer. I would like to know some additional information regarding
NANO universe in the first question. In detail, in Q1, regarding NANO universe, do you see any excess in thecurrent inventory levels after struggling a bit? Since NANO universe has a high sales-composition ratio, let mejust confirm here whether there is a possibility that in the future, Q2 or later, if there is a sense of overstocking,the gross profit margin will be hurt by consuming it with discounts. Thank you.
Shimoji [A]: With regard to inventory, since last year and the year before, we have been working to narrow
down the contents of the inventory by preparing it considerably, so there has not been a major impact. In thissense, we are trying to avoid a situation where we end up with a large valuation loss, so the situation is being
scrutinized very closely. We are in the process of making improvements where the balance of the price system
was very ineffective.
Nozawa [M]: I see. Thank you.
Shimoji [M]: Thank you.
Hasegawa [Q]: Thank you. Are there any other questions? Thank you, Obayashi from The Nihon Keizai
Shimbun. How do you see the sales impact of the current re-spread of COVID-19? This is also for Shimoji.
Shimoji [A]: We are naturally concerned about the impact of COVID-19, but we are also of the view that thisis not a situation that will be halted in any way as a matter of national policy. Naturally, we need to increase
EC sales as well, so we are in the process of preparing for the enjoyment of new fashions while developing
sufficient measures to deal with COVID-19.
Therefore, for the fall and winter, we are working on a way to give a good look of the inexpensive items earlier
in the year. Basically, we expect the lingering summer heat to continue for a long time, and at that time, wewould like to gradually enter the fall/winter season starting with items that are still easy to purchase.
Hasegawa [M]: Thank you. Now, are there any additional questions?
Nagamatsu [Q]: Excuse me, this Nagamatsu from Senken Shimbun. I had a little trouble hearing you, but wereyou talking about creating a specific brand in collaboration with Sitateru?

SupportJapan
Tollfree050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
3Imaizumi [A]: This is Imaizumi. In our collaboration with Sitateru, we envision an F2C trial first. We are
currently selecting brands to be converted to F2C, and we believe that F2C using these brands will be our firstinitiative.
Nagamatsu [Q]: Does that mean existing brands?
Imaizumi [A]: Yes, that is correct.
Nagamatsu [M]: I understand. Thank you.
Hasegawa: Thank you. Are there any other questions?
The one-on-one meeting in IR will start later, so please contact Yamada or me, Hasegawa, in the Public
Relations/IR office.
With that, I would like to conclude the financial results briefing. Thank you.
Shimoji [M]: Thank you.
Imaizumi [M]: Thank you.
[END]______________
Document Notes
1.
2.
3.
4.

SupportJapanTollfree

Portions of the document where the audio is unclear are marked with [Inaudible].
Portions of the document where the audio is obscured by technical difficulty are marked with [TD].
Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides ananswer from the Company, or [M] neither asks nor answers a question.
This document has been translated by SCRIPTS Asia.

050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
4Disclaimer
SCRIPTS Asia reserves the right to edit or modify, at its sole discretion and at any time, the contents of thisdocument and any related materials, and in such case SCRIPTS Asia shall have no obligation to provide
notification of such edits or modifications to any party. This event transcript is based on sources SCRIPTS Asia
believes to be reliable, but the accuracy of this transcript is not guaranteed by us and this transcript does notpurport to be a complete or error-free statement or summary of the available data. Accordingly, SCRIPTS Asiadoes not warrant, endorse or guarantee the completeness, accuracy, integrity, or timeliness of theinformation contained in this event transcript. This event transcript is published solely for information
purposes, and is not to be construed as financial or other advice or as an offer to sell or the solicitation of an
offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.
In the public meetings and conference calls upon which SCRIPTS Asia’s event transcripts are based, companies
may make projections or other forward-looking statements regarding a variety of matters. Such forwardlooking statements are based upon current expectations and involve risks and uncertainties. Actual results
may differ materially from those stated in any forward-looking statement based on a number of importantfactors and risks, which are more specifically identified in the applicable company’s most recent public
securities filings. Although the companies may indicate and believe that the assumptions underlying theforward-looking statements are accurate and reasonable, any of the assumptions could prove inaccurate orincorrect and, therefore, there can be no assurance that the anticipated outcome described in any forwardlooking statements will be realized.
THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLEPUBLIC MEETING OR CONFERENCE CALL. ALTHOUGH SCRIPTS ASIA ENDEAVORS TO PROVIDE ACCURATETRANSCRIPTIONS, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THETRANSCRIPTIONS. IN NO WAY DOES SCRIPTS ASIA OR THE APPLICABLE COMPANY ASSUME ANYRESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BY ANY PARTY BASED UPON ANY EVENTTRANSCRIPT OR OTHER CONTENT PROVIDED BY SCRIPTS ASIA. USERS ARE ADVISED TO REVIEW THEAPPLICABLE COMPANY'S PUBLIC SECURITIES FILINGS BEFORE MAKING ANY INVESTMENT OR OTHERDECISIONS. THIS EVENT TRANSCRIPT IS PROVIDED ON AN "AS IS" BASIS. SCRIPTS ASIA DISCLAIMS ANY ANDALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OFMERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWAREERRORS OR DEFECTS, AND ACCURACY, COMPLETENESS, AND NON-INFRINGEMENT.
None of SCRIPTS Asia’s content (including event transcript content) or any part thereof may be modified,
reproduced or distributed in any form by any means, or stored in a database or retrieval system, without theprior written permission of SCRIPTS Asia. SCRIPTS Asia’s content may not be used for any unlawful orunauthorized purposes.
The content of this document may be edited or revised by SCRIPTS Asia at any time without notice.
Copyright © 2022 SCRIPTS Asia Inc. (“SCRIPTS Asia”), except where explicitly indicated otherwise. All rights
reserved.

SupportJapanTollfree

050.5212.7790
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
5