Results
Results

Briefing: Q3RD
of 2022 Ending

17th January, 2022

(MarchFeb.

toNovember

2021)

AGENDA

1 Results Overview
2 About Business Situation by Channel
3 Q3RD Business Situation
4 About Balance Sheet
5 About Full-year Forecast
6 Mid-term Management Plan and Action on SDGs

7 Reference Data

2

Covid-19 Impact on Q3RD Results of 2022 Ending Feb.
The third quarter started in a harsh business environment due to the fifth wave of the COVID-19 pandemic. However, thenumber of store closures and shortened opening hours reduced thanks to the temporary end of the pandemic in late
September and beyond. Store opening hours returned to 97% of the normal period in November, leading to a gradual
recovery in the performance of physical stores.
To survive the sixth wave of the pandemic, we will continue to maintain an operational posture specially established for
the COVID-19 pandemic.

Number of new infections nationwide
30000

A record high of new infections
on July 28, 2021 and
25000
The infections increased after that, too.
20000
15000

１万人以上
Over 10,000
５千人以上
Over 5,000
Less than 5,000
５千人未満

Q3 (September - November) 02/FY22
The declaration of a state of emergency and priority
measures for prevention of the spread of the COVID-19
were removed in all prefectures on September 30, 2021.

The number of new infections
exceeded 10,000 on January 12, 2022.
It is hard to be optimistic in the fourth
quarter as well.

10000
5000
0

2021/7/1

2021/8/1

2021/9/1

2021/10/1

2021/11/1

2021/12/1

2022/1/1

September 13 Although the declaration of a state of emergency had been applied to 21 prefectures, the period was extended for 19 prefectures,and the rest of 2 prefectures shifted to priority measures for COVID-19 spread prevention.
September 30 The declaration of a state of emergency and priority measures for COVID-19 spread prevention were removed in all prefectures.
October 4
The number of new infections fell below 100 persons in Tokyo for the first time in 11 months.

1

Results Overview

4Highlights of Results for Q3RD of Fiscal Year Ending in February 2022
Sales fell by 1.78 billion yen YoY due to the impact of the fifth wave of COVID-19 pandemic until
September 2021, limited discount sale of products (one of our sale strategies), and other factors. Salesof current businesses reached 101.4% (excluding closed brands in the previous year).
Operating profit significantly increased by 1.84 billion yen thanks to improvement in gross profit
margin and reduction of S&G expenses.

Q3RD
Net Sales

Q3RD
Operating Profit

Q3RD
Net Income

39.16 Billion Yen

4.04 Billion Yen

3.57 Billion Yen

YoY 95.6%

YoY +1.84 billion yen

YoY +0.26 billion yen

YoY Change -1.78 billion yen

Compared to year before last
Change +1.94 billion yen

Compared to year before last
Change -0.19 billion yen

5Highlights of Results for Cumulative Q3RD of Fiscal Year Ending in February 2022
Keeping a strong eye on the market and economic trends, we have continued to maintainthe balance of positive and negative approaches for our business. In terms of cumulative
results as of Q3RD, gross profit was higher than that of pre-COVID-19 pandemic.
We will strive to slow down or accelerate the speed of business operation and investment
towards the future, while keeping in mind the spread of Omicron variant.
Cumulative Q3RDNet Sales

Cumulative Q3RD
Operating Profit

Cumulative Q3RDNet Income

103.91 Billion Yen

5.18 Billion Yen

5.46 Billion Yen

YoY +13.45 billion yen

YoY +16.59 billion yen

Compared to year before last
Change +3.24 billion yen
Compared to year before last 267.0%

Compared to year before last
Change +0.64 billion yen
Compared to year before last 113.0%

YoY 106.9%
Compared to year before last
Change 82.6%

6

Gross Profit/SG&A Expenses for Cumulative Q3RD Results of 2022 Ending Feb.
Unit : Billion yen

Gross Profit

第３四半期累計
Cumulative
Q3RD
売上総利益
Gross
Profit57.99
Billion
Yen
579.9
億円
YoY 124.1%
前期比124.1%
Compared to year before
前々期比
84.6%
last 84.6%
YoY前期差Change＋112.5億円+11.25 billion
yen

700

55.8%

55.8%
54.9%

650

56.0%

54.5%

600
54.0%

550
500

64.3

64.5

68.5
52.0%

46.7

400

50.0%
Q3RD

Q3RD

Q3RD

Q3RD

Q3RD

650

52.81
Billion Yen
528.1
億円

600

前期比
96.0%
Compared
to yearbeforelast 79.3%
前々期比
79.3%
YoY
Change▲-2.20
billion
前期差
22.0億円

500

YoY 96.0%

yen

550

450

53.1%

 Improved profit by 11.2 billion Yen> SG&A expenses

56.6%

700

SG&A販管費
Expenses

high added value.

Ending Feb.
Ending Feb.
Ending Feb.
Ending Feb.
Gross Profit
売上総利益
売上総利益率Gross Profit Margin

SG&A Expenses

第３四半期累計
Cumulative
Q3RD• Profitability improved due to limited discounts.

compared to last year

18年2月期19年2月期20年2月期21年2月期22年2月期
2018
2019
2020
2021
2022
Ending Feb.

• Purchases were curbed by 95.1% YoY and78.8% compared to the year before last.
→ Allowing for the recovery of inventory
valuation loss

• Our business structure has been reinforced with
58.0

450

> Gross Profit

52.1%

58.0%

• Review of rent and guarantee during the store closing

50.8%

52.9%

• Review of payroll system and bonus for employees

53.0%

period• Review of work system at stores and headquarters

66.6
61.1

61.2

48.0%

55.0
Q3RD
18年2月期
2018
Ending Feb.

Q3RD
19年2月期
2019
Ending Feb.

logistics carriers

52.8

Q3RD
20年2月期
2020
Ending Feb.

Q3RD
21年2月期
2021
Ending Feb.

Q3RD
22年2月期
2022
Ending Feb.

SG&A
販管費
Expenses

SG&A Expenses
販管費率
Rate

• Improvement of transportation costs by changing• Recovery of sales and continuing previous year’s level

43.0%

of expense reduction

 5.8% improvement compared to last

year

7

Operating Profit Transition Expenses for Cumulative Q3RD Results of 2022 Ending Feb.

In the midst of the COVID-19 pandemic, we have achieved the highest operating
profit as of the end of the third quarter.

Unit : Billion yen

Changing Balance of TSI’s Profit for the 1st Half and 3Q

Main factors

5.18

60

To improve profitability in the 1st half, we havereviewed a revenue structure that tends to achieve a

3.18

40

3.31

4.05

3.49

3.08

1.94

higher profit in the 2nd half.

2.20

2.10
20

1.13

Brand businesses such as golf, skateboarding, and athleisure brands,
0.1

which generate high profit in the spring and summer seasons, contributed

0

-0.19

to the overall growth of the revenue structure.

-0.16

-20

The investment was made for stores that have achieved good standing-8.27

results according to their profitability.
-40

The sales of the new stores were almost well, even if they began
operating in the midst of the COVID-19 pandemic.

-10.46-60

2018 Ending

18年2月期Feb.

EBITDA ¥8.12 billion / EBITDA Rate 7.8%

2019 Ending

19年2月期Feb.

上期 営業利益
1ST Half
Operating Profit

2020
20年2月期Ending Feb.

3Q単体
営業利益
Q3RD
Operating Profit

2021

21年2月期Ending Feb.

2022

22年2月期Ending Feb.

Cumulative
3Q累計
営業利益

Q3RD
Operating Profit

8

Net Income Impact Items for Cumulative Q3RD Results of 2022Ending Feb.
Ordinary income was 6.23 billion yen including non-operating income of 1.48 billion yen due to dividend income /real
estate income, etc.
Extraordinary income reached 1.56 billion yen due to gain on sales of marketable securities, gain on sales of fixed
assets, etc. COVID-19 impacts caused loss due to temporary closing -1.5 billion yen, posting quarterly net income of

5.46 billion yen and a profit margin of 5.3%.

Q3RD
Operating Profit

5.18 Billion yen

・Dividend income 0.55
・Equity method return on
investment 0.06
・Foreign exchange income 0.23
・Real estate income 0.21

5.46 Billion yen
Compared to year before last
Change +6.44 billion yen
YoY Change +16.59 billion yen

Unit : Billion Yen

1.56

-1.53

-0.42

Compared to year before last
Change +3.24 billion yen
YoY Change +13.45 billion yen

Q3RD
Net Income

・ Gain on sale of investment securities 0.8
・ Gain on sales of non-current assets 0.39

-0.8

1.48
・ Rental expenses onreal estate 0.11
・ Interest expenses 0.08

5.18

・ Loss due totemporary closing 1.19

5.46
Net profit
margin5.3%

Operatingprofit margin
5.0%

OperatingincomeNon-operating
incomeNon-operating
expenses

Ordinary Income 6.23

Extraordinary
incomeExtraordinary
lossesProfit Before Taxes 6.26

Income taxes
deferred

Net income attributableto owners of parent

Quarterly Net Profit 5.46

２

About Business Situation by Channel

10Sale Trends by Channel for Cumulative Q3RD Results of 2022 Ending Feb.

During the COVID-19 pandemic, we have adopted a strategy that focuses on profitability rather thansales volumes. As a result, revenue has improved, but sales can grow further.
•••

Department stores/Commercial facilities: Growth rate remained strong at 109% YoY even with a lower speed of recovery compared to year
before last
E-commerce: Profitability improved due to limited discounts on e-commerce stores operated by other companies, but sales remained stable
at 98% YoY. This is also due to disruption of some foreign supply chain.
Overseas: Growth rate went well at 123.8% compared to year before last and at 125.7% YOY due to strong performance of online shoppingsite TACTICS operated in the U.S.

Cumulative Q3RD
2020 Ending Feb.
Department
StoresDome
stic

Commercial
Facilities(*1)

E-Commerce
Domestic Others(*2)

Overseas(*3)

16.47 Billion Yen(Composition Rate (%)：13.1)

64.19 Billion Yen(Composition Rate (%) ：51.0)

25.37 Billion Yen(Domestic E-Commerce ratio(％)：23.9)

13.48 Billion Yen(Composition Rate (%) ：10.7)

6.29 Billion Yen(Composition Rate (%) ：5.0)

Cumulative Q3RD
2021 Ending Feb.

9.39 Billion Yen(Composition Rate (%) ：9.7)

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

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

11.11 Billion Yen(Composition Rate (%) ：11.4)

6.20 Billion Yen(Composition Rate (%) ：6.4)

Cumulative Q3RD
2022 Ending Feb.

Growth by channel
compared to year
before last (%)

YoY (%)

10.53 Billion Yen

64.0

112.1

44.94 Billion Yen

70.0

108.3

28.39 Billion Yen

111.9

98.0

Composition Rate (%) ：11.8

12.23 Billion Yen

90.7

110.1

7.79 Billion Yen

123.8

125.7

Composition Rate (%) ：10.1

Composition Rate (%)：43.3

Domestic E-Commerce ratio(％)：33.9

Composition Rate (%) ：7.5

*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.

11

Operating income Revenue structure by segment for Q3RD Results of 2022 Ending Feb.

Strong Business in Japan•••

Golf and street brands continued to drive profit.
A thorough structural reform has launched for our two leading brands: nano･universe and NATURALBEAUTY BASIC that failed to go well in the 1st half. Profitability for Q3RD was higher than that of theprevious year and year before last.
Ladies’ brand business with a higher percentage of e-commerce remained strong performance as it
quickly shifted to an OMO approach.

Summary of strong
domestic business results
Net Sales

23.98
Billion Yen

Operating
IncomeOperating
Profit3.85
Billion Yen

16.1%

Demodulationof key brands

12

E-commerce Sales Performance for Q3RD Results of 2022 Ending Feb.

• The domestic EC ratio was at 33.9% with +10pt compared to year before last, but gross sales
growth rate stepped up at 98.0% YoY due to the impact of some brand closure.

• The in-house EC ratio significantly grew to 47.0% while ensuring high profitability.
• Overseas EC sales grew 108.5% YoY.

■E-commerce Sales Summary

In‐house EC(ratio(％))
Domestic E‐Commerce(ratio(％)) ※１
Overseas E‐Commerce(ratio(％)) ※２

Unit : Billion Yen

2020 EndingFeb.

2021 EndingFeb.

2022 Ending
Feb.

7.76

12.57

13.33

171.7%

106.0%(30.6)(43.4)(47.0)(+16.3pt)(+3.5pt)

Compared to year
before last

Y/Y■In-house EC Ratio
The in-house EC ratio has grown due to ourstrengthened services such as LIVE commerce, online
customer services, and staff fashion styles.
400

In‐house

350

25.37

28.98

28.39

111.9%

98.0%(23.9)(36.3)(33.9)(＋9.9pt)(▲2.4pt)

0.55

2.18

2.37

428.9%

108.5%(8.8)(35.2)(30.4) (＋21.6pt)(▲4.8pt)

300

自社EC
EC

25.37

Unit : Billion Yen

3rd

他社EC
Party

28.98

28.39

43.4%

47.0%

250

200

150

100

E‐Commerce TOTAL(ratio(％))※１

25.92

31.16

30.76 118.7%

98.7%(23.1)(36.2)(33.6) (＋10.5pt)(▲2.6pt)※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.

50

30.6%

0

Cumulative

Cumulative

Cumulative

2020年2月期
Q3RD

2021年2月期
Q3RD

2022年2月期
Q3RD

2020
Ending
3Q累計
Feb.

2021
Ending
3Q累計
Feb.

2022
Ending
3Q累計
Feb.

13

Supply Chain Disruption / Impact on Gain for September through November■ The third quarter was the largest disruption period. The impact on the entire company wasminor but it is necessary to continuously pay attention on the influence.
••

In Asian and Southeast Asian countries where TSI’s key production bases are located, supply chain has
been disrupted due to factory closure, energy shortage, limited level of port handling operations, and otherissues that arised as a result of re-spread of COVID-19 infection.
The disruption has affected some of our brands, primarily STARJOINUS, which rely on global companies
for distribution and procurement of products.

STARJOINUS Quarterly Sale & YoY Change for 02/FY22
1,8 00,000

160 .0%

1,6 00,000
150 .0%

1,4 00,000

153.2%

140 .0%121.3%

1,2 00,000

130 .0%1,0 00,000

110.6%

800 ,000

120 .0%110 .0%600 ,000

100 .0%400 ,000

90. 0%
200 ,0000

80. 0%

Q1ST
1Q

Q2ND
2Q
Net
当期売上高
Sales

Q3RD
3Q
前期比
Y/Y

The results of the 1st half significantly contributed to the growth ofthe company’s overall sales due to a drastic increase in EC businesssales. There had been a significant delay in the delivery of sneakers,
one of our leading products, from the U.S. since mid-August, leading
to the steady growth of sales. We have corrected our production andsale plan mainly in the part of our original products. The revenue
structure is going well.

14

Street Category for Cumulative Q3RD Results of 2022 Ending Feb.

HUF JAPAN significantly went well. Even during the COVID-19 pandemic, we havecontinued to achieve further growth with a focus on e-commerce strategy.
■ Ensuring continuous growth and sales channel
exchange in the midst of the pandemic■ Q3RD Net Sales
リアル店舗
Stores

E-CommerceEC274.7%

181.8%

Unit : Billion Yen

EC前年比
EC Y/Y

0.63

108.8%
0.24

0.32

HUF Japan has acquired new customers on acontinual basis by understanding the culture and280.0%
lifestyles of Generation Z. The brand’s sales
have increased every year, and the sales scale
230.0%
has nearly tripled over the past three years,
resulting in dramatic growth.
180.0%

Especially, the EC’s growth is very significant,and the net sales of the third quarter reached130.0%
274.7% YoY.
80.0%The EC ratio increased by 22.1 points over two

years, from 24.5% in 02/FY20 to 46.6% in
02/FY22.

30.0%2020 Ending
2020年2月期
Feb.

2021 Ending
2021年2月期
Feb.

2022 Ending
2022年2月期
Feb.

Both urban-type physical stores and ecommerce marketplaces have implemented-20.0%
respective campaigns based on the wellbalanced share of contents. This made it
possible to build a firm foundation for sales andmarketing even during the COVID-19 pandemic.

３ Q3RD Business Situation

16

Good Standing Golf Business for Cumulative Q3RD Results of 2022 Ending Feb.
We have worked to organize and deliver exciting events and news, as well as develop
new products for customers.
Y/Y

ゴルフカテゴリー

118.9%

Golf Business Net Sales
7,500

Hold the 4th “DORAEMON ×
Jack Bunny!! Golf
Competition 2021” as ahands-on event in two
locations: Kanto and Kansai

Q3RD2022 Ending
Feb.
第３四半期
売上高
6,500

7.23

6.08

5,500

4.65
4,500

2020
Ending Feb.
2020年2月期

Hold an exhibition for autumn
and winter season 2022 withthe latest digital technologies
such as digital signage forvirtual clothing try-on,
holographic display for 3D
video watching.

Unit : Billion Yen

2021
Ending Feb.
2021年2月期

Mone Inami, a professional golf
player who has partnered with us,
won nine games in this season.
She ranked first on the money list
among all Japanese women golf
players in 2021. It is the first time
for her to be an annual top earnerof prize.

2022
Ending Feb.
2022年2月期

17Recovered Brand [nano･universe] for Q3RD Results of 2022 Ending Feb.

We saw the positive impact of structural reform in the third quarter.
The OP ratio for Q3RD significantly grew by 5.2% compared to year
before COVID-19 pandemic.
■ A scenario for re-growth with structural reform■ Q3RD Operating Profit (YoY)+5.2% 9.4%

500,000
400,000

We have thoroughly reviewed our production and sale plan toreorganize an approach to sell proper price products and high priceformer products. As a result, both gross profit and operating profit
significantly recovered.
10.0%

5.2%

4.2%

5.0%

300,000
200,000

2020
Ending Feb.
2020年2月期3Q

2021 Ending Feb.
2021年2月期3Q
Operating
営業利益
Profit2022
Ending Feb.
2022年2月期3Q

Operating
営業利益率
Profit Margin

The OP ratio increased by +4.2% compared to the previous year.
The OP ratio was also up by +5.2% compared to year before last
(before the COVID-19 pandemic).
Business revenue structure rapidly improved.

As a future MD strategy, we will procure attractive products that
respond to changing trends and focus more on OMO sale channels
in line with the procurement. We will take a strong approach toacquire new young customers and further boost sales.

18

OMO Strategy for Cumulative Q3RD Results of 2022 Ending Feb.

We have provided a consistency of online and offline customer experience.
An alliance provides a framework respecting the identity of customers.

WEB
Behavior

Store
visit

pickedup

A check-in system provides you with tailoredexperience based on online behavior data even if
you are in a store.

A check-in system connects
people to places.
The store’s best selling clothes,latest news, recommended
contents, and other information
are displayed on yoursmartphone at the store.

Tryon

Purchased/ notpurchased

We analyze data and determine the level of interest of eachcustomer in our products based on their behavior in a store todeliver recommended information. The common features of ecommerce are also available in actual stores.

IoT technology combines
people and places with data ofthings.
If you pick up or try on items
in a store, we will send you the
product details after you leave
the store.

19

Recovered Brand [nano･universe] for Q3RD Results of 2022 Ending Feb.

Keeping pace with the changing lifestyle and entertainment trends during
COVID-19 pandemic, we have offered a diverse line of products that reflect
the identity of our brand “nano･universe.”

Collaboration with long-established outdoor
brand “ogawa”“5525golf” (collaboration with 5525gallery), and othercollaboration brands with KIJIMA TAKAYUKI and Dickies

Workation goods launched in collaboration withthree brands JAL, AXF, and nano universe

Support for “Totonou (organize)” experience
DESCENTE & nano･universe

Earth friendly traceable“TRUECOTTON” series

Comfortable, functional and sustainablevegan leather

20

Strategically Focused Brand “NATURAL BEAUTY BASIC” for Q3RD Results of 2022 Ending Feb.

Our brand, “NATURAL BEAUTY BASIC”, has begun collaborating with Wacoal’s
brand “Wing” to scale customer bases.
A combination of Wacoal’s technology and TSI’s design
creates new value. Both companies will strive to scale theircustomer bases and expand the business to moremarketplaces.

×

Creating new value for customers in the business fields
where the strengths of both companies overlap

As the initial collaborative project, we will launch two
new products: underwear tank tops and bra cup tank
tops, which have been jointly developed with
Wacoal’s brand Wing, from late February 2022.

４

About Balance Sheet22

About Balance Sheet> Cash & Deposits

Our financial position has continued to be sound by controlling thebalance of inventory as well as achieving good performance.
(Unit : million yen)
Cumulative Q3RD 2021
Ending Feb.
Results
Current Assets

Composition
Rate (%)

1ST Half 2022 Ending
Feb.
Results

Composition
Rate (%)

Cumulative Q3RD 2022 Ending Feb.

Results

Composition
Rate (%)

Y/Y
ChangeY/Y (%)

Q2/Q3
ChangeQ2/Q3 (%)• [Compared to the previous results as ofthe end of August]Cash and deposits decreased by 4.7
billion yen due to the increase in accounts
receivable and repayment of borrowed
money, but our business conditions wentwell.

• [Year on year]
Cash and deposits increased by 7.5 billion
yen due to the repayment of borrowed
money and the sale of real estate.

70,67845.8%73,43950.6%

78,586

51.9%

7,908

111.2%

5,147

107.0%

28,131
23,823

18.2%
15.4%

40,44018,716

27.9%
12.9%

35,68922,660

23.6%
15.0%

7,558
-1,163126.9%
95.1%-4,751
3,944

88.3%
121.1%

83,74554.2%

71,713

49.4%

72,773

48.1%-10,972

86.9%

1,060

101.5%

26,375
16,430

17.1%
10.6%

28,865
4,966

19.9%
3.4%

30,205
4,957

20.0%
3.3%

3,830
-11,473

114.5%
30.2%

1,340
-9

104.6%
99.8%

154,423100.0%

145,152

100.0%

151,358

100.0%-3,064

98.0%

6,207

104.3%

48,723

31.6%

27,195

18.7%

31,101

20.5%-17,622

63.8%

3,906

114.4%

14,817
8,915

9.6%
5.8%

202
7,835

0.1%
5.4%

130
7,035

0.1%
4.6%

-14,688-1,880

0.9%
78.9%

-72
-800

64.2%
89.8%

25,296

16.4%

18,77512.9%

17,605

11.6%-7,69069.6%-1,17093.8%

18,60412.0%

12,657

8.7%

11,553

7.6%-7,05162.1%-1,104

91.3%> Capital adequacy ratio

Total Liabilities

74,01947.9%45,97031.7%

48,70632.2%-25,312

65.8%

2,736

106.0%

Total Net Assets

80,40452.1%

99,181

68.3%

102,652

67.8%

22,248127.7%

3,471

103.5%• The capital adequacy ratio remains highat 68.1%.

154,423100.0%

145,152

100.0%

151,358

100.0%-3,064

98.0%

6,207

104.3%(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)

Total Liabilities and Net Assets> Inventory• [Year on year]
With an increase in sales, purchasing wascurtailed. Inventories were suppressed byabout 95.1%, with a reduction of 1.1 billion
yen compared to the previous quarter.

５

About Full-year Forecast

24

Sales Performance and Forecast
In October, net sales recovered to the level of the year before last following a decrease in COVID-19 infections.
Facing a wave of Omicron cases, we are not optimistic about the current situation. However, we expect that net
sales will reach between 82.2% and 85.3% compared to the year before last, Y/Y 104.3% and 108.2% taking into
consideration the proper function of e-commerce marketing channels.

Net Sales（VS FY Ending Feb. 2020）[%]■ Changes in FY Ending Feb. 2022
Full-year sales budget

100.0%

1
95.0%

91.1% (2ND Half) 85.3% (Full-year)(YoY 103.3%）/（YoY 108.2%）(compared to year before last)

89.6%

Initial forecast line for 02/FY22

90.0%

1St Half 79.1%
85.0%（YoY 115.1%）

91.1%

80.0%

75.0%

70.0%

2Nd Half
Initial
Budget2（YoY 96.5%）

Assuming
3 scenarios

3

Achievements andlatest forecasts line

85.1% (2ND Half) 82.2% (Full-year)（YoY 89.0%）

1St Half

Mar. – Aug. 2021

Aug.

2Nd Half（YoY 104.3%）

Full-year sales forecast(compared to year before last)

78.5% (2ND Half) 78.8% (Full-year)

65.0%

Feb. 2021/

Feb. 2022

Sep. 2021 – Feb. 2022/

（YoY 99.9%）

82.2% - 85.3%(YoY: 104.3% - 108.2%)* We expect net salesof between ❶ and ❷.

25

Performance Forecast and Upward Adjustment for 02/FY22
Based on the recent performance trends, we have decided to make an upward adjustment to theconsolidated performance forecast for 02/FY22 that we have published on April 12, 2021.
The details are shown below.
Previously Published
Forecast

Adjusted Forecast

Unit

Composition
Rate

Unit

Composition
Increase /decrease amountRate

Billion Yen（％）

Billion Yen（％）

Billion Yen

Rate ofchange（％）

152.40100.0140.60100.0-11.80-7.7

Operating Income

1.10

0.7

2.40

1.7

+1.30

118.2

Ordinary Income

1.60

1.0

3.80

2.7

+2.20

137.5

Profit Attributable to
Owners of Parent

1.66

1.1

2.30

1.8

+0.64

38.6

Net Sales

Net income per share

18.40 Yen

25.47 Yen

As of the end of the third quarter, operating profit has significantly increased.
Ordinary income also exceeded the initial forecasts due to the increase in dividends received and foreign exchange
gains related to securities held. With the increasing risk of the COVID-19 outbreak, we have planned to get out ofcertain businesses in the fourth quarter and have additionally made an upward adjustment to the full-year
performance forecast previously published based on the performance as of the end of the third quarter.

６ Mid-term Management Plan and Action on SDGs

27

TSI’s Initiatives toward the SDGs
Under our management principles, we have three key focuses to solve social issues.
We will put more effort into the initiatives to publish sustainability reports and obtain publiccertification.
Our Management Principles“Providing Creativity and Hospitality
in the best manner possible”“Investing in business and humanresources to keep advancing”“Helping to make people andsociety wonderful”

Enhancement ofManagement Structure

Contribution to
People and Society

Creation of Business Value

Creating a fashion entertainment industry that❷
promotes the development of community and culture
Community❶
PeopleCreating a fashion entertainment industry
that makes people healthy and happy
Growth/Focus Fields• Athleisure• Outdoor• Lifestyle, etc.

Fashion Entertainment×
Solving Social Issues

Growth/Focus Fields• Street fashion• Sharing/promoting culture• Regional development, etc.

Creating a fashion entertainment industry thatprovides earth-friendly services❸
GlobalEnvironment

Growth/Focus Fields• Circular fashion• Zero-emission fashion• Digital fashion, etc.
©BNP/BIRDIE WING Golf Club

28

Examples of TSI Group’s Initiatives toward the SDGs

１ Proposing ethical fashion using digital technology

２“FLOML” collaborates with Shimaai Farm on Ishigaki-jima island to come up withideas on natural plant dyeing, on the assumption that designs will be re-dyed aftera few years. By using 3D data images when selling it, processes such as sample
production are minimized. The sales method is also eco-friendly.

Weaving flaws and uneven dyeing that occur during the manufacturing process.
Things that do not interfere with daily use are reborn with new value as"OVERDYE PRODUCT". This fiscal year, the third in the series, we have expanded
the initiative to five stores nationwide.

Re-dyeing and selling discarded products as new products

Orders received by “CLO” 3D data

３ Participating in “BRING™”,

a clothing collection project

Participation in BRING™, which is produced by
JEPLAN, INC., a clothing collection project to recycle
unwanted clothing and textile products.
We will work together to achieve a recycling-oriented
society.

Reducing plastic waste
４
with hanger reuse

５Entering into a capital and business alliancewith “Icheck Inc” and distributing antigen
test KITs to employees

We entered into a capital and business alliance (April
2021) with Icheck Inc, a company that provides
various testing services. We began distributing antigen
test KITs to the entire group in June, with all costs
subsidized by us.

29Roadmap
To be the happiest fashion company in the world,
TSI Holdings will take further actions to achieve the SDGs.

2050

TSI Carbon Neutral Vision 2050
Our journey toward zero carbon!
TSI
INNOVATIONPROGRAM
2025

CarbonNeutralVision
2050

2025

2023
2022

Fashion Entertainment×
Solving Social Issues
We always provide creative and customer oriented-services in anadvanced way, making people and society happy.

30

Establishment of Mid-term Management Plan (TIP25)
We launched TIP24* in the fiscal year ended Feb. 2021, but were forced to suspend the plan for one year due to the
COVID-19 pandemic. We will update it to the new mid-term management plan (TIP25)* for 2025 to take one more step.
* TIP24 (TSI Innovation Program 2024): An internal program for structural reform and future strategy that started in the fiscal year ended Feb. 2021
* TIP25 (TSI Innovation Program 2025): A three-year plan from the fiscal year ending Feb. 2023 to the fiscal year ending Feb. 2025
to be formulated
The reform was suspended for one year due
to the COVID-19 pandemic.

TSI Innovation Program 2024

“Reorganization”
To FY ended Feb. 2021

“Formation”“Leap forward”

From FY ending Feb. 2022
to FY ending Feb. 2023

To FY ending Feb. 2024
Mid-term Management Plan (from FY
ending Feb. 2023 to FY ending Feb. 2025)

Update to TSI Innovation Program 2025
“Formation”“Reorganization”『再構築』[Reviewing the businessstructure][Reviewing the business structure]
To FY ending Feb. 2022

Change stereotypes:- Change the way we run thecompany for the better- Review the nature of the brandbusiness“Leap forward”[Adaptingto thenewnew
way][Adaptingto theFrom FY ending Feb. 2023
Reorganize the scope ofbusiness and make investment:- Clarify the scope of businessaccording to purpose- Make investment in new
brands and businessesway]

To FY ending Feb. 2024

Change the productivity ofinvestment:- Increase the level of business,
service, and creation with afocus on digitalization[Offering our unique value][Offering our uniquevalue]To FY ending Feb. 2025

Expand business to newfields and enhance the levelof new business:- Expand services to new fields
and further to the world

31

Formulation of Mid-term Management Plan, Overview of the SDGs and Major Factors⮚ Our focus is on the SDGs as the core of management.
We will share our human resources, organizational, and educational reform plan in mid-April.
Mid-term Management Plan(from FY ending Feb. 2023 to FY ending Feb. 2025)

TSI Innovation Program 2025
1

The Happiest Fashion
Company in the World❶ Meaning of Existence and Purposes
・ Corporate meaning of existence/Management perspective (Purpose/Vision/Mission)・ Qualitative and quantitative goals of the med-term reform・ Reform roadmaps❷ Current Business

Ensuring the sustainability of Earth systems andcreating a happy and healthy life for people

・ Brand purpose (= Social value of the brand & Trends of fashion and entertainment)・ Strategy and policy for achieving the brand purpose
・ Business structure reform (= Immediate recovery of profits)❸ New BusinessBusiness Strategy

2 New Business

4 SDGsConcept: Formationand Leap

3

Medium Term Challenges and Strategy Agenda

・ Define “New Market”
・ Establish the Fashion Entertainment Lab
・ Enhance our value through R&D and alliances❹ SDGs・ Initiatives for the SDGs/materiality
・ Digital transformation in management and administrative operations
・ Details of initiatives/roadmaps

Current
Business❺ Corporate Culture (Organization/Personnel)
Corporate Culture

5 (Organization/Personnel)

・ Work environment where diverse human resources can play an active role (=Diversification and work style reform)
・ Enhancement of human resources (= Human resources requirement and development)
・ Organization and capability for achieving the purposes (= Design of organization/system)

32

Our WILL

Striving to be thehappiest fashion company
in the world.
Becoming a company that creates happiness for ourshareholders, customers, society, and employees.

We will improve the soundness of the businesswith precise management controlling.
Besides, we will achieve advanced businessthrough supply chain reform, digital store
development, and new product, service, content
development, etc.

7

Reference Data

34

Highlights of Q3RD Results for FY Ending Feb. 2022

Overview(Unit : million yen)
Q3RD 2021 Ending Feb.
Results

Composition
Rate (%)

Q3RD 2022 Ending Feb.
Results

Composition
Rate (%)

Y/Y
ChangeY/Y (%)Net Sales

40,948100.0

39,163100.0-1,785

95.6

Gross Profit

22,571

55.1

22,696

58.0

124

100.6

SG&A Expenses

20,37349.8

18,64947.6-1,724

91.5

19,192

46.9

17,62645.0-1,565

91.8

Goodwill Amortization

209

0.5

198

0.5

-11

94.7

Depreciation and Amortization

972

2.4

824

2.1

-147

84.8

Operating Income

2,197

5.4

4,046

10.3

1,848

184.1

Ordinary Income

2,630

6.4

4,236

10.8

1,606

161.1

Extraordinary Income

2,066

5.0

120

0.3

-1,945

5.8

Extraordinary Loss

892

2.2

467

1.2

-424

52.4

Profit Before Taxes

3,804

9.3

3,889

9.9

85

102.2

Profit Attributable to Owners of Parent

3,307

8.1

3,575

9.1

267

108.1

EBITDA ※

3,379

8.3

5,069

12.9

1,690

150.0

SG&A Expenses(excl. Goodwill Amortization, Depreciation and Amortization)*EBITDA＝Operating Income + Goodwill Amortization + Depreciation and Amortization

35

Highlights of Cumulative Q3RD Results of 2022 Ending Feb.

Overview(Unit : million yen)
Cumulative Q3RD 2021
Ending Feb.
Results

Composition
Rate (%)

Cumulative Q3RD 2022 Ending Feb.
Results

Composition
Rate (%)

Y/Y
ChangeY/Y (%)Net Sales

97,219100.0

103,915

100.0

6,695

106.9

Gross Profit

46,741

48.1

57,991

55.8

11,250

124.1

SG&A Expenses

55,012

56.6

52,81050.8-2,20296.0

51,69953.2

49,86548.0-1,834

96.5

598

0.6

587

0.6

-11

98.1

2,714

2.8

2,357

2.3

-357

86.8

Operating Income-8,271

-8.5

5,180

5.0

13,452-

Ordinary Income-7,012

-7.2

6,239

6.0

13,252-Extraordinary Income

2,485

2.6

1,563

1.5

-921

62.9

Extraordinary Loss

4,906

5.0

1,535

1.5

-3,37031.3

Profit Before Taxes-9,433

-9.7

6,268

6.0

15,701-

Profit Attributable to Owners of Parent-11,126

-11.4

5,465

5.3

16,591-

EBITDA ※-4,958

-5.1

8,125

7.8

13,084-

SG&A Expenses(excl. Goodwill Amortization, Depreciation and Amortization)

Goodwill Amortization
Depreciation and Amortization*EBITDA＝Operating Income + Goodwill Amortization + Depreciation and Amortization

36

Highlights of Cumulative Q3RD Results of 2022 Ending Feb.

Net Sales
Per Channel

Cumulative Q3RD 2021
Ending Feb.
Results(Million yen)

Composition
Rate (%)

Cumulative Q3RD 2022 Ending Feb.
Results(Million yen)

Composition
Rate (%)

Y/Y (%)

Composition Rate Y/YChange(pt)Department Stores

9,399

9.7

10,539

10.1

112.1

0.5

Commercial Facilities(*1)

41,51642.7

44,949

43.3

108.3

0.6

In-house EC

12,57912.9

13,332

12.8

106.0

-0.1

3rd Party

16,40316.9

15,062

14.5

91.8

-2.4

E-Commerce

28,98229.8

28,395

27.3

98.0

-2.5

Others(*2)

11,116

11.4

12,233

11.8

110.1

0.3

Domestic

91,014

93.6

96,117

92.5

105.6

-1.1

E-Commerce

2,186

2.2

2,372

2.3

108.5

0.0

Overseas(*3)

6,205

6.4

7,797

7.5

125.7

1.1

E-Commerce TOTAL

31,16832.1

30,767

29.6

98.7

-2.5

TOTAL

97,219100.0

103,915

100.0

106.9

-

*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.

37

Highlights of Cumulative Q3RD Results of 2022 Ending Feb.
(Unit : million yen)

Brands Overview
Cumulative Q3RD 2021 Ending Feb.

Sales

Composition
Rate (%)

Gross Profit
Ratio (%)

Y/Y

Cumulative Q3RD 2022 Ending Feb.
Composition
Rate (%)

Sales

Gross Profit
Ratio (%)

Sales (%)

Gross Profit
Ratio (pt)1.

nano・universe

13,91514.3

43.9

12,451

12.0

50.1

89.5

+6.2pt2.

PEARLY GATES

9,287

9.6

52.4

11,804

11.4

62.3

127.1

+9.8pt3.

MARGARET HOWELL

6,325

6.5

53.6

8,190

7.9

67.4

129.5

+13.8pt

4.

NATURAL BEAUTY BASIC

8,179

8.4

49.0

7,876

7.6

59.8

96.3

+10.9pt

5.

HUF

3,142

3.2

46.6

4,640

4.5

51.2

147.7

+4.7pt6.

AVIREX

4,169

4.3

59.6

4,303

4.1

61.4

103.2

+1.8pt7.

UNDEFEATED

2,810

2.9

39.3

3,508

3.4

41.3

124.8

+2.0pt8.

STUSSY

3,394

3.5

64.5

3,356

3.2

69.8

98.9

+5.2pt9.

new balance golf

1,941

2.0

39.2

2,698

2.6

58.3

138.9

+19.2pt

10.

PROPORTION BODY DRESSING

2,533

2.6

56.5

2,604

2.5

62.7

102.8

+6.1ptTOP10

55,69957.3

50.1

61,435

59.1

58.5

110.3

+8.4ptOther Brands

38,37739.5

45.6

42,404

40.8

51.9

110.5

+6.4ptContinuing Brands

94,07796.8

48.2

103,839

99.9

55.8

110.4

+7.5ptClosed Brands

3,142

3.2

43.9

75

0.1

107.5

2.4

+63.7pt

TOTAL

97,219

100.0

48.1

103,915

100.0

55.8

106.9

+7.7pt38

Highlights of Cumulative Q3RD Results of 2022 Ending Feb.

Domestic Monthly Sales Information
Cumulative Q3RD 2020
Ending Feb.
All Stores：74.6%
Existing Stores ：83.4%

Cumulative Q3RD 2021
Ending Feb.
All Stores： 103.6%
Existing Stores：98.4%

39

Highlights of Cumulative Q3RD Results of 2022 Ending Feb.

The Number of Stores

ApparelQ3RD 2021
Ending Feb.

FY Ending Feb.
2021

Domestic

997

872

Overseas

50

Total

Y/Y
ChangeQ3/Q4
ChangeStore Open Store Close

Cumulative Q3RD
2022 Ending Feb.

+24

▲50

846

▲ 151

▲ 26

52

+2

▲7

47

▲3

▲5

1,047

924

+26

▲57

893

▲ 154

▲ 31

Restaurant

Domestic

11

9

-

▲2

7

▲4

▲2

Cosmetics

Domestic

33

33

+8

▲5

36

3

3

1,091

966

+34

▲64

936

▲ 155

▲ 30

Total

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.