R e s u l t s B r i e f i n g : 1 st H a l f
Results of 2022 Ending Feb.
6th October, 2021

1

Impacts of the COVID-19 for 1H 02/FY22
Associated with the fourth wave abating, business performance in June was on a recovery trend, but the impact of the COVID-19 expanded in July and beyond.
The number of stores that are closed or open for shorter hours further increased, the business hours of stores in major metropolitan areas were reduced by about 10%compared to usual time in Q2. The business environment in Q2 was harsher than in Q1, with a greater impact on real stores.

Number of new infections nationwide
10,000 or more people

Q2 (June‐August)
02/FY222022年2⽉期
第2四半期（6⽉〜8⽉）
A record high of new infections on July28, 2021 and
The infections increase after that, too.

5,000 or more people
Less than 5,000 people
2022年2⽉期
第1四半期（3⽉〜5⽉）
Q1 (March‐May)
02/FY22

June 20
July 12
August 2
August 20
August 27

The declaration of a stateof emergency wasremoved in 9 prefectures
on June 20,2021.

The 3rd declaration of a state of emergency was removed in 9 prefectures, 7 of which shifted to priority measures for prevention of the spread of the COVID-19
The 4th declaration of a state of emergency was issued in Tokyo and the declaration of a state of emergency was extended in Okinawa prefecture.
The declaration of a state of emergency was extended for Tokyo and Okinawa, and a declaration of a state of emergency was issued in 4 prefectures and priority
measures for prevention of the spread of the COVID-19 were issued in 5 prefectures.
A declaration of a state of emergency was issued in 7 prefectures.
A declaration of a state of emergency was issued in 6 prefectures.

2Market Trends for 1H 02/FY22

Covid-19 environment is not an
excuse for not selling products.

The days of mass-producing clothes

Facing a very difficult environment

market, burdening the environment,

in 1H, we broke away from theand selling them at a reduced price“norm” of the past from business
management and operation andweʼve been working on reforms
thoroughly focusing on agility.

in quantities not needed by theFirst Half
Revieware over.
Rather than adjusting margins
through mass procurement, we
shifted to a highly profitable

As a result, we were able to achievecertain targeted numerical results.

structure with a high crossover ratiothat does not produce surpluses
through discounting or remaining
inventory.

Breaking away from“excessive”business3

1H 02/FY22 TIP24 ※ Reform position

Break away from the business model of the past
We will put aside nostalgia for past businesses and takeon new challenges, aiming to further pursue corporate
value.

Where we are now
The future we should
aim for

The happiest
fashioncompanyin the world

2023
Organizational integration
1st Phase completed

2022

2021

Growth and leap forward
Brands that can take on the world andspread into neighboring regions

2020
Painful innovation

Investment in the future
Setup that nurtures personnel and business, EC, digital shift and fresh
investment

Withdrawing from businesses, closing stores, reducing
labor costs…

※ TIP24（TSI Innovation Program 2024) is a name of in‐house program in regard to structural reform and future strategy started from 2022 Ending Feb.

4

Market Trends for 1H 02/FY22
Adherence to existing brands, sales channels, and business models means inefficient use of corporate
assets, that is, people, goods, and money, and loss of market competitiveness and growth potential.

2 things we should do in 2Hand beyond1

Get out of inefficient business modelwith low productivity and pursue new
apparel business ideals.

2

Fashion entertainment will be the key
word for our future investment.

Strengthen digital investment and reinforce abusiness model without fragmentation throughreal stores and EC cooperation.

Pursue products and services with even higher
customer value in the new post-COVID-19 worldof value.

Refine the structure of short-cycle, small-lot
procurement and strengthen supply chain
reforms to ensure a high turnover of full-priceproducts

Step forward to invest in the next generation
creations (products, communications, services)and businesses.

AGENDA

1

Summary of Financial Results for 1H, 02/FY22

2

1H Business Situation

3

Business Overview by Channel

4

Action on SDGs

5

Balance Sheet and Future Investment Strategy

6Full-year Forecast

7

Supplemental Materials

1

Summary of Financial
Results for 1H, 02/FY22

7

Financial Highlights for 1H 02/FY22

Under tough market, we united to work on our business.
1st half went well as planned.
1ST Operating Profit

1ST Half
Quarterly Net Income

64.75 Billion Yen

1.13 Billion Yen

1.89 Billion Yen

YoY 115.1%

Against Plan Change +1.16 billion yen

YoY Change +16.32 billion yen

Compared to year before last 79.1%

YoY Change +11.60 billion yen

YoY Change +8.48 billion yen

Compared to year before last
Change 1.29 billion yen

1ST

Half Net Sales

Compared to year before last
Change 0.84 billion yen
Compared to year before last 179.5%

8

Financial Highlights for Q2 02/FY22

Net sales fell far short of the previous yearʼs level, but review of
discounts/inventory/expense led to significant improvement in revenue
against budget.
Q2ND
Net Sales

30.54

Billion Yen

YoY 88.3%
YoY Change -4.05 billion yen

Q2ND
Operating Profit-1.14

Billion Yen

Q2ND
Quarterly Net Income-0.54

Billion Yen

YoY Change +2.88 billion yen

YoY Change +3.44 billion yen

Compared to year before last
Change 0.94 billion yen

Compared to year before last Change
0.88 billion yen

Against Plan Change +1.16 billion yen

Against Plan Change +1.35 billion yen

9Gross profit / SG&A expenses for 1H 02/FY22
Unit : Billion yen

Gross Profit

550
500

1ST

Half Gross Profit

35.29 Billion yen

450

56.0%

54.5%
53.9%

55.0%

53.6%

350

40.1

43.9

40.5

43.0%

250

35.3

24.2

200
2018
18年2⽉期Ending Feb.

2019
19年2⽉期Ending Feb.

2020
20年2⽉期Ending Feb.

売上総利益
Gross Profit

2021
21年2⽉期Ending Feb.

• Profitability improvement through the sale of full-

52.0%

price products for which sales opportunities were

51.0%

not available in the previous fiscal year

50.0%
2022
22年2⽉期Ending Feb.

Half SG&A Expenses

500

34.16 Billion yen

450

54.2%

54.1%

300

54.0%
53.0%

44.1

40.7

34.2

2018
2019
2021
2022
2020
Ending Feb. 19年2⽉期
Ending Feb. 20年2⽉期
Ending Feb. 22年2⽉期
18年2⽉期Ending Feb.
Ending Feb. 21年2⽉期
SG&A
販管費

Expenses• Review of rent during the store closing period• Work style reform, review of work system atstores and headquarters

52.0%

34.6

250
200

55.0%

52.8%
40.0

> SG&A expenses

56.0%

61.6%

400
350

YoY 98.6%
Compared to year before last
77.5%
YoY Change -0.48 billion yen

53.8%⇒ Improved profit by \11.1 billion compared tolast year

売上総利益率Gross Profit Margin

SG&A Expenses

550

previous fiscal year's level.

53.0%

Unit : Billion yen

1ST• Purchases were curbed to about 85.4% of the

54.0%

400

300

YoY 146.0%
Compared to year before last
80.4%
YoY Change ＋11.13 billion yen

54.3%> Gross Operating Profit

SG&A
販管費率
Expenses Rate

51.0%
50.0%

• Improvement of transportation costs by changing
logistics carriers⇒ \9.9 billion improvement over the year before
last

10

Difference from Disclosed Plan for 1H 02/FY22
FY2/22 1H: \1.13 billion vs. disclosed plan of \-0.50 billion
As the Covid-19 impacts prolong, the situation remains difficult standing at 90.8% of the sales plan.
However, improved by \1.63 billion due to “big growth of golf and street casualbrands” ,“improvement” in gross profit margin” and “reduction of SG&A expenses”

3.45

1.13

1.63

Unit : Billion yen

1.63
0

Improvement
versusplanning

TIP24 reform effects

Improvement of \1.86 billion

‐0.50

0.89
0.40

0.57

・Decreases in fixed costs and variable SG&A
expenses due to sales decrease
・Extraordinary loss transfer by the COVID-19(personnel expenses, store rent, etc.), etc.

‐3.68
Operating profit
1H disclosed plan

Unachieved gross profit
due to a fall in net sales

Improvement in grossprofit (valuation loss)
through sales restraint※

Improvement in grossprofit (valuation loss)
through cost reduction※

Reduction of
SG&A expenses
at headquarters※ Changing the sales policy, we tried to reduce purchasing, sales costs and discount sales.

Reduction of SG&A
expenses at business
unit

Operating profit,
actualOperating Profit Trends for 1H 02/FY22

11> Operating Profit

In the midst of the prolonged Covid-19 impacts, in termsof 1H results, profitable for the first time in four years.

Operating profit \1.13 billion
Profit ratio 1.8％
(Disclosed plan ‒\0.5 billion)

1.8%

14.0
12.0

0.1%

-0.2%

Unit
: Billion yen
2.0%

EBITDA \3.06 billion EBITDA ratio 4.7%
> Main factors

-0.2%
0.0%

10.0

❶ Profitability of the strong golf business
8.0
‐2.0%

1.13

6.0

‐4.0%

4.0

❸ Contribution of overseas business, which
improved profitability through M&As

2.0
0.0

❷ Active street business with sales
growth potential

‐6.0%

0.10
-0.19

-0.16

‐2.0
‐8.0%

-10.47‐4.0-18.6%‐6.0

2018
Ending Feb.
18年2⽉期_上期

2020 Ending Feb.
2019 Ending Feb.
19年2⽉期_上期
20年2⽉期_上期 21年2⽉期_上期
2021 Ending Feb.
Operating
営業利益
営業利益率
Operating Profit Margin
Profit‐10.0%

2022
Ending Feb.
22年2⽉期_上期❹ Improvement of inventory sales rate throughappropriate yield❺ Effects of suppression of purchasing andreduction of SG&A.

12

Net income impact items for 1H 02/FY22
Non-operating income was \1.12 billion due to dividend income/real estate income, etc.
Extraordinary income reached \1.45 billion due to gain on sales of marketable securities, gain on sales of fixed
assets, etc.
COVID-19 impacts caused loss due to temporary closing -\1.0 billion, posting quarterly net income of \1.89
billion and a profit margin of 2.9%.
1ST Half
Operating Profit

1.13 Billion yen

・ Gain on sale of investment securities 0.8
・Gain on sales of non-current assets 0.38
・ Dividend income 0.41
・Equity method return on investment 0.14
・ Foreign exchange income 0.13
・ Real estate income 0.13

Compared to year before last
Change ＋1.30 billion yen
YoY Change ＋11.60 billion yen

1.12

1ST Half
Quarterly Net Income

1.89 Billion yen
Compared to year before last
Change ＋0.84 billion yen
YoY Change ＋16.32 billion yen

1.13

1.45

-0.26

Unit : Billion Yen

-1.07
-0.51

・ Rental expenses
on real estate 0.09
・ Interest expenses 0.06

1.89

・ Loss due totemporary closing 1.0

Net profit
margin2.9%

Operatingprofit margin
1.8%

OperatingincomeNon-operating
incomeNon-operating
expenses

Ordinary Income 2.0

Extraordinary
incomeExtraordinary
lossesProfit Before Taxes 2.38

Income taxes
deferred

Net income attributable toowners of parent

Profit Attributable to Ownersof Parent 1.89

2

1H Business Situation

14

Operating Profit Revenue Structure by Segment for 1H 02/FY22

About our strong businesses in Japan(1)Golf, athleisure and street brand continued to drive profits.
(2)Ladiesʼ brand business quickly shifted to an EC-centered strategy, making a big contribution to revenue.

We aim to expand the business domain with our strong business group in the future.
Domestic strong business
好調事業
performance summary
Net Sales
Operating
IncomeOperatingprofitmargin26.47
Billion yen

3.43
Billion yen

13.0%

About our weak businesses in Japan
There are some businesses that are suffering from changing business model because they make up a significant
proportion of store sales,occasion demands and purchased items.
As for the low profitable businesses,we will thoroughly review marketing,customers,design,productpromotion,business structure and organizational structure.
We will focus on rapid business reform with an eye to closure.

15

Strong Golf Category for 1H 02/FY22
In addition to the effect of the Olympics, we succeeded to get new fans by proposing new
attractive products.
All five golf brands exceeded the plan, sales at last year and year before last as a result.

Contracted golfer Mone
Inami won the Japan
Women's Golf
Championship Konica
Minolta Cup, following
her Olympic silver
medal.

In addition to the release of"Doraemon" collaboration items,
a golf competition was held at agolf course wrapped in theworld of Doraemon.

12,000

Unit : Billion Yen

1ST Half Net Selesin GOLF Category

11.05

11,00010,000
9,000

8.07

9.24

8,000

7.60

7,000
6,000
5,000
4,000
3,000

2019
Ending Feb. 2020
Ending Feb.
2019年2⽉期
2020年2⽉期

2021
Ending Feb.
2021年2⽉期

2022 Ending Feb.
2022年2⽉期

16Street Category for 1H 02/FY22
Step into investments more on a brand business that drives the street boom.

After about 10 years,
HUF opened a flagshipshop again in San
Francisco, where it was
founded.

With UNION celebrating its
30th anniversary in its homecountry, products that attract
attention from inside andoutside the street industry are
released every month from its
individual brands and stores.
Spurred by its popularity
Unit : Billion Yen

1ST Half Net Seles
in Street Category

6.90

8.09

7.15
6.22

“STÜSSY” opened a new flagship‐shop in Shibuya.
It was created as a global chapter whose interior was directed bydesign studio in Los Angeles.

2019 Ending Feb.

2020 Ending Feb.

2021 Ending Feb.

2022 Ending Feb.

3

Business Overview by Channel

18

Sales Trends by Channel for 1H 02/FY22

Both composition rates of department stores and commercial facilities has decreased, but their sales has improved over 20% compared to the last year. EC
channel went well. EC channels remained strong performance at 114.3% compared to year before last and at 101.2% compared to last year.
Meanwhile, overseas business was at 134.1% compared to last year and shifted to a re-growth phase due to strong performance of TACTICS of the U.S.

1ST Half
2020 Ending Feb.

Domestic

Department
StoresCommercial
Facilities(*1)

E‐Commerce
Domestic Others(*2)

Overseas(*3)

10.84

Billion yen(Composition Rate (%)：13.2)

41.96 Billion yen

1ST Half
2021 Ending Feb.

5.10

Billion yen(Composition Rate (%)：9.1)

22.76(Composition Rate (%)：51.3)

Billion yen(Composition Rate (%)：40.5)

16.44 Billion yen

18.55 Billion yen(Domestic E‐Commerce ratio(％)：23.7)(Domestic E‐Commerce ratio(％)：40.0)

9.06 Billion yen

6.21(Composition Rate (%)：11.1)

Billion yen(Composition Rate (%)：11.1)

3.52 Billion yen

3.61 Billion yen(Composition Rate (%)：4.3)(Composition Rate (%)：6.4)

1ST Half
2022 Ending Feb.

Growth by channel
compared to year
YoY (%)
before last (%)

6.31

58.2

123.6

27.35

65.2

120.2

18.78

114.3

101.2

7.43

82.0

119.6

4.85

137.6

134.1

Billion yen(Composition Rate (%)：9.8)
Billion yen(Composition Rate (%)：42.3)
Billion yen（ Domestic E‐Commerce ratio(％)：35.8）

Billion yen(Composition Rate (%)：11.5)
Billion yen(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.

19

E-Commerce for 1H 02/FY22
EC Business: 101.2% year on year
TSI, which has a high ratio of EC, is at a plateau, but we will reinforce investments in systems and mechanisms for further growth.
Meanwhile, looking at the content of the revenue structure, the highly profitable in-house EC ratio is 47.9%.
In-house EC sales grew steadily at 110.7 % year on year. Expansion of our own customer base is in good shape.
1ST Half
2020 Ending Feb.

Domestic E‐Commerce(ratio(％)) ※１

16.44 Billion yen

1ST Half
2021 Ending Feb.

1ST Half
2022 Ending Feb.

18.55 Billion yen 18.78 Billion yen

compared to year
before last (%)

YoY (%)

114.3

101.2

(23.7)(40.0)(35.8)(+12.1pt)

In‐house EC(ratio(％))

5.17Billion yen

8.12 Billion yen

8.99 Billion yen(31.5)(43.8)

173.8(47.9)(+16.4pt)

110.7

Overseas E‐Commerce(ratio(％)) ※２

0.22 Billion yen

1.47 Billion yen

1.60 Billion yen(6.3)(40.9)

720.9(33.0)(+26.7pt)

108.5

16.66 Billion yen 20.03 Billion yen

20.38 Billion yen(40.0)

122.4

101.8

(35.6)

E‐Commerce TOTAL(ratio(％))※１(22.9)(+12.7pt)(▲4.2pt)(＋4.1pt)(▲7.8pt)(▲4.5pt)※１ Domestic E‐Commerce ratio excluding domestic and other sales (wholesale, company sales, etc.)※２ 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 recordedin overseas sales.

20

Brand Digital Communications for 1H 02/FY22

Brand action with a focus on digital communications.
Live commerce and the D2C brand have also been successful.
Arpege story
Strengthen customer contact points through live commerce

D2C brand “MECRE”
Full-scale debut this fall

EC sales increased 119% YoY.
In‐house EC sales
grew 162% YoY.
119％

Unit : Billion Yen

increase

1.65

1.54

1.83

1ST Half FY
Ending Feb.
2020

1ST Half FY
Ending Feb.
2021

1ST Half FY
Ending Feb.
2022

We enforced communication
with customers through livecommerce.

D2C brand debut directed by influencer "MAI" withsome 150,000 followers.
The first collection order-taking event held in Julywas far better than planned.

21

New Customer Contact Points for Brands for 1H 02/FY22

Some existing businesses has challenged new things, realizing collaboration
with other brands and different types of industries.
and wander is gaining momentum,
collaborating with 2 MONCLER 1952

The premium down jacket brand, Moncler, rolls
out “Moncler Genius“, out of the series andwander collaborates with ”2 MONCLER 1952
MAN”, attracting attention from home and abroad.

nano・universe high-function T-shirts
Start selling products at convenience storesnano universe, which has created popular T-shirtssuch as "Anti Soaked" (sweat stain prevention Tshirt) and "Jacket T" (T-shirt for jackets), has started
to sell its products at convenience stores. Advancesale at Lawson

4

Action on SDGs

23

Action on SDGs

In order to accelerate the implementation of
the SDGs, we set up a promotion office.
We have tried to realize a sustainable society with aproject team. In order to work in unison, we set up a
specialized office.

Board/Management meeting/
Sustainability Committee
Formulate overall objective
and budget policy

Business Div.

Functional Div.

SDGs Promotion
Office❶ Formulate draft response policy➋ Make relevant departments well known❸ Collect information, Hear opinions

24

Action on SDGs

Environmental Initiatives expanding through Brands
Commence activities that consider the environment through businessParticipation in “BRING™”, a clothing collection project

Recycle clothing that cannot be reused into
resources

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

Redyeing discarded products, we sell them as new products.

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 theinitiative to five stores nationwide.

25 Action on SDGs

Achieve sustainable corporate growth through work style reforms
To become a company, which is selected by an excellent human resources even under the new values ofthe future, we pursue a comfortable work environment for employees, the driving force of the company.

Creating a safe working environment

Realization of flexible working style and efficient working environment

We began distributing antigen test KITs to the entire group

Our work style reforms achieved working at home over 50%.

We entered into a capital and business alliance (April 2021)
with ICheck, a company that provides various testing services.
As part of our efforts to establish a system that allows foreasy testing, we began distributing antigen test KITs to theentire group in June, with all costs subsidized by us.

In order to support diverse and flexible work styles among
employees, we encourage telework in principle in the COVID19 pandemic (the company average attendance rate is over50%). In addition, we started trial introduction of external
share office space and paying telework allowance. We willcontinue to facilitate our work style reforms.

5Balance Sheet and Future Investment Strategy

27

Balance Sheet and Future Investment Strategy> Cash & Deposits/Investment Securities

Our financial position continues to be sound.

• Cash and deposits increased of \8.9
billion YoY.The main difference fromthe previous forecast is \2.3 billion inloan repayment.

Stimulate investment in business investments for 02/FY23.
We will continue to make effective use of funds.
Unit:Million Yen
1ST Half 2021 Ending

Cumulative Q1ST 2022

Feb.

Ending Feb.

Results
Current Assets

Composition
Rate (%)

Results

Composition
Rate (%)

1ST Half 2022 Ending Feb.

Results

Composition

Y/Y

Rate (%)

ChangeY/Y (%)

Q1/Q4

Q1/Q4 (%)

Change69,04844.8

76,43051.5

73,439

50.6

4,391

106.4

-2,992

96.1(of Cash and Deposits)

31,47720.4

42,81728.9

40,440

27.9

8,963

128.5

-2,376

94.4(of which, Inventory)

21,913

14.2

18,793

12.7

18,71612.9-3,197

85.4

-77

99.6

85,18755.2

71,89948.5

71,713

49.4-13,474

84.2

-186

99.7

(of Investment Securities)

24,58315.9

29,44019.8

28,865

19.9

4,282

117.4

-575

98.0

(of Investment Real estate)

16,516

10.7

4,974

3.4

4,966

3.4

-11,550

30.1

-8

99.8

154,235100.0

148,329100.0

145,152

100.0-9,08394.1-3,17797.9

50,64832.8

28,35719.1

27,195

18.7-23,45253.7-1,16295.9(of Short-term borrowings)

20,702

13.4

153

0.1

202

0.1

-20,500

1.0

49

132.1

(of Current portion of long-term borrowings)

8,854

5.7

8,699

5.9

7,835

5.4

-1,019

88.5

-864

90.1

26,90917.4

19,624

13.2

18,77512.9-8,134

69.8

-849

95.7

20,51413.3

14,3909.7

12,6578.7-7,85761.7-1,73388.0

Total Liabilities

77,55750.3

47,981

32.3

45,97031.7-31,586

59.3-2,01095.8

Total Net Assets

76,67849.7

100,348

67.7

99,181

68.3

22,504129.3-1,16798.8

154,235100.0

148,329100.0

145,152

100.0-9,08394.1-3,17797.9

Non-current Assets

Total Assets
Current Liabilities

Non-current Liabilities(of Long-term borrowings)

Total Liabilities and Net Assets• We will use cash and deposits andinvestment securities to strengthen DX
investments and new businessdevelopment.（Overseas business/new
brand development /M&A)> Inventory• Purchasing was curtailed andinventories were significantly reduced.
• Inventories were suppressed to about
85.4% compared to the previous
quarter and improved 3.1 billion yen.

> Capital adequacy ratio• Capital adequacy ratio of 68.6％

28[Innovation in Profitability] About Future Financial Strategy

About Global businesses-Introduction of the business in the U.S.
Based on our global strategy, we have organized growing businesses such as
snowboarding, skateboarding and street. In order to show our uniqueness, we will
make beneficial investment in strengthening cooperation in the United States, Japanand Asia.
1St half Net Sales 1.3 Billion Yen, OP 0.1 Billion Yen and OP ratio10.7%
1st half Net sales in overseas
It's going well toward annual sales budget of
9.9 Billion Yen.

4.9
Billion Yen■ Store in Portland, which opened June in 2019.
Easing regulations as to covid-19 on May 2021 in the U.S, we could selllimited items on our stores, which has been sold on our website. The stores
had a long line. It contributed to increase revenue in stores.

4.1

3.8

1ST Half FY Ending Feb.

1ST Half FY Ending Feb.

1ST Half FY Ending Feb.

2020

2021

2022

29

Digital Transformation Promotion for 1H 02/FY22

We will strengthen supply chain by digital transformation.
We will continue to strengthen efforts to innovate business models andsystems using technology.
Started Smart Factory Custom-Made
We aim for profitability reform by small-lot production
with short cycle.

Obtained DX certification from the Ministry of Economy,
Trade and Industry. We aim to improve brand power andcorporate value with DX

TSI Sewing, which supports the Group's production,
is developing custom-made production using theflexibility of the Yonezawa Smart Factory.
We began production of FABRIC TOKYO's women'sorder brand "INCEIN" on consignment in August.

We came to obtain the DX certification due to the following reasons:
As a group-wide DX, we meet the certification standards set forth by
the Ministry of Economy, Trade and Industry (METI) for the
introduction of advanced technologies in Japan and abroad, such as
3D CAD systems and digital customer service tools, and for its
industry-leading EC business initiatives, and appropriate information
is disclosed to stakeholders.
(Reference) Regarding DX Certification System
https://www.meti.go.jp/policy/it_policy/investment/dx-nintei/dx-nintei.html

6Full-year forecast

31

Sales performance and forecast
We will not change the full-year operating profit budget and net profit budget at thisstage.
Although operating income in the first half was strong with a planned difference of +1.63 billion yen,business conditions on September, that is one of the most profitable months, was very tough comparedto the budget. In order to improve profitability in November and December, we will take company-widemeasures.
Net Sales（VS FY Ending Feb. 2020）[%]Operating Income[Billion Yen]

■ Changes in FY Ending Feb. 2022

100.0%

1

1ST Half 2022 Ending
Feb.
95.0%

（YoY 103.3%）
60

Initial forecast line

90.0%

2Nd Half
Initialbudget1St Half

79.1%

85.0%

（YoY 115.1%）

50

Assuming
3 scenarios

85.1%(2ND40Half)3

78.5%(2ND 20Half)（YoY 89.0%）
10Operating Income

1.1

65.0%

Feb.
2021

1St Half
Mar-Aug 2021

0

August September(compared to year before last)

89.6％
Full-year sales forecast
compared to year before last

82.2％
YoY 104.3%（YoY 96.5%）
30

Achievements andlatest forecasts line

70.0%

2

91.1%

80.0%

75.0%

70

91.1%(2ND Half)

Full-year sales budget

2Nd Half

Sep 2021〜Feb 2022

Feb.
2022

Full-year operating income
budget1.1 Billion Yen
Full-year Current Net
Incomebudget

1.66 Billion Yen

32

Our WILL
Reprint of the Results Briefing Q1ST of 2022 Ending Feb.

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

We will start activities to create new businesses without staying in this market.

Striving to be thehappiest fashion company
in the world.
Becoming a company that createshappiness for our shareholders,customers, society and employees.

7

Reference Data

35

Highlights of 1ST Half Results for FY Ending Feb. 2022
Overview(June to August)

Unit:Million Yen
Q2ND 2021 Ending Feb.
Results

Composition
Rate (%)

Q2ND 2022 Ending Feb.
Results

Composition

Y/Y

Rate (%)

ChangeY/Y (%)Net Sales

34,588100.0

30,536100.0-4,052

88.3

Gross Profit

15,111

43.7

16,148

52.9

1,037

106.9

SG&A Expenses

19,13455.3

17,28856.6-1,84690.3

17,961

51.9

16,28853.3-1,673

90.7

Goodwill Amortization

197

0.6

194

0.6

-2

98.6

Depreciation and Amortization

975

2.8

805

2.6

-170

82.5

Operating Income-4,023-11.6-1,139

-3.7

2,884

-

Ordinary Income-3,548

-10.3

-576

-1.9

2,972

-

Extraordinary Income

351

1.0

928

3.0

577

264.2

Extraordinary Loss

693

2.0

469

1.5

-224

67.7

Profit Before Taxes-3,891

-11.2

-117

-0.4

3,773

-

Profit Attributable to Owners of Parent-3,979

-11.5

-540

-1.8

3,438

-

EBITDA ※-2,850

-8.2

-139

-0.5

2,711

-

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

36

Highlights of 1ST Half Results for FY Ending Feb. 2022

Overview(March to August)

1ST Half 2021 Ending
Feb.
Results

Composition
Rate (%)

Unit:Million Yen
1ST Half 2022 Ending Feb.

Results

Composition

Y/Y

Rate (%)

ChangeY/Y (%)Net Sales

56,270100.064,751

100.0

8,480

115.1

Gross Profit

24,16943.0

35,294

54.5

11,125

146.0

SG&A Expenses

34,63961.6

34,160

52.8

-478

98.6

32,50757.8

32,238

49.8

-268

99.2

389

0.7

389

0.6

-

99.9

1,742

3.1

1,532

2.4

-209

88.0

Operating Income-10,469

-18.6

1,134

1.8

11,603-

Ordinary Income-9,642

-17.1

2,002

3.1

11,645

-

418

0.7

1,443

2.2

1,024

344.5

Extraordinary Loss

4,014

7.1

1,067

1.6

-2,946

26.6

Profit Before Taxes-13,237

-23.5

2,378

3.7

15,616-

Profit Attributable to Owners of Parent-14,434

-25.7

1,890

2.9

16,324-

EBITDA ※-8,337

-14.8

3,056

4.7

11,393-

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

Goodwill Amortization
Depreciation and Amortization

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

37

Highlights of 1ST Half Results for FY Ending Feb. 2022

Net Sales
Per Channel

Unit:Million Yen
1ST Half 2021 Ending

1ST Half 2022 Ending Feb.

Feb.
Results

Composition

Results

Composition(Million yen)

Rate (%)(Million yen)

Rate (%)

Composition

Y/Y (%)

Rate Y/Y
ChangeDepartment Stores

5,107

9.1

6,314

9.8

123.6

0.7

Commercial Facilities(*1)

22,76840.5

27,359

42.3

120.2

1.8

In-house EC

8,124

14.4

8,993

13.9

110.7

-0.5

3rd Party

10,434

18.5

9,792

15.1

93.8

-3.4

E-Commerce

18,55933.0

18,785

29.0

101.2

-4.0

Others(*2)

6,218

11.1

7,438

11.5

119.6

0.4

Domestic

52,653

93.6

59,898

92.5

113.8

-1.1

E-Commerce

1,508

2.7

1,603

2.5

106.3

-0.2

Overseas(*3)

3,617

6.4

4,852

7.5

134.1

1.1

E-Commerce TOTAL

20,06735.7

20,388

31.5

101.6

-4.2

TOTAL

56,270100.064,751

100.0

115.1

-

*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.

38

Highlights of 1ST Half Results for FY Ending Feb. 2022

Brands Overview

Unit:Million Yen
1ST Half 2021 Ending Feb.
Sales

Y/Y

1ST Half 2022 Ending Feb.

Composition

Gross Profit

Rate (%)

Ratio (%)

Sales

Composition

Gross Profit

Rate (%)

Ratio (%)

Sales (%)

Gross Profit
Ratio (pt)1.

nano・universe

8,004

14.2

36.1

7,598

11.7

46.2

94.9

+10.1

2.

PEARLY GATES

5,315

9.4

47.2

7,136

11.0

63.6

134.3

+16.4

3.

MARGARET HOWELL

3,509

6.2

43.4

5,173

8.0

66.4

147.4

+23.1

4.

NATURAL BEAUTY BASIC

5,066

9.0

43.1

4,978

7.7

58.8

98.3

+15.6

5.

HUF

1,778

3.2

45.6

2,749

4.2

51.2

154.6

+5.6

6.

AVIREX

2,359

4.2

55.4

2,535

3.9

59.4

107.4

+3.9

7.

UNDEFEATED

1,887

3.4

40.6

2,493

3.9

41.7

132.1

+1.2

8.

STUSSY

2,049

3.6

62.9

2,076

3.2

70.1

101.3

+7.2

9.

ROSE BUD

1,839

3.3

34.5

1,669

2.6

45.0

90.8

+10.5

10.

new balance golf

1,069

1.9

37.1

1,646

2.5

57.8

153.9

+20.6

TOP10

32,88058.4

43.6

38,057

58.8

56.6

115.7

+13.0

Other Brands

21,47938.2

42.6

26,649

41.2

51.6

124.1

+8.9

Continuing Brands

54,36096.6

43.2

64,707

99.9

54.5

119.0

+11.3

Closed Brands

1,910

3.4

35.7

43

0.1

114.0

2.3

+78.3

TOTAL

56,270

100.0

43.0

64,751

100.0

54.5

115.1

+11.6

39

Highlights of 1ST Half Results for FY Ending Feb. 2022

Domestic Monthly Sales Information
All Stores

1ST Half 2021 Ending Feb.
All Stores：66.6％
Existing Stores：82.0％

Existing Stores

Q1ST 2022 Ending Feb.
All Stores：149.2％
Existing Stores：108.0％

220.0

218.4

205.0
190.0
175.0
159.3

160.0
145.0
130.0
110.6

115.0

105.7

100.0
85.0
70.0

84.3
81.2

90.8

65.4

110.4

98.3

93.5
82.8

66.6

113.0

110.5

101.7

83.1

97.1

82.4

77.0

80.1

84.8

89.0

87.2
86.1

98.0

90.9

88.0
67.0

88.3

86.3
95.0
82.8

66.9

55.0
43.3

33.7

40.0
25.0
3

4

5

6

7

8

9

Ending Feb.2021

10

11

12

1

2

3

4

5

6

Ending Feb.2022

7

8

40

Highlights of 1ST Half Results for FY Ending Feb. 2022

The Number of Stores

Ap p arel

1ST H alf 2021

FY Ending Feb.

St oreSt ore1ST H alf 2022

Y/Y

Q2/Q4

En d in g Feb .

2021

O p enClos eEn d in g Feb .

ChangeChangeDomestic

983

872

+19

-43

848

-135

-24

Over seas

64

52

+1

-5

48

-16

-4

1,047

924

+20

-48

896

-151

-28

Total
R es t au ran t

Domestic

11

9

-

-

9

-2

-

Cos met ics

Domestic

27

33

+4

-5

32

+5

-1

1,085

966

+24

-53

937

-148

-29

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.