FY2024/02
Financial Results
April 04, 2024
Table of Contents
1.FY 2024/02 Overview
• Summary of FY 2024/02 | 4 | |||
• FY2025/02 is preparation of the next challenge | 5 | |||
2.FY2024/02 Financial Results and | ||||
FY2025/02 Forecast | ||||
• Summary of FY 2024/02 | 7 | |||
• Consolidated Income Statement Summary | 9 | |||
• Adastria and Major Domestic Subsidiaries Income | 11 | |||
Statement | ||||
• | Online Business | ( | ) | 12 |
Domestic | ||||
• | Overseas Business | 13 | ||
• | Consolidated Balance Sheet | 14 | ||
• | Number of Stores | 15 | ||
• | FY 2025/02 Consolidated Forecast | 16 | ||
• | Investment Plan | 18 | ||
• | Return to Shareholders | 19 | ||
• Market Interests and Our Approach | 20 | |||
• Making zetton, inc. a Wholly Owned Subsidiary | 21 | |||
FY2024/02 |
3.Medium-Term Management Plan Progress
• Revision of Medium-term Management Plan | 23 | |
• | Medium-term Management Plan (Re-posting) | 24 |
• | Growth Strategy Ⅰ : | 25 |
Multi-Brand,Multi-Category | ||
• | Growth Strategy Ⅱ: | 28 |
Digital Customer Interactions and Services | ||
• | Growth Strategy Ⅲ: | 30 |
Glocal | ||
• | Growth Strategy Ⅳ: | 32 |
New Profit-center Business Models | ||
• | Policy for M&A | 33 |
• Management conscious of cost of capital and | 34 | |
stock price | ||
• | Sustainability Initiatives | 36 |
• Progress with Numerical Goals | 38 |
2
1.FY2024/02 Overview
Representative Director and Chairman Michio Fukuda
3
Summary of FY2024/02
Results
Background
FY2024/02
Generated record-high consolidated sales and operating profit in Adastria's 70th anniversary year, and were able to increase salaries and make digital technology investments.
Operations structured to supply merchandise at the right times, prices and volumes gave Adastria the strengths to overcome challenges created by a warm winter, the yen's weakness and other events.
The stock price rose 57.4% during the fiscal year as sales and earnings increased.
Growth was supported by the benefits of the establishment of a SPA (specialty store retailer of private label apparel) business model, which
started in 2010 as the "Fourth Change" as well as by faster growth of the
EC business during the pandemic.
Merchandise with more added value and more powerful brands made it possible to sell items at higher prices.
4
FY2025/02 is preparation of the next challenge
- Achieved the current medium-term management plan (ending in FY2026/02) ROE goal in FY2024/02, two years early, and expect to surpass the sales goal in FY2025/02, one year early.
- Continuing measures to reach the operating profit goal while making investments for more progress in the following years.
-
Planning on more progress with B-to-Boperations and M&A by building even stronger ties with other companies and customers with the goal of creating a
"good community." - To accomplish these goals, investments in people will continue. The plan is to raise salaries again in FY2025/02, aiming for an average of at least 6% higher, which will result in a salary increase of more than 12% with the increase of about 6% in FY2024/02.
- The goal is the long-term growth of sales and earnings and of shareholder value.
FY2024/02 | 5 |
2.FY2024/02 Financial Results and
FY2025/02 Forecast
Managing Director Masayuki Kindo
6
Summary of FY 2024/02
⚫ Adastria(Non-consolidated) Monthly Sales All Stores YoY
116.0% | 117.4% | |
117.1% | 115.2% | |
Net sales | Physical Stores | E-commerce webC |
127.5% |
121.5% |
120.6% |
116.3%
116.9% | 113.6% |
112.6% | 113.2% |
112.6% | 117.6% |
109.4% | |
108.3% |
112.8% | 111.6% |
102.4%
112.6% |
106.0% |
107.5% |
106.1%107.0% |
114.2% | 111.4% |
110.9% | |
110.3% | 110.7% |
101.8%
102.0%
99.6%
102.2%
100.7%
98.7%
March | April | May | June | July | August | September October November | December January February | ||
1Q | 2Q | 3Q | 4Q | ||||||
Net sales: | 114.4% | Net sales: | 114.5% | Net sales: | 105.1% | Net sales: | 107.5% | ||
Physical stores: | 115.4% | Physical stores: | 115.5% | Physical stores: | 104.1% | Physical stores: | 109.2% | ||
EC: | 111.2% | EC: | 111.3% | EC: | 108.2% | EC: | 113.5% |
- Demand involving outings continued to increase after the pandemic ended
- TV commercials for GLOBAL WORK
- Strong sales of summer merchandise due to many outings during the Golden Week period in May and favorable weather
- Sales per customer increased by price revisions and executing merchandise strategies that target customers' needs
- Sales of summer merchandise remained strong due to a summer sale, warm weather and many very hot days
- Due to favorable weather, more customers at stores because many people went on outings during the summer vacation period
- Sales per customer increased more as measures to hold down excessive discounting of merchandise continued
- Use of coupons in the EC sector was below the prior-year level.
- Record heat in September pushed back the start of demand for autumn merchandise
- Promotions linking EC and physical stores; held a Dot-ST Festival
- Knitted apparel sales drove sales as temperatures were low later in the quarter
- Slow sales of winter merchandise because of warm weather until the middle of December
- Brisk sales because of a winter sale and a recovery in demand for apparel for outings during the Christmas and year-end period
- Strong sales of spring merchandise as sales began earlier than usual
- Strong sales of spring merchandise continued in February due to demand associated with new life styles and to warm weather
FY2024/02 | 7 |
Consolidated Income Statement
Millions of yen
FY2023/02 Results
Ratio
FY2024/02 Results
Ratio | YoY |
Net sales | 242,552 | 100.0% | 275,596 | 100.0% | 113.6% | |
Adastria(Non-consolidated | 196,727 | 81.1% | 220,078 | 79.9% | 111.9% | |
Domestic subsidiaries *1*2 | 22,332 | 9.2% | 24,007 | 8.7% | 107.5% | |
Overseas subsidiaries *3 | 18,017 | 7.4% | 23,396 | 8.5% | 129.8% | |
Zetton (Food & Beverage Subsidiary) *4 | 9,040 | 3.7% | 12,570 | 4.6% | 139.0% | |
Gross profit | 132,664 | 54.7% | 152,354 | 55.3% | 114.8% | |
SG&A expenses | 121,149 | 49.9% | 134,339 | 48.7% | 110.9% | |
Advertising & promotion | 8,037 | 3.3% | 8,712 | 3.2% | 108.4% | |
Personnel | 43,076 | 17.8% | 48,333 | 17.5% | 112.2% | |
Rent & depreciation *5 | 43,810 | 18.1% | 47,785 | 17.3% | 109.1% | |
Amortization of goodwill | 263 | 0.1% | 223 | 0.1% | 84.8% | |
Others | 25,961 | 10.7% | 29,284 | 10.6% | 112.8% | |
Operating profit | 11,515 | 4.7% | 18,015 | 6.5% | 156.4% | |
Adastria(Non-consolidated | 10,384 | 4.3% | 16,346 | 5.9% | 157.4% | |
Domestic subsidiaries *1*2 | 178 | 0.1% | 236 | 0.1% | 132.8% | |
Overseas subsidiaries *3 | 524 | 0.2% | 1,123 | 0.4% | 214.2% | |
Adastria Logistics | 94 | 0.0% | 88 | 0.0% | 93.4% | |
Zetton (Food & Beverage Subsidiary) *4 | 285 | 0.1% | 179 | 0.1% | 62.7% | |
Ordinary profit | 12,026 | 5.0% | 18,389 | 6.7% | 152.9% | |
Net income attributable to owners of the parent | 7,540 | 3.1% | 13,513 | 4.9% | 179.2% | |
EBITDA | 19,964 | 8.2% | 27,763 | 10.1% | 139.1% | |
Depreciation and amortization | 8,185 | 3.4% | 9,525 | 3.5% | 116.4% | |
Amortization of goodwill | 263 | 0.1% | 223 | 0.1% | 84.8% | |
Capital expenditure | 12,600 | 11,807 |
*1:Domestic subsidiaries are the sum of f our domestic subsidiaries: BUZZWIT Co., Ltd., ELEMENT RULE Co., Ltd., Adastria eat Creations Co., Ltd., ADOORLINK Co., Ltd., Gate Win Co., Ltd.
*2:Due to change in financial year, Feb-Feb (FY2023/02) and Mar-Feb (FY2024/02)
*3:Overseas subsidiaries are the sum of overseas subsidiaries: Hong Kong, Mainland China, Taiwan, Thailand, USA.(Period Jan. to Dec.2023)
*4:Operating profit of zetton, inc. is shown after consolidation adjustments. Due to change in financial year, Mar-Jan (FY2023/02) and Feb-Jan(FY2024/02)
*5:Rent & depreciation costs are the sum of Rent expenses, Lease expenses and Depreciation.
FY2024/02 | 8 |
Consolidated Income Statement Summery(1)
Summary
Net sales
Parent company
Record-high sales and earnings because of a favorable business climate and measures including products with more added value and price revisions
275.5 billion yen (+13.6% YoY)
- Up 11.9% because of actions to reflect climate change, more added value and price revisions.
- Major sources of growth were GLOBAL WORK and niko and…, which are the core brands, and LAKOLE, which is a growth brand.
Domestic subsidiaries | • Up 7.5%, but sales increased 14.4% after excluding the effect of the fiscal year change in the previous fiscal year. | ||
• Sales at EC company BUZZWIT increased because of higher sales of a children's apparel brand acquired in FY2023/02 | |||
and sales generated by new brands. | |||
Overseas subsidiaries | • Up 29.8% due to a recovery following the end of lockdowns in China in the previous fiscal year and sales at new | ||
stores. | |||
Food and beverage business | • Up 39.0% but sales increased 32% after excluding the effect of the fiscal year change in the previous fiscal year. | ||
55.3% (+0.6p YoY) | |||
Gross profit margin |
- A revision to the loyalty point program temporarily raised the gross profit margin by 0.1 percentage points (700 million yen) and the end of expenses incurred in FY2023/02 for the unauthorized access incident raised the margin by 0.5 percentage points.
- The negative effect of the yen's depreciation was offset by price increases and a decline in discounting merchandise. There was no change in the actual gross profit margin due to an improvement in ASEAN region production and overseas business.
*BUZZWIT Co., Ltd., ELEMENT RULE Co., Ltd., Adastria eat Creations Co., Ltd., ADOORLINK Co., Ltd., Gate Win Co., Ltd. and zetton, inc. changed their fiscal year end in FY2023/02.
*comparisons are Feb-Feb (FY2023/02) and Mar-Feb (FY2024/02) for all of these companies except zetton and Mar-Jun (FY2023/02) and Feb-Jun (FY2024/02) for zetton.
*OPEN AND NATURAL Inc. was absorbed by BUZZWIT Co., Ltd. on July 1, 2023
FY2024/02 | 9 |
Consolidated Income Statement Summery(2)
48.7% (-1.2p YoY) Decreased because sales growth reduced all expense categories as a pct. of sales | |
SG&A expense ratio | |
Advertising & promotions ・ 3.2% (-0.1pYoY) (+670 million yen) | |
More product promotions and actions for higher consumer awareness of the Dot-ST EC website | |
Personnel | ・ 17.5% (-0.3p YoY) (+5,260 million yen) |
Higher salaries, more recruiting activities due to the labor shortage, more working hours and an increase in bonus payments due to sales growth
Rent & depreciation ・ 17.3% (-0.8p YoY) (+3,970 million yen)
The variable portion of rent increased because of sales growth
Others | ・ 10.6% (-0.1p YoY) (+3,320 million yen) |
Increases in credit card fees, outsourcing expenses and delivery expenses, all due to sales growth
Operating profit 18.0 billion yen (+56.4% YoY)
Operating income ratio 6.5%, EBITDA margin 10.1% Change in fiscal year of subsidiaries in Japan +120 million yen, Temporary security deposit amortization -500 million yen
Ordinary profit 18.3 billion yen (+6,360 million yen YoY)
Non-operating income: Foreign exchange gains of 200 million yen, insurance fee income of 100 million yen
Net income
attributable to
owners of the parent
13.5 billion yen (+5,970 million yen YoY)
Extraordinary losses: Impairment loss on stores -1,000 million yen, loss (gain) on valuation of investment securities -200 million yen
Income taxes: Increase in deferred tax asset at U.S. subsidiary +1,300 million yen
*BUZZWIT Co., Ltd., ELEMENT RULE Co., Ltd., Adastria eat Creations Co., Ltd., ADOORLINK Co., Ltd., Gate Win Co., Ltd. and zetton, inc. changed their fiscal year end in FY2023/02. *comparisons are Feb-Feb (FY2023/02) and Mar-Feb (FY2024/02) for all of these companies except zetton and Mar-Jun (FY2023/02) and Feb-Jun (FY2024/02) for zetton.
*OPEN AND NATURAL Inc. was absorbed by BUZZWIT Co., Ltd. on July 1, 2023
FY2024/02 | 10 |
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Adastria Co. Ltd. published this content on 04 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 April 2024 06:07:09 UTC.