Adastria : FY2025/02 1Q Presentation Material

FY2025/02 1st Quarter

Financial Results

June 28, 2024

Table of Contents

•	Consolidated Income Statement - Summary	4	•	Consolidated Balance Sheet	12
• Adastria and Major Domestic Subsidiaries	6	•	Number of Stores	13
•	Online Business	7	• Use M&A for More Growth	14
• Products with More Added Value	8	• Growth of the B-to-B Business	15
• More Customer Points of Contact	9	• Approach to the Current Business Climate	16
•	Overseas Business	10	•	FY2025/2 Consolidated Forecast(Re-posting)	17

FY2025/02 1Q

2

Consolidated Income Statement

（Millions of yen）

FY2024/02 1Q Results

Ratio

FY2025/02 1Q Results

Ratio	YoY

Net sales	68,478	100.0%	74,001	100.0%	108.1%
	Adastria(Non-consolidated)	55,377	80.9%	59,814	80.8%	108.0%
	Domestic subsidiaries *1	6,450	9.4%	6,353	8.6%	98.5%
	Overseas subsidiaries *2	5,096	7.4%	6,053	8.2%	118.8%
	Zetton (Food & Beverage Subsidiary) *3	2,535	3.7%	2,985	4.0%	117.7%
Gross profit	39,094	57.1%	41,605	56.2%	106.4%
SG&A expenses	32,816	47.9%	35,591	48.1%	108.5%
	Advertising & promotion	2,193	3.2%	2,060	2.8%	93.9%
	Personnel	11,738	17.1%	13,090	17.7%	111.5%
	Rent & depreciation *4	11,604	16.9%	12,593	17.0%	108.5%
	Amortization of goodwill	57	0.1%	54	0.1%	95.4%
	Others	7,222	10.5%	7,792	10.5%	107.9%
Operating profit	6,278	9.2%	6,014	8.1%	95.8%
	Adastria(Non-consolidated)	5,787	8.5%	5,841	7.9%	100.9%
	Domestic subsidiaries *1	437	0.6%	416	0.6%	95.3%
	Overseas subsidiaries *2	137	0.2%	31	0.0%	22.7%
	Adastria Logistics	24	0.0%	80	0.1%	330.8%
	Zetton (Food & Beverage Subsidiary) *3
	- 117	-	- 305	-	-
Ordinary profit	6,349	9.3%	6,288	8.5%	99.0%
Net income attributable to owners of the parent	4,464	6.5%	4,405	6.0%	98.7%
EBITDA	8,340	12.2%	8,498	11.5%	101.9%
	Depreciation and amortization	2,005	2.9%	2,429	3.3%	121.2%
	Amortization of goodwill	57	0.1%	54	0.1%	95.4%

*1: Domestic subsidiaries are the sum of five subsidiaries FY/2024 1Q: BUZZWIT Co.,Ltd., ELEMENT RULE Co., Ltd., Adastria eat Creations Co.,Ltd., ADOORLINK Co., Ltd., Gate Win Co., Ltd.

Domestic subsidiaries are the sum of three subsidiaries FY/2025 1Q : BUZZWIT Co.,Ltd., ELEMENT RULE Co., Ltd., ADOORLINK Co., Ltd.,

*2: Overseas subsidiaries are the sum of overseas subsidiaries: Hong Kong, Mainland China, Taiwan, Thai, USA.(Period Jan. to Mar.2024)

*3: Operating profit of Zetton, Inc. is shown after consolidation adjustments. (Period Feb. to Apr. 2024)

*4: Rent & depreciation costs are the sum of Rent expenses, Lease expenses and Depreciation

FY2025/02 1Q

3

Consolidated Income Statement - Summary 1

Summary

Sales increased with the support of consistently firm demand, favorable April/May weather and successful sales/merchandise strategies

A small decrease in operating profit because of difficulties at some subsidiaries

Net sales	74.0 billion yen (+8.1% YoY)
Parent company		•	Up 8.0%; higher sales and earnings
		•	Stable growth of GLOBAL WORK and other core brands and sales growth due to new LAKOLE
			stores and growth of the wholesale business
Domestic subsidiaries	•	Sales down 1.5%. Higher sales and earnings at ELEMENT RULE due to a recovery of last year's
			weak brands and lower sales and earnings at EC company BUZZWIT caused by slow sales of
			major brands.
Overseas subsidiaries	•	Sales up 18.8%. Mainland China sales increased and the loss decreased despite weak consumer
			spending. Sales and earnings increased in Hong Kong and Taiwan because of new stores and
			new brands. U.S. sales and earnings down due to a slowdown in the wholesale business.
Food and beverage business •	Sales up 17.7%. Sales increased due to a recovery of the restaurant sector in Japan but new
			store expenses and higher personnel expenses reduced earnings.

Gross profit margin 56.2% (-0.9pYoY)

• Profitability benefited from revisions of product prices to reflect the increasing value of merchandise and from continuing measures to limit discounting. However, the apparel business gross profit margin was basically unchanged because of the yen's depreciation. The consolidated gross profit margin decreased due to negative effect on margins of the growth of the wholesale business(-0.7p).

FY2025/02 1Q

4

Consolidated Income Statement - Summary 2

SG&A expense	48.1% (+0.2p YoY)
ratio
Advertising & promotions ・ 2.8% (-0.4p YoY) (-130 million yen)
		Streamliningof promotion expenses
Personnel		・ 17.7% (+0.6p YoY) (+1,350 million yen)
		Higher salaries continue, more recruiting activities due to the labor shortage and more working hours due to
		sales growth
Rent & depreciation	・ 17.0% (+0.1p YoY) (+990 million yen)
		Higher depreciation due to new stores in the previous and current fiscal years and higher rent because of sales
		growth
Others		・ 10.5% (+0.0p YoY) (+570 million yen)
		Increases in credit card fees, outsourcing expenses and store-related expenses

Operating profit 6.0 billion yen (-4.2%YoY)

Operating income ratio 8.1%, EBITDA margin 11.5%

Ordinary profit 6.2 billion yen (-1.0%YoY)

Non-operatingincome・Foreign exchange gains of 220 million yen

Net income

attributable to

owners of the parent

4.4 billion yen (-1.3%YoY)

Extraordinary losses・Impairment of store assets of 40 million yen

FY2025/02 1Q

5

Adastria and Major Domestic Subsidiaries Income Statement

• Adastria (Non-consolidated)

（Millions of yen）

		FY2024/02 1Q Results	FY2025/02 1Q Results
					YoY
Net sales	55,377	59,814		108.0%
	(Total stores YoY w/o Wholesale)	114.4%	104.3%		-
	(Same stores YoY)	112.3%	102.6%		-
	GLOBAL WORK	13,831	14,574		105.4%
	niko and ...	8,135	8,593		105.6%
	LOWRYS FARM	5,778	6,148		106.4%
	studio CLIP	5,423	5,625		103.7%
	LEPSIM	3,579	3,823		106.8%
	LAKOLE	2,674	3,185		119.1%
	JEANASIS	2,989	2,942		98.4%
	BAYFLOW	2,670	2,834		106.2%
Gross profit	31,222	33,101		106.0%
	Gross margin	56.4%	55.3%		- 1.1p
SG&A expenses	25,435	27,259		107.2%
	SG&A ratio	45.9%	45.6%		- 0.3p
Operating profit	5,787	5,841		100.9%
	Operating margin	10.5%	9.8%		- 0.7p

⚫ Major Domestic Subsidiaries

Net sales	BUZZWIT Co., Ltd.	3,212	3,036	94.5%
ELEMENT RULE Co., Ltd.	2,888	3,190	110.5%

• ：Adastria (Non-consolidated) : Amortization of goodwill for FY2023/02: None,FY2024/02:None
• ：Adastria (Non-consolidated) : Net sales are shown before elimination of internal transactions.
• ：Adastria (Non-consolidated) and Gate Win Co., Ltd. Merge in FY2025/02 1Q

FY2025/02 1Q

6

Online Business (Domestic )

Domestic net sales from online (FY2025/02)	18.2 billion yen (+7.3% YoY)

• Domestic online business ratio: 27.3% (of which Adastria EC site: approx. 15.0%)
• "Dot-ST"has about 18.2 million members (0.7 million more than at the end of FY2024/02)

（100 million yen）
300
									Other EC				Owned EC
	42.8%								Composition of EC total sales		Domestic Owned EC
250									vs. domestic sales				Composition Ratio
				30.8%	32.3%
200					30.1%		29.9%				29.8%			30.0%
						28.5%		28.7%	28.8%			28.2%
								27.2%		27.8%	27.0%		27.6%
		26.4%	26.8%
150	22.7%
					17.7%	16.7%		16.1%
				15.8%		15.5%	15.0%	15.0%	15.1%				15.7%	15.2%
100		13.9%				14.8%	14.7%	14.8%	15.0%
	13.8%
50
0
	FY2021/2				FY2022/2				FY2023/2				FY2024/2			FY2025/2
	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q

*FY2021/02 non-consolidated sales and sales in BUZZWIT Co., Ltd. and ELEMENT RULE Co., Ltd. were included. *Starting in FY2022/02, sales of ADOORLINK Co., Ltd. was included.

*Starting in FY2023/02 2Q, sales of BUZZWIT Co., Ltd. include its consolidated subsidiary OPEN AND NATURAL, Inc. (2 companies merged in July 2023) and from 4Q, sales of Gate Win Co., Ltd. was included.

FY2025/02 1Q

7

Products with More Added Value

• Sales of core products of GLOBAL WORK increased

• Promotional activities for products raised consumer awareness of major product categories
• Benefits of products match consumer needs: easy-care fabrics that resist wrinkling and are machine washable and fashions with stylish silhouettes yet still easy to purchase and wear
• Started to increase promotional activities for men's apparel in the current fiscal year.

Sales are increasing with Air Karu Easy Pants (light weight, stretchable, easy care) making a big contribution.

Sukkirei Knit

Urban Slacks

Air karu Easy Pants	sala sala relax blouse	Utsuku-shilhouette	MELTY KNIT
		Pants
FY2025/02 1Q			8

More Customer Points of Contact

• New Dot-ST stores

• Planning to add 8 stores during the current fiscal year; four are currently open.

• Events for visiting Dot-ST stores to meet popular STAFF BOARD salespeople

• Popular employees help maintain strong relationships with customers and increase mutually beneficial ties between physical stores and e-commerce.

Total 15 stores

In Japan

Features of "Dot-ST store"

Shot and smooth shoping

Hot items of ".st" site and outfit ideas from "STAFF BOARD" are already selected

Services tailored to "You"

Personalized suggestions through purchase history and try-on reservation.

Store or Online, as you like

It is possible to have items purchased at the store delivered to your home, or to purchase items not available at the store.

FY2025/02 1Q

9

Overseas Business

• Hong Kong: Sales and earnings increased because of new stores and more brands in the e-commerce channel
• Mainland China: Sales increased and loss narrowed despite soft consumer spending
• Taiwan: Sales and earnings up mainly due to new brands, new stores and the continuation of existing store sales growth
• Thailand: Sales are increasing at the first store, which opened in the second quarter of the previous fiscal year
• USA:Sales and earnings down as the wholesale business slowed down because of the uncertain economic outlook

					（Millions of yen）
		FY2023/12 1Q		FY2024/12 1Q
		Results		Results
				YoY	YoY
				(JPY)	(Local currency)
Net sales	5,096	6,053	118.8%	107.8%
	Hong Kong	822	1,151	139.9%	124.3%
	Mainland China *1	995	1,091	109.7%	102.3%
	Taiwan	1,369	1,926	140.6%	130.1%
	Thailand	-	78	-	-
	USA *2	1,908	1,805	94.6%	84.2%
Operating profit	137	31	22.7%	19.9%
	Hong Kong	6	46	741.0%	658.3%
	Mainland China *1	- 238	- 194	-	-
	Taiwan	254	345	135.4%	125.3%
	Thailand	- 29	- 31	-	-
	USA *2	144	- 134	-	-

	*1：Mainland Chaina : Net sales are shown before elimination of internal transactions
	*2：USA does not include the U.S. business of Zetton,inc.
FY2025/02 1Q	10