Summary of Consolidated Financial Results
for the Third Quarter of the Fiscal Year Ending February 29, 2024
(Nine Months Ended November 30, 2023)
[Japanese GAAP] | |||
December 29, 2023 | |||
Company name: | Adastria Co., Ltd. | Listing: Tokyo Stock Exchange | |
Stock code: | 2685 | URL: https://www.adastria.co.jp | |
Representative: | Osamu Kimura, Representative Director and President | ||
Contact: | Itsuo Iwakoshi, Senior Executive Officer, General Manager of | ||
Administration Division, Head of Corporate Planning Office | Tel: +81-3-5466-2060 | ||
Scheduled date of filing of Quarterly Report: | January 12, 2024 | ||
Scheduled date of payment of dividend: | - | ||
Preparation of supplementary materials for quarterly financial results: Yes | |||
Holding of quarterly financial results meeting: | Yes (for investors) |
Note: The original disclosure in Japanese was released on December 29, 2023 at 15:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)
1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending February 29, 2024 (March 1, 2023 - November 30, 2023)
(1) Consolidated results of operations (cumulative) | (Percentages represent year-on-year changes) | ||||||||
Net income | |||||||||
Net sales | Operating profit | Ordinary profit | attributable to | ||||||
owners of the parent | |||||||||
Million yen | % | Million yen | % | Million yen | % | Million yen | % | ||
Nine months ended Nov. 30, 2023 | 203,252 | 14.8 | 16,306 | 46.0 | 16,708 | 41.5 | 11,541 | 51.5 | |
Nine months ended Nov. 30, 2022 | 177,026 | 20.6 | 11,165 | 149.0 | 11,805 | 106.2 | 7,616 | 115.5 |
Note: Comprehensive income | Nine months ended Nov. 30, 2023: | 12,434 million yen | (up 47.7%) | ||||||||||||
Nine months ended Nov. 30, 2022: | 8,419 million yen | (up 125.5%) | |||||||||||||
Net income per share | Diluted net income per share | ||||||||||||||
Yen | Yen | ||||||||||||||
Nine months ended Nov. 30, 2023 | 254.10 | - | |||||||||||||
Nine months ended Nov. 30, 2022 | 168.09 | - | |||||||||||||
(2) Consolidated financial position | |||||||||||||||
Total assets | Net assets | Equity ratio | |||||||||||||
Million yen | Million yen | % | |||||||||||||
As of Nov. 30, 2023 | 130,181 | 69,871 | 52.5 | ||||||||||||
As of Feb. 28, 2023 | 111,392 | 60,762 | 53.3 | ||||||||||||
Reference: Shareholders' equity As of Nov. 30, 2023: 68,337 million yen | As of Feb. 28, 2023: | 59,407 million yen | |||||||||||||
2. Dividends | |||||||||||||||
Dividend per share | |||||||||||||||
1Q-end | 2Q-end | 3Q-end | Year-end | Total | |||||||||||
Yen | Yen | Yen | Yen | Yen | |||||||||||
Fiscal year ended Feb. 28, 2023 | - | 25.00 | - | 35.00 | 60.00 | ||||||||||
Fiscal year ending Feb. 29, 2024 | - | 35.00 | - | ||||||||||||
Fiscal year ending Feb. 29, 2024 (forecast) | 45.00 | 80.00 |
Note: Revision to the most recently announced dividend forecast: None
3. Consolidated Forecast for the Fiscal Year Ending February 29, 2024 (March 1, 2023 - February 29, 2024)
(Percentages represent year-on-year changes)
Net sales | Operating profit | Ordinary profit | Net income attributable | Net income | ||||||
to owners of the parent | per share | |||||||||
Million yen | % | Million yen | % | Million yen | % | Million yen | % | Yen | ||
Full year | 270,000 | 11.3 | 18,000 | 56.3 | 18,200 | 51.3 | 12,000 | 59.1 | 263.65 |
Note: Revision to the most recently announced consolidated forecast: None
* Notes
- Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None
Newly added: - | Excluded: - |
- Application of special accounting methods for presenting quarterly consolidated financial statements: None
- Changes in accounting policies and accounting-based estimates, and restatements
- Changes in accounting policies due to revisions in accounting standards, oth ers: Yes
- Changes in accounting policies other than 1) above: None
- Changes in accounting-based estimates: None
- Restatements: None
Note: Please refer to the section "2. Quarterly Consolidated Financial Statements and Notes, (3) Notes to Quarterly Consolidated Financial Statements, Changes in Accounting Policies" on page 9 for further information.
- Number of outstanding shares (common stock)
- Number of shares outstanding at the end of the period (including treasury shares)
As of Nov. 30, 2023: | 48,800,000 shares | As of Feb. 28, 2023: | 48,800,000 shares |
2) Number of treasury shares at the end of the period
As of Nov. 30, 2023: | 3,520,708 shares | As of Feb. 28, 2023: | 3,449,391 shares |
3) Average number of shares outstanding during the period | |||
Nine months ended Nov. 30, 2023: | 45,420,607 shares | Nine months ended Nov. 30, 2022: | 45,313,566 shares |
Note 1: The current quarterly financial report is not subject to quarterly review procedures by certified public accountants or auditing firms.
Note 2: Cautionary statement with respect to forward-looking statements
Forward-looking statements in this report are based on currently available information and certain assumptions judged to be reasonable. Actual results may differ significantly from these forecasts for a number of factors. Please refer to the section "1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecast and Other Forward-looking Statements" on page 4 regarding preconditions or other related matters for the forecast shown above.
Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2024 Fiscal Year
Contents of Attachments | ||
1. Qualitative Information on Quarterly Consolidated Financial Performance | 2 | |
(1) | Explanation of Results of Operations | 2 |
(2) | Explanation of Financial Position | 3 |
(3) | Explanation of Consolidated Forecast and Other Forward-looking Statements | 4 |
2. Quarterly Consolidated Financial Statements and Notes | 5 | |
(1) | Quarterly Consolidated Balance Sheet | 5 |
(2) | Quarterly Consolidated Statements of Income and Comprehensive Income | 7 |
(3) | Notes to Quarterly Consolidated Financial Statements | 9 |
Going Concern Assumption | 9 | |
Significant Changes in Shareholders' Equity | 9 | |
Changes in the Scope of Consolidation or Application of the Equity Method | 9 | |
Changes in Accounting Policies | 9 | |
Additional Information | 9 | |
Quarterly Consolidated Balance Sheet | 9 | |
Segment Information | 10 | |
3. Supplementary Information | 11 | |
(1) | Sales for Brands and Regions | 11 |
(2) | Sales for Merchandise Categories | 11 |
(3) | Number of Stores | 12 |
- 1 -
Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2024 Fiscal Year
1. Qualitative Information on Quarterly Consolidated Financial Performance
(1) Explanation of Results of Operations
Consolidated results | (Million yen) | |||
First nine months of FY2/23 | First nine months of FY2/24 | YoY change | YoY change | |
(Mar. 1, 2022 - Nov. 30, 2022) | (Mar. 1, 2023 - Nov. 30, 2023) | (Amount) | (%) | |
Net sales | 177,026 | 203,252 | 26,225 | 14.8 |
Operating profit | 11,165 | 16,306 | 5,141 | 46.0 |
Ordinary profit | 11,805 | 16,708 | 4,902 | 41.5 |
Net income attributable | 7,616 | 11,541 | 3,924 | 51.5 |
to owners of the parent | ||||
During the first nine months (March 1 - November 30, 2023) of the current fiscal year, there was rapid progress with the return to normal economic and social activity in Japan as demand associated with outings and foreign tourists increased following the downgrading of the classification of COVID -19 by the Japanese government in May. Consumer spending continues to recover due to the slow improvement in personal income and other reasons. Although hot summer and late summer heat negatively affected fashion sales, the desire of consumers to purchase apparel and other fashion products remains strong. The outlook for the economy is still unclear because of the prolonged Ukraine conflict, turmoil in the Middle East, high prices of resources and energy, foreign exchange rate movements, rising prices in Japan and other countries, ongoing labor shortages and other reasons.
The Adastria Group has made steady progress with initiatives based on the following strategies for growth in the medium-term management plan.
Growth Strategy Ⅰ Multi-Brand,Multi-Category | Grouping of brands according to roles for improved | |
profitability and growth | ||
Growth Strategy IⅠ | Digital Customer Interactions and Services | Accelerate growth of our EC site and create a fun EC |
community | ||
Growth Strategy ⅠII | Glocal | Develop models in Mainland China and cultivate |
Southeast Asia | ||
Growth Strategy ⅠV | New Business | Establish a food and beverage business and create new |
appeal | ||
Consolidated net sales increased 14.8% year-on-year to 203,252 million yen, operating profit increased 46.0% to 16,306 million yen, ordinary profit increased 41.5% to 16,708 million yen, and net income attributable to owners of the parent increased 51.5% to 11,541 million yen.
In the Apparel and Sundry Goods-related business, sales in Japan were up 12.7% from one year earlier. Sales growth was backed by the continuing increase in opportunities for outings and the rising popularity of casual apparel. Higher sales were also attributable to accurate responses to late summer heat, , mild winter and other weather conditions, the ability to sell merchandise that reflects current trends, the successful launch of hit products, and revisions of prices to reflect more added value.
There were many initiatives involving our digital strategy. Major activities include "Dot-ST Fes" promotions linking the TV commercials for the Adastria "Dot-ST"e-commerce website with physical stores, the sale of merchandise using popular artists and collaborations with other companies, and more merchandise of other companies to enlarge the lineup of products. As a result, the number of members of "Dot-ST" is now 17.1 million,
1.6 million more than at the end of the previous fiscal year. E-commerce sales increased 13.1% in part because subsidiary BUZZWIT Co., Ltd., which operates an e -commerce business, acquired and absorbed OPEN AND NATURAL Inc., a children's clothing e-commerce company that has been a consolidated subsidiary since the second quarter of the previous fiscal year.
Sales increased 91.6% in Mainland China, 29.8% in Hong Kong and 50.1% in Taiwan mainly because of the decline in the impact of the pandemic and the opening of new stores. In Taiwan, new stores that were added based on the multi-brand strategy made a contribution to sales growth. In the United States, there was a slowdown of wholesale
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Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2024 Fiscal Year
sales beginning in the second quarter caused by uncertainty about the economic outlook. However, sales in the first nine months were 5.9% higher than one year earlier. As a result, total overseas sales, which are based on yen conversions of local currency sales, were up 33.2%. Operations in Thaila nd started in the first quarter of the current fiscal year.
In the Other segment, which is the food and beverage business, the business climate remains challenging because of the high cost of raw materials and utilities, the labor shortage and other diffi culties. Despite these challenges, sales increased 29.2% as more people go out following the end of the pandemic and as expenditures on food and beverage services increase.
Profitability improved despite the continuing negative effects of the yen 's depreciation and the rising cost of raw materials. Earnings are benefiting from the control of inventories by supplying merchandise at the right times, prices and volumes, measures to limit sales of merchandise at discounts, additions of more values to merchandise, revisions of prices to maintain the proper balance with the value of merchandise , and the shift to suppliers in the ASEAN region to hold down production expenses. In addition, there was an improvement in the gross profit margin of the Apparel and Sundry Goods-related business as a result of the temporary expiration of points due to a revision of our loyalty point program and of higher profitability in the overseas business. In the Other segment (the food and beverage business), the gross profit margin declined mainly because of the high cost of raw materials, but the consolidated gross profit margin improved 0.3 percentage points from one year earlier to 56.7%.
Selling, general and administrative expenses increased mainly because of higher employee remuneration and increases in personnel expenses, store leasing expenses, credit card fees and other items along with sales growth. However, due to the increase in sales, the SG&A to sales ratio decreased 1.4 percentage points from one year earlier to 48.7% and operating profit increased 46.0%.
Non-operating income includes foreign exchange gains of 303 million yen and there was an extraordinary loss of 128 million yen for the impairment of store assets.
Business segment performance was as follows.
1) Apparel and Sundry Goods-related Business
As a result of the activities in this business explained earlier, sales were 193,270 million yen and segment profit was 16,582 million yen.
We opened 98 stores (including 27 overseas) and closed 26 stores (including 3 overseas), resulting in a total of 1,507 stores (including 119 overseas) at the end of the first nine months of the fiscal year.
2) Other (Food and Beverage Business)
Sales were 10,019 million yen and segment profit was 125 million yen.
The number of stores at the end of the first nine months was 72, a result of opening of 5 stores and closing of 7 stores.
(2) Explanation of Financial Position
Total assets increased 18,789 million yen from February 28, 2023 to 130,181 million yen as of November 30, 2023. There were increases of 1,510 million yen in cash and deposits, 8,589 million yen in notes and accounts receivable- trade, 6,412 million yen in inventories and 1,274 million yen in store interior equipment, net.
Liabilities increased 9,680 million yen to 60,309 million yen. There were increases of 3,177 million yen in notes and accounts payable-trade, 1,350 million yen in electronically recorded obligations-operating and 3,835 million yen in accounts payable-other.
Net assets increased 9,109 million yen to 69,871 million yen. This was mainly due to increases of 8,345 million yen in retained earnings, 179 million yen in deferred gain or losses on hedges and 587 million yen in foreign currency translation adjustment.
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Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2024 Fiscal Year
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
There are no revisions to the consolidated forecast for the current fiscal year that was announced on September 29, 2023.
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Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2024 Fiscal Year
2. Quarterly Consolidated Financial Statements and Notes
(1) Quarterly Consolidated Balance Sheet
(Million yen) | |||
FY2/23 | Third quarter of FY2/24 | ||
(As of Feb. 28, 2023) | (As of Nov. 30, 2023) | ||
Assets | |||
Current assets | |||
Cash and deposits | 16,380 | 17,890 | |
Notes and accounts receivable-trade | 12,171 | 20,761 | |
Inventories | 24,679 | 31,092 | |
Other | 2,622 | 1,949 | |
Allowance for doubtful accounts | (81) | (136) | |
Total current assets | 55,772 | 71,557 | |
Non-current assets | |||
Property, plant and equipment | |||
Store interior equipment, net | 6,000 | 7,275 | |
Other, net | 16,064 | 16,821 | |
Total property, plant and equipment | 22,065 | 24,096 | |
Intangible assets | |||
Goodwill | 1,331 | 1,164 | |
Other | 10,577 | 11,119 | |
Total intangible assets | 11,908 | 12,283 | |
Investments and other assets | |||
Investment securities | 1,108 | 1,176 | |
Leasehold and guarantee deposits | 13,545 | 13,742 | |
Other | 7,289 | 7,622 | |
Allowance for doubtful accounts | (298) | (298) | |
Total investments and other assets | 21,645 | 22,243 | |
Total non-current assets | 55,619 | 58,623 | |
Total assets | 111,392 | 130,181 | |
Liabilities | |||
Current liabilities | |||
Notes and accounts payable-trade | 13,280 | 16,457 | |
Electronically recorded obligations-operating | 6,990 | 8,341 | |
Short-term borrowings | 197 | 1,000 | |
Current portion of long-term borrowings | 375 | 320 | |
Accounts payable-other | 12,114 | 15,950 | |
Income taxes payable | 2,970 | 3,751 | |
Provision for bonuses | 2,112 | 1,439 | |
Provision for point card certificates | 160 | 128 | |
Other provisions | 779 | 338 | |
Other | 5,008 | 5,445 | |
Total current liabilities | 43,989 | 53,171 | |
Non-current liabilities | |||
Long-term borrowings | 554 | 507 | |
Provisions | - | 124 | |
Other | 6,084 | 6,506 | |
Total non-current liabilities | 6,639 | 7,137 | |
Total liabilities | 50,629 | 60,309 | |
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Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2024 Fiscal Year
(Million yen)
FY2/23 | Third quarter of FY2/24 | ||
(As of Feb. 28, 2023) | (As of Nov. 30, 2023) | ||
Net assets | |||
Shareholders' equity | |||
Share capital | 2,660 | 2,660 | |
Capital surplus | 7,213 | 7,213 | |
Retained earnings | 55,968 | 64,314 | |
Treasury shares | (7,286) | (7,516) | |
Total shareholders' equity | 58,555 | 66,671 | |
Accumulated other comprehensive income | |||
Valuation difference on available-for-sale | 95 | 143 | |
securities | |||
Deferred gains or losses on hedges | (120) | 58 | |
Foreign currency translation adjustment | 877 | 1,465 | |
Total accumulated other comprehensive income | 852 | 1,666 | |
Non-controlling interests | 1,355 | 1,534 | |
Total net assets | 60,762 | 69,871 | |
Total liabilities and net assets | 111,392 | 130,181 | |
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Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2024 Fiscal Year
-
Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated Statement of Income
(For the Nine-month Period)
(Million yen) | |||
First nine months of FY2/23 | First nine months of FY2/24 | ||
(Mar. 1, 2022 - Nov. 30, 2022) | (Mar. 1, 2023 - Nov. 30, 2023) | ||
Net sales | 177,026 | 203,252 | |
Cost of sales | 77,238 | 87,927 | |
Gross profit | 99,787 | 115,324 | |
Selling, general and administrative expenses | 88,622 | 99,017 | |
Operating profit | 11,165 | 16,306 | |
Non-operating income | |||
Foreign exchange gains | 459 | 303 | |
Insurance claim income | 0 | 101 | |
Subsidy income | 212 | 38 | |
Subsidies for employment adjustment | 37 | - | |
Other | 228 | 232 | |
Total non-operating income | 938 | 675 | |
Non-operating expenses | |||
Interest expenses | 134 | 187 | |
Loss on valuation of derivatives | 106 | - | |
Other | 57 | 85 | |
Total non-operating expenses | 298 | 273 | |
Ordinary profit | 11,805 | 16,708 | |
Extraordinary losses | |||
Impairment loss | 50 | 128 | |
Total extraordinary losses | 50 | 128 | |
Net income before income taxes | 11,754 | 16,580 | |
Income taxes-current | 4,371 | 5,424 | |
Income taxes-deferred | (530) | (463) | |
Total income taxes | 3,841 | 4,960 | |
Net income | 7,913 | 11,619 | |
Net income attributable to non-controlling interests | 297 | 78 | |
Net income attributable to owners of the parent | 7,616 | 11,541 | |
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Adastria Co., Ltd. (2685) Summary of 3Q Financial Results for February 2024 Fiscal Year
Quarterly Consolidated Statement of Comprehensive Income
(For the Nine-month Period)
(Million yen) | ||
First nine months of FY2/23 | First nine months of FY2/24 | |
(Mar. 1, 2022 - Nov. 30, 2022) | (Mar. 1, 2023 - Nov. 30, 2023) | |
Net income | 7,913 | 11,619 |
Other comprehensive income | ||
Valuation difference on available-for-sale | 87 | 47 |
securities | ||
Deferred gains or losses on hedges | (283) | 179 |
Foreign currency translation adjustment | 702 | 587 |
Total other comprehensive income | 505 | 814 |
Comprehensive income | 8,419 | 12,434 |
Comprehensive income attributable to | ||
Comprehensive income attributable to owners of | 8,000 | 12,263 |
the parent | ||
Comprehensive income attributable to non- | 419 | 170 |
controlling interests | ||
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Adastria Co. Ltd. published this content on 29 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 December 2023 06:07:38 UTC.