AOKI : Summary of Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022

Company name: AOKI Holdings Inc.

Stock code: 8214

Representative: Akihiro Aoki, President

Contact: Haruo Tamura, Executive Vice President Scheduled date of filing of Quarterly Report:

Scheduled date of payment of dividend:

Preparation of supplementary materials for quarterly financial results: Holding of quarterly financial results meeting:

August 5, 2021

Summary of Consolidated Financial Results

for the First Quarter of the Fiscal Year Ending March 31, 2022

(Three Months Ended June 30, 2021)

[Japanese GAAP]

Listings: TSE First Section

URL: https://www.aoki-hd.co.jp/

Tel: [phone] August 6, 2021

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Yes

None

Note: The original disclosure in Japanese was released on August 5, 2021 at 15:30 (GMT +9).

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Three Months Ended June 30, 2021 (April 1, 2021 - June 30, 2021)

(1) Consolidated results of operations						(Percentages represent year-on-year changes)
		Sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
Three months ended Jun. 30, 2021	Million yen	%	Million yen		%	Million yen	%	Million yen	%
	32,905	25.6	(1,457)		-	(1,583)	-	(1,738)	-
Three months ended Jun. 30, 2020		26,204	(39.5)	(7,566)		-	(7,767)	-	(6,429)	-
Note: Comprehensive income (million yen)	Three months ended Jun. 30, 2021:	(1,699)	(-%)
		Three months ended Jun. 30, 2020:	(6,491)	(-%)
	Net income per share	Diluted net income per share
Three months ended Jun. 30, 2021		Yen			Yen
		(20.51)				-
Three months ended Jun. 30, 2020			(75.94)				-

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio
	Million yen	Million yen	%
As of Jun. 30, 2021		231,349	123,312	53.1
As of Mar. 31, 2021		237,260	125,850	52.9
Reference: Shareholders' equity (million yen)	As of Jun. 30, 2021: 122,897	As of Mar. 31, 2021: 125,487

2. Dividends

				Dividend per share
	1Q-end		2Q-end	3Q-end	Year-end	Total
	Yen		Yen	Yen	Yen	Yen
FY3/21		-	10.00	-	0.00	10.00
FY3/22		-
FY3/22 (forecasts)			5.00	-	5.00	10.00

Note: Revisions to the most recently announced dividend forecast: None

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2022 (April 1, 2021 - March 31, 2022)

								(Percentages represent year-on-year changes)
	Net sales		Operating profit	Ordinary profit		Profit attributable to	Net income per
			owners of parent	share
Full year	Million yen		%	Million yen	%	Million yen	%		Million yen	%	Yen
169,350		18.3	5,000	-	4,100		-	1,300	-	15.33
Note: Revisions to the most recently announced consolidated forecast: None

* Notes

1. Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None
2. Application of special accounting methods for presenting quarterly consolidated financial statements: None
3. Changes in accounting policies and accounting-based estimates, and restatements

1)	Changes in accounting policies due to revisions in accounting standards, others:	Yes
2)	Changes in accounting policies other than 1) above:	None
3)	Changes in accounting-based estimates:	None
4)	Restatements:	None

Note: Please refer to "Changes in Accounting Policies" on page 9 of the attachments for further information.

(4) Number of shares outstanding (common shares)

1)	Number of shares outstanding (including treasury stock) at the end of the period
	As of Jun. 30, 2021:	87,649,504 shares	As of Mar. 31, 2021:	90,649,504 shares
2)	Number of shares of treasury stock at the end of the period
	As of Jun. 30, 2021:	2,853,484 shares	As of Mar. 31, 2021:	5,853,274 shares
3) Average number of shares outstanding during the period
	Three months ended Jun. 30, 2021:	84,796,139 shares	Three months ended Jun. 30, 2020:	84,675,379 shares

Note 1: The current quarterly summary report is not subject to quarterly review by certified public accountants or auditing firms.

Note 2: Cautionary statement with respect to forecasts and other matters Cautionary statement with respect to forward-looking statements

Forecasts and forward-looking statements in these materials are based on assumptions judged to be valid and information available to the Company at the time the materials were created. These materials are not promises by the Company regarding future performance. Actual performance may differ significantly from these forecasts for a number of reasons. Please refer to "(3) Explanation of Consolidated Forecast and Other Forward-looking Statements" on page 4 of the attachments regarding preconditions or other related matters for the forecast shown above.

Supplementary materials for quarterly financial results

Supplementary materials for quarterly financial results will be available on the Company's website immediately after the earnings announcement on Thursday, August 5, 2021.

	AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2022
Contents of Attachments
		Pages
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 Statement of Income and
	Quarterly Consolidated Statement of Comprehensive Income	7
	Quarterly Consolidated Statement of Income	7
	Quarterly Consolidated Statement of Comprehensive Income	8
(3)	Notes to Quarterly Consolidated Financial Statements	9
	Going Concern Assumption	9
	Significant Changes in Shareholders' Equity	9
	Changes in Accounting Policies	9
	Additional Information	10
	Segment Information	10

1

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2022

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

In the first quarter of the current fiscal year, the COVID-19 pandemic continued to have an impact on the Japanese economy. Economic activity was restricted somewhat by a state of emergency, measures to prevent infections and other activities involving this crisis. Some businesses were required to suspend operations or reduce operating hours. Although there is progress with vaccinations in Japan, the outlook for the economy remains uncertain because there are still no signs of when this crisis will end.

Due to the activities explained in the following section that were accompanied by measures to prevent the spread of infections, the impact of the pandemic was less than one year earlier in all business segments. Net sales increased 25.6% year-on-year to 32,905 million yen, and operating loss was 1,457 million yen compared with a loss of 7,566 million yen one year earlier. There was an ordinary loss of 1,583 million yen compared with a loss of 7,767 million yen one year earlier. Loss attributable to owners of parent was 1,738 million yen compared with a loss of 6,429 million yen one year earlier.

The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the current fiscal year. The application of this standard reduced first quarter net sales by 1,015 million yen and decreased operating loss and ordinary loss by 247 million yen each.

Operating results by segment are as follows.

Fashion Business

At AOKI and ORIHICA, there have been consistently strong sales of pajama suits and Active Work Suits since the launch of these products. This apparel belongs to the new home and working style sector, which is a new category of merchandise for AOKI and ORIHICA. In addition, there were activities to expand the lineups of anti-microbial washable masks and washable suits for the spring and summer, both products needed during the pandemic, and of Biz Polo shirts, which is a summer fashion easily matched with other apparel. Another highlight of the first quarter was the full-scale start of activities to strengthen sales promotions, sales areas and customer services involving apparel for working women. Activities were linked with innovative apparel such as the Functional Jacket & Set-up lineup and 360° Kirei Pants. For more progress with the online/offline merger (OMO), all stores have started to offer the Take Out Service that allows customers to use the internet to review at any time product information that was received at a store and purchase items smoothly. One ORIHICA store was opened and three AOKI stores and three ORIHICA stores were closed to improve the efficiency of this business. There were 624 stores at the end of the first quarter (one combined AOKI/Size MAX store has been changed to counting each format separately) compared with 628 at the end of the previous fiscal year.

The performance of this segment improved because of these measures and benefited from a small decline in the negative effects of the pandemic. As a result, sales in this segment increased 4.6% to 17,364 million yen and operating loss was 1,169 million yen compared with a loss of 2,944 million yen one year earlier.

Anniversaire and Bridal Business

At all locations in this business, employees focused on working closely with customers who revised their wedding plans due to the pandemic and on rigorous activities to prevent infections. These activities made it possible for customers to hold weddings and receptions with confidence about the safety of these events. To reflect new life styles, this business offers chapel weddings, family weddings, photo weddings and other services. In addition, Anniversaire and Takami Bridal announced a new line of original dresses in the Arêve collection jointly developed by these two companies.

Due to these activities, the number of weddings during the first quarter was much higher than one year earlier when there were no weddings and receptions between April 7 and May 31. As a result, sales were 2,455 million yen compared with 253 million yen one year earlier and there was an operating profit of 97 million yen compared with a 1,324 million yen loss one year earlier.

2

AOKI Holdings Inc. (8214) First Quarter of the Fiscal Year Ending March 31, 2022

Entertainment Business

All locations of this business continued to operate while taking many steps to protect customers during the pandemic. The opening of the first café in Kochi prefecture completed the expansion of the network of KAIKATSU CLUB café complexes to all 47 prefectures of Japan. This business continues to use its strategy of establishing a dominant presence in targeted areas to increase its market share. There were many activities for the invigoration of existing cafés. Content was expanded, such as by distributing original Terashima Bunko videos, and the convenience of the KAIKATSU CLUB app was increased. Other activities included the launch of a new grand menu and menu items created jointly with other companies. In the COTE D'AZUR karaoke business, locations started providing a food serving service for safety during the pandemic along with the launch of a new grand menu. FiT24 self-service fitness clubs performed well as this business continued to add new locations while using its distinctive strengths to attract customers. During the first three months, we opened three KAIKATSU CLUBs and 14 FiT24 locations. Six KAIKATSU CLUBs and three COTE D'AZURs were closed for conversions and other measures to improve efficiency. As a result, there were 667 locations in this segment at the end of the first quarter compared with 659 at the end of the previous fiscal year.

The performance of this segment improved because of these measures and benefited from a decline in the negative effects of the pandemic. Sales in this segment increased 41.4% to 12,761 million yen and operating loss was 553 million yen compared with a loss of 3,524 million yen one year earlier.

Real Estate Leasing Business

Segment sales increased 8.3% to 1,053 million yen mainly because of an increase in the subleasing of stores and other facilities that were closed. Operating profit increased 27.1% to 248 million yen.

Information about the application of the accounting standard for revenue recognition, etc. and the effect of this standard for each business segment is shown in "Changes in Accounting Policies" on page 9 and "Segment Information, First three months of FY3/22, 3. Information related to revisions for reportable segments on page 11.

1. Explanation of Financial Position Balance sheet position
   Assets

Total assets at the end of the first quarter decreased 5,910 million yen from the end of the previous fiscal year to 231,349 million yen mainly due to a decrease in accounts receivable-trade.

Current assets decreased 6,530 million yen from the end of the previous fiscal year. There was a decrease of 5,791 million yen in accounts receivable-trade due to seasonal factors. Non-current assets increased 620 million yen from the end of the previous fiscal year as there was an increase of 724 million yen in other under investments and other assets which includes deferred tax assets.

Liabilities

Current liabilities decreased 10,800 million yen from the end of the previous fiscal year. There was a decrease of 3,358 million yen in accounts payable-trade mainly due to seasonal factors and repayments of short-term borrowings of 5,000 million yen. Non-current liabilities increased 7,428 million yen due to long-term borrowings of 9,000 million yen.

Net assets

Net assets decreased 2,538 million yen from the end of the previous fiscal year. There was a decrease of 2,628 million yen in retained earnings due to a loss attributable to owners of parent and the application of the accounting standard for revenue recognition, etc.

3