JINS : Consolidated Financial Results for the Six Months Ended February 28, 2022

Consolidated Financial Results for the Six Months Ended February 28, 2022

[Japanese GAAP]

April 8, 2022

Company name: JINS HOLDINGS Inc.

Stock exchange listing: Tokyo Stock Exchange Code number: 3046

URL:https://jinsholdings.com

Representative: Hitoshi Tanaka, CEO and Representative Director

Contact: Mikiya Yamawaki, Executive Officer and General Manager, Investor Relations Division Phone: [phone]

Scheduled date of filing quarterly securities report: April 8, 2022 Scheduled date of commencing dividend payments: May 13, 2022

Availability of supplementary briefing material on quarterly financial results: Available

Schedule of quarterly financial results briefing session: Scheduled (for analysts and institutional investors)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Six Months Ended February 28, 2022 (September 1, 2021 to

February 28, 2022)

(1) Consolidated Operating Results (% indicates changes from the previous corresponding period.)

Net sales	Operating profit	Ordinary profit	Profit attributable to owners of parent
Six months ended February 28, 2022 February 28, 2021	Million yen % 32,704 3.4 31,643 0.4	Million yen % 1,902 (28.5) 2,662 (18.9)	Million yen % 2,172 (15.9) 2,584 (23.3)	Million yen % 1,170 (38.8) 1,913 (7.3)

32,704	3.4	1,902	(28.5)	2,172	(15.9)	1,170	(38.8)
31,643	0.4	2,662	(18.9)	2,584	(23.3)	1,913	(7.3)

(Note) Comprehensive income: Six months ended February 28, 2022: ¥1,289 million [(38.1)%]

Six months ended February 28, 2021: ¥2,084 million [5.7%]

Earnings per share	Diluted earnings per share
Six months ended February 28, 2022 February 28, 2021	Yen 50.14 81.99	Yen 44.86 74.35

(2) Consolidated Financial Position

Total assets	Net assets	Equity ratio
As of February 28, 2022 As of August 31, 2021	Million yen 53,993 53,007	Million yen 21,030 20,219	% 38.9 38.1

(Reference) Equity: As of February 28, 2022: ¥21,030 million

As of August 31, 2021: ¥20,219 million

2. Dividends

Annual dividends
1st quarter-end	2nd quarter-end	3rd quarter-end	Year-end	Total
Fiscal year ended August 31, 2021 Fiscal year ending August 31, 2022	Yen  	Yen 25.00	Yen 	Yen 20.00	Yen 45.00
17.00
Fiscal year ending August 31, 2022 (Forecast)		37.00	54.00

(Note) Revision to the forecast for dividends announced most recently: No

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending August 31, 2022 (September 1, 2021 to August 31, 2022)

(% indicates changes from the previous corresponding period.)

Net sales	Operating profit	Ordinary profit	Profit attributable to owners of parent	Earnings per share
Full year	Million yen 71,155 % 11.4	Million yen 7,177 % 42.1	Million yen 7,011 % 39.6	Million yen 4,033 % 22.5	Yen 172.80

(Note) Revision to the financial results forecast announced most recently: No

* Notes:

• (1) Changes in significant subsidiaries during the six months ended February 28, 2022 (changes in specified subsidiaries resulting in changes in scope of consolidation): None

• (2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: None

• (3) Changes in accounting policies, changes in accounting estimates and retrospective restatement

  • 1) Changes in accounting policies due to the revision of accounting standards: Yes

  • 2) Changes in accounting policies other than 1) above: None

  • 3) Changes in accounting estimates: Yes

  • 4) Retrospective restatement: None

• (4) Total number of issued shares (common shares)

  • 1) Total number of issued shares at the end of the period (including treasury stock):

    February 28, 2022: 23,980,000 shares

    August 31, 2021: 23,980,000 shares

  • 2) Total number of treasury stock at the end of the period:

    February 28, 2022: 639,784 shares

    August 31, 2021: 639,784 shares

  • 3) Average number of shares during the period (Accumulated total of the quarter):

Six months ended February 28, 2022: 23,340,216 shares

Six months ended February 28, 2021: 23,340,217 shares

*This quarterly financial report is outside the scope of quarterly review by Certified Public Accountants or an

Audit firm.

*Explanation of the proper use of financial results forecast and other notes

Forward-looking statements in this document, such as the financial results forecast, are based on information currently available to the Group and certain assumptions that the Group has deemed reasonable. These statements are not intended as the Group's commitment to achieve them, and actual performance may differ significantly due to various factors. For the assumptions for financial results forecast and precautions for using financial results forecast, please refer to "1. Qualitative Information on Quarterly Financial Results for the Period under Review, (3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information" on page 4 of the attached document.

(How to obtain the supplementary briefing materials on quarterly financial results)

The Company plans to hold a financial results briefing for analysts and institutional investors on Friday, April 8, 2022. Financial results materials to be used at the briefing will be available on the Company's website immediately after the session.

Table of Contents

1. Qualitative Information on Quarterly Financial Results for the Period under Review ......................... 2

(1) Explanation of Business Results ....................................................................................................... 2

(2) Explanation of Financial Position ..................................................................................................... 4

(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information . 4

2. Quarterly Consolidated Financial Statements and Primary Notes ........................................................ 5

(1) Quarterly Consolidated Balance Sheets ............................................................................................ 5

(2) Quarterly Consolidated Statements of Income and Comprehensive Income .................................... 7

(3) Notes to Quarterly Consolidated Financial Statements ..................................................................... 9

(Notes on going concern assumption) ............................................................................................. 9

(Notes in the case of significant changes in shareholders' equity) .................................................. 9

(Changes in accounting policies) ....................................................................................................... 9

(Changes in accounting estimates) .................................................................................................. 10

(Segment information) ................................................................................................................... 10

(Additional information) ................................................................................................................ 11

1. Qualitative Information on Quarterly Financial Results for the Period under Review

(1) Explanation of Business Results

During the six months ended February 28, 2022 (September 1, 2021 to February 28, 2022), the Japanese economy experienced the continued seesawing impact of the novel coronavirus disease (COVID-19) on personal consumption as semi-emergency coronavirus measures were declared again in mid-January due to the prevalence of variants despite the complete lifting from October onward of the state of emergency, etc., which had been declared due to the spread of COVID-19, mainly in urban areas. Looking at the global economy, infection prevention measures, including travel restrictions, remain in place in many regions partly owing to the impact of COVID-19 variants. Particularly in China, urban areas have been intermittently locked down under the zero-Covid policy, leading to concerns about the impact on economic conditions. In addition, there are concerns about a possible worsening of economic conditions as the economic impact of the Russian invasion of Ukraine should be carefully watched and global inflation has become more apparent due to the rising price of crude oil and raw materials.

The domestic retail eyewear market (eyeglasses for vision correction) continues to experience ups and downs versus the same period of the previous year owing to the impact of COVID-19.

Under this market environment, in the eyewear business, the Company and its consolidated subsidiaries (collectively, the "Group") took such initiatives as promoting digital transformation, and strengthening development of innovative products, which they identified as management issues. In the domestic eyewear business, we worked to improve management efficiency and offer consumers a more convenient purchasing experience, including introducing a solution to improve supply and demand management with an eye on globalization using AI without relying on prior experience alone. With regard to product development, as part of our initiatives to realize "the world free from myopia," we conducted a joint project to develop an eyeglass-shaped, violet-light-emitting medical device designed to suppress progress of myopia, and total research and development expenses were ¥110 million for the six months ended February 28, 2022.

In terms of store development, the number of eyewear stores as of February 28, 2022, was 680, including 451 stores in Japan and 229 stores overseas (173 in China, 44 in Taiwan, 6 in Hong Kong, and 6 in the United States).

As a result, for the six months ended February 28, 2022, the Company posted net sales of ¥32,704 million (up 3.4% year-on-year) partly thanks to the impact of new store openings despite the impact of COVID-19. Operating profit was ¥1,902 million (down 28.5% year-on-year) partly owing to the effect of changes to revenue recognition standards, etc. Ordinary profit was ¥2,172 million (down 15.9% year-on-year), and profit attributable to owners of parent was ¥1,170 million (down 38.8% year-on-year), partly due to the recording of provision of allowance for office relocation expenses related to relocation of the Tokyo head office in extraordinary losses.

Business results by segment are as follows.

Net sales by business segment

Segment	For the six months ended February 28, 2022 (September 1, 2021 to February 28, 2022)	Percentage to the Company's net sales	Year-on-year change
Domestic eyewear business	¥25,630 million	78.4%	0.7%
Overseas eyewear business	¥7,074 million	21.6%	14.3%
Total	¥32,704 million	100.0%	3.4%

In the domestic eyewear business, the second release of the JINS Pokémon model, in which we incorporated Pokémon to eyewear designs through JINS' unique point of view, was well- received. Sales were also driven by high-value-added products, including "Airframe Hingeless," for which we eliminated the hinges connecting the front of the frame with the temples, creating a unique new fit and comfort for users. In addition, membership of the JINS app reached approximately 10.14 million people as of the end of February 2022 and e-commerce sales continued to grow at a steady pace. Also, sales of contact lenses, which provide JINS 1DAY, have grown as planned. Regarding the impact of COVID-19, although there were signs of a recovery in footfall to levels prior to the outbreak of the pandemic from October onward, when the declaration of a state of emergency, etc., was lifted, customer traffic has decreased as semi-emergency coronavirus measures were declared mainly in urban areas in mid-January due to the prevalence of COVID-19 variants. As such, the situation is still seesawing.

In terms of store development, the number of stores in Japan was 451 (21 openings and 4 closures) as of the end of the period under review.

As a result, net sales of the domestic eyewear business were ¥25,630 million (up 0.7% year-on-year), and segment operating profit was ¥1,921 million (down 22.2% year-on-year).

In the overseas eyewear business, profit significantly decreased in China as personal consumption stalled, owing partly to intermittent lockdowns of cities amid the continued strengthening of restrictions on individual movement imposed by the government as a measure to combat COVID-19, in addition to the impact of factors such as a fallback from the previous year, when there were exemptions to social security fees.

In Taiwan, profit increased as performance recovered steadily from the impact of COVID-19 infections, though our business was impacted by factors such as an increase in personnel expenses to secure opticians as required by the Optometric Personnel Act.

In Hong Kong, the slump in consumption due to the effects of protests resulting from political unrest and COVID-19 is on a recovery track, and business performance is also recovering steadily.

In the United States, we have reopened all of our brick-and-mortar stores, which had been closed due to the impact of COVID-19, and business performance is on a recovery track.

In terms of store development, the total number of stores overseas was 229 as of the end of the period under review, including 173 stores in China (9 openings and 6 closures), 44 in Taiwan (6 openings and no closures), 6 in Hong Kong (no openings or closures), and 6 in the United States (no openings or closures).

As a result, net sales of the overseas eyewear business were ¥7,074 million (up 14.3% year-on-year), and segment operating loss was ¥18 million (segment operating profit was ¥191 million for the same period of the previous year).