Morito : Consolidated Financial Results for the Nine Months of the Fiscal Year Ending November 30, 2023

Note: This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results for the Nine Months of the Fiscal Year Ending

November 30, 2023 [Japanese GAAP]

		October 13, 2023
Company name:	MORITO CO., LTD.	Stock exchange listing: Tokyo Stock Exchange
Code number:	9837	URL: https://www.morito.co.jp
Representative:	Takaki Ichitsubo, Representative Director, CEO
	Kiyomi Akui, Director, Senior Executive Officer, Division Manager of
Contact:	Corporate Administrative Division and Division Manager of Business (Phone) [phone]
	Management Division

Scheduled date of filing	October 16, 2023	Scheduled date of commencing	-
quarterly securities report:	dividend payments:
Availability of supplementary briefing material on quarterly financial results	: Available

Schedule of quarterly financial results briefing session : None scheduled

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

1. Consolidated Financial Results for the Nine Months of the Fiscal Year Ending November 30, 2023 (December 1, 2022 to August 31, 2023)

(1) Consolidated Operating Results

(% indicates changes from the previous corresponding period.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Nine months ended

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

35,551

1.1

1,750

10.3

1,993

14.0

1,729

39.2

August 31, 2023

Nine months ended

35,172

10.6

1,586

43.7

1,747

38.7

1,242

64.1

August 31, 2022

Nine months

Nine months

(Note) Comprehensive income: ended August 31,

2,537million yen[ (16.4)%] ended August 31, 3,034million yen[ 85.9%]

2023

2022

Basic earnings per

Diluted earnings per

share

share

Nine months ended

Yen

Yen

64.70

64.55

August 31, 2023

Nine months ended

46.08

-

August 31, 2022

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

Nine months ended

Millions of yen

Millions of yen

%

50,279

37,894

75.3

August 31, 2023

FY2022

50,271

36,684

72.9

(Reference) Equity:

Nine months ended

37,865million yen

FY2022

36,628million yen

August 31, 2023

2. Dividends

Annual dividends

1st quarter-

2nd quarter-

3rd quarter-

Year-end

Total

end

end

end

Yen

Yen

Yen

Yen

Yen

FY2022

-

13.50

-

18.50

32.00

FY2023

-

27.00

-

FY2023(Forecast)

27.00

54.00

(Note) Revision to the latest

announcement

of dividend forecast

: None

3. Consolidated Financial Results Forecast for the Fiscal Year Ending November 30, 2023 (December 1, 2022 to November 30, 2023)

(% indicates changes from the previous corresponding period.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	per share
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	50,000		3.1	2,400	13.4		2,700	15.3	2,200	31.4	82.29
(Note) Revision to the latest announcement of performance forecast	:	Yes

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Notes:

1. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in the scope of consolidation)
2. Adoption of special accounting treatment for preparing quarterly consolidated financial statements

• No
• No

(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	:	No
3)	Changes in accounting estimates	:	No
4)	Retrospective restatement	:	No

(4) Total number of issued shares (common shares)
1)	Total number of issued shares at the end	August 31, 2023:	30,000,000	November 30, 2022:	30,000,000
	of the period (including treasury shares):
2)	Total number of treasury shares at the	August 31, 2023:	3,323,100	November 30, 2022:	3,295,500
	end of the period:
3)	Average number of shares during the	For the nine months of		For the nine months of
	period:	the fiscal year ending	26,736,150	the fiscal year ended	26,960,430
		November 30, 2023:		November 30, 2022:

These quarterly consolidated financial results are outside the scope of audit by certified public accountants or audit

• firms.
• Explanation of the proper use of financial results forecast and other notes

The earnings forecasts and other forward-looking statements herein are based on information currently available and certain assumptions judged to be reasonable. Actual results may differ significantly from these forecasts due to a wide range of factors.

As for suppositions that form the assumptions for the forecast of financial results and cautionary notes concerning the use thereof, please refer to "(2) Forecast of Consolidated Business Results and other Forward-looking Information" in "1. Qualitative Information for the Period under Review" on page 5.

The Company and some of the Morito Group companies have introduced the "Japanese version of the employee stock ownership plan (J-ESOP)" and the "officer remuneration board incentive plan (BIP) trust." Consequently, the shares of the Company held by Custody Bank of Japan, Ltd. (trust account E) and The Master Trust Bank of Japan, Ltd. (officer remuneration BIP trust account), respectively, are included in treasury shares.

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Table of Contents
1. Qualitative Information for the Period under Review	4
(1)	Overview of Business Results for the Period under Review	4
(2)	Forecast of Consolidated Business Results and other Forward-looking Information	5
2. Quarterly Consolidated Financial Statements and Primary Notes	6
(1)	Quarterly Consolidated Balance Sheets	6
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	8
	Quarterly Consolidated Statements of Income	8
	Quarterly Consolidated Statements of Comprehensive Income	9
(3)	Notes to the Quarterly Consolidated Financial Statements	10
	(Notes on Going Concern Assumption)	10
	(Notes on Significant Changes in the Amount of Shareholders'Equity)	10
	(Changes in Accounting Policies)	10
	(Segment Information, Etc.)	11

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1. Qualitative Information for the Period under Review

1. Overview of Business Results for the Period under Review

For the nine months of the fiscal year ending November 30, 2023 (December 1, 2022 to August 31, 2023) saw economic activity steadily return to normal as the impact of the COVID-19 pandemic eased. However, the outlook for the future remains uncertain due to a sharp rise in raw material prices caused by the situation in Ukraine and other factors, accelerating global inflation and the possibility of an economic slowdown overseas, particularly in Europe and the U.S., as well as exchange rate fluctuations.

Working against this backdrop, the Morito Group (the "Group"), which is mainly engaged in the apparel, product, and transportation businesses, faced an uphill battle due to soaring raw material prices for its mainstay products and other factors, which all kept profits low, as well as stagnant demand caused by slowing consumption in Europe, the U.S., and Asia. On the other hand, the Group enjoyed favorable sales of accessories and products with superior functionality, including athletic shoes- and medical device-related products, which are unaffected by trends, while the performance of its kitchen appliance and related service business remained upbeat. Under its "Rideeco®" initiative aimed at realizing a sustainable society, the Group moved forward with the development and sales of environmentally friendly products, using discarded fishing nets and fabric scraps from garment factories, with a focus on winning new business contracts. The Group also enjoyed higher operating profit thanks to increased sales of high-value-added products and the enhanced efficiency of logistics operations.

As a result, for the nine months of the fiscal year under review, net sales increased 1.1% year on year to 35,551 million yen. Operating profit was up 10.3% to 1,750 million yen, ordinary profit grew 14.0% to 1,993 million yen, and profit attributable to owners of the parent increased 39.2% to 1,729 million yen.

Exchange rates used for the conversion of revenue and expenses of the Group's overseas subsidiaries during the preparation of consolidated financial statements for the nine months of the fiscal year under review are as follows.

	1Q		2Q		3Q
USD	141.39	(113.71)	132.43	(116.34)	137.49	(129.73)
EUR	144.26	(130.04)	142.17	(130.40)	149.58	(138.25)
CNY	19.85	(17.78)	19.35	(18.31)	19.56	(19.60)
HKD	18.07	(14.60)	16.89	(14.90)	17.54	(16.53)
TWD	4.51	(4.09)	4.36	(4.16)	4.48	(4.41)
VND	0.0058	(0.0050)	0.0056	(0.0051)	0.0059	(0.0056)
THB	3.89	(3.41)	3.91	(3.52)	3.99	(3.77)
MXN	7.19	(5.48)	7.11	(5.67)	7.79	(6.48)

(Note) The exchange rate of the same period in the previous fiscal year is stated in parentheses.

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Business results by segment are as follows.

Japan

The Apparel Division saw increases in sales of accessories for workwear and athletic shoes as well as for bags although sales of medical wear accessories for the European and the U.S. markets declined.

The Product Division enjoyed increases in sales of medical device-related products and products for one-coin shops (like 100-yen stores) as well as higher revenues for the kitchen appliance rental, sales, and cleaning business, despite declined sales of surfboard-related products.

In the Transportation Division, sales of automotive interior components to Japanese automotive manufacturers increased.

As a result, net sales grew 4.5% year on year to total 25,229 million yen, and segment profit rose 31.1% year on year to reach 1,531 million yen.

Asia

The Apparel Division enjoyed growing sales of baby wear accessories in China and Hong Kong as well as athletic shoe accessories and workwear-related products in Vietnam although sales of casual wear and workwear accessories for the European and the U.S. markets declined in China and Hong Kong.

In the Transportation Division, sales of automotive interior components to Japanese automotive manufacturers decreased in China due to the semiconductor shortage and China's zero-COVID policy in addition to the restructuring of unprofitable businesses.

As a result, net sales decreased 15.2% year on year to total 5,322 million yen while segment profit dropped 9.9% year on year to total 497 million yen.

Europe and the U.S.

In the Apparel Division, sales of accessories for casual wear and workwear decreased.

In the Transportation Division, sales of automotive interior components to Japanese automotive manufacturers increased.

As a result, net sales increased 5.1% year on year to total 4,999 million yen while segment loss came to 42 million yen (segment profit for the same period in the previous fiscal year was 126 million yen).

(2) Forecast of Consolidated Business Results and Other Forward-Looking Information

In the consolidated financial forecast for the fiscal year ending November 30, 2023, figures are expected to be higher than initially announced.

For more information, see "Notice Concerning Revision of Consolidated Financial Forecast for the Fiscal Year Ending November 30, 2023" announced today (October 13, 2023).

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