NARUMIYA INTERNATIONAL : Summary of Consolidated Financial Results for the Three Months Ended May 31,2022

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Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

July 12, 2022

Summary of Consolidated Financial Results for the Three Months Ended May 31, 2022 (Based on Japanese GAAP)

Company name:	NARUMIYA INTERNATIONAL Co.,Ltd
Stock exchange listing:	Tokyo
Stock code:	9275	URL https://www.narumiya-net.co.jp/ir/
Representative:	President, Representative Director and Chief	Toshiaki Ishii
Executive Officer
Inquiries:	Financial Director	Yoshiari Sakano	TEL [phone]
Scheduled date to file Quarterly Securities Report:	July 13, 2022

Scheduled date to commence dividend payments:

Preparation of supplementary material on financial results:

Holding of quarterly financial results meeting:

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the three months ended May 31, 2022 (from March 1, 2022 to May 31, 2022)

(1) Consolidated operating results (cumulative)				Percentages indicate year-on-year changes.
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Three months ended May 31, 2022	8,455		18.9	575	43.0	549	40.9	355	56.0
Three months ended May 31, 2021	7,113		53.8	402	-	390	-	227	-

Note: Comprehensive income	As of May 31, 2022: 351 million yen (57.6%) /	As of May 31, 2021: 223 million yen (-%)
		Earnings per share	Diluted earnings per share
			Yen			Yen
Three months ended May 31, 2022		35.11			-
Three months ended May 31, 2021		22.51			-
Note: Diluted earnings per share is not stated, as there are no dilutive shares.
(2) Consolidated financial position
		Total assets			Net assets		Equity ratio
		Millions of yen		Millions of yen			%
As of May 31, 2022			14,198			4,922			34.7
As of February 28, 2022			14,521			4,901			33.8
Reference: Shareholders' equity		As of May 31, 2022: 4,922 million yen		As of February 28, 2022: 4,901 million yen
2. Cash dividends
				Annual dividends per share
		1st quarter-end	2nd quarter-end	3rd quarter-end		Fiscal year-end	Total
		Yen		Yen		Yen		Yen		Yen
Year ended February 28, 2022		-		0.00		-	31.00	31.00
Year ending February 28, 2023		-
Year ending February 28, 2023 (Forecast)			0.00		-	31.00	31.00

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

3. Forecast of consolidated financial results for the year ending February 28, 2023 (from March 1, 2022 to February 28, 2023) Percentages indicate year-on-year changes.

Net sales

Operating profit

Ordinary profit

Profit attributable to

Earnings per share

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Full year

34,500

-

1,450

3.4

1,404

5.4

830

1.2

82.06

Note:

Revision to the most recently announced consolidated forecast: None

As the Company has applied the "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan

Statement No. 29, March 31, 2020), etc. from the beginning of the first three months of the current fiscal year, the above forecasts

of consolidated financial results are the amounts after these are applied, and year-on-year changes of net sales are not indicated.

4. Notes

(1)

Changes in significant subsidiaries during the three months ended May 31, 2022

(changes in specified subsidiaries resulting in the change in scope of consolidation):

No

(2)

Application of special accounting methods for preparing quarterly consolidated financial statements:

No

(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements

Changes in accounting policies due to revisions to accounting standards and other regulations:	Yes
Changes in accounting policies due to other reasons:	No
Changes in accounting estimates:	No
Restatement of prior period financial statements:	No

(4) Number of issued shares (common shares)

Total number of issued shares at the end of the period (including treasury shares)

As of May 31, 2022	10,122,830 shares	As of February 28, 2022	10,122,830 shares
Number of treasury shares at the end of the period
As of May 31, 2022	122 shares	As of February 28, 2022	122 shares
Average number of shares during the period (cumulative from the beginning of the fiscal year)
Three months ended May 31, 2022	10,122,708 shares	Three months ended May 31, 2021	10,122,758 shares

Note1: The current quarterly financial report is not subject to quarterly review procedures by certified public accountants or auditing firms.

Note2: Explanation and other special notes concerning the appropriate use of business performance forecasts

The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable, and are not promise by the Company regarding their achievement. Actual results may differ materially from the forecast depending on a range of factors. For the assumptions that form the basis of the earnings forecasts and notes on the use of the earnings forecasts, refer to "1. Qualitative Information on quarterly consolidated financial performance (3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information" on page 3 of the attachment.

Attached Material
1. Qualitative information on quarterly consolidated financial performance..........................................................	2
(1)	Explanation of Results of Operations ...........................................................................................................	2
(2)	Explanation of Financial Position.................................................................................................................	2
(3)	Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information .......................	3
2. Quarterly consolidated financial statements........................................................................................................	4
(1)	Consolidated balance sheets .........................................................................................................................	4
(2)	Consolidated statements of income (cumulative) and consolidated statements of comprehensive income
	(cumulative)..................................................................................................................................................	6
	Consolidated statements of income (cumulative) .........................................................................................	6
	Consolidated statements of comprehensive income (cumulative) ................................................................	7
(3)	Notes Concerning Quarterly Consolidated Financial Statements.................................................................	8
	(Going concern assumptions) .......................................................................................................................	8
	(Notes regarding significant changes in the amount of shareholders' equity) ..............................................	8
	(Changes in accounting policies)..................................................................................................................	8

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1. Qualitative information on quarterly consolidated financial performance

The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020; hereinafter "Revenue Recognition Accounting Standard"), etc. from the start of the first quarter consolidated fiscal period. As a result, the accounting method differs between the first three months of the previous fiscal year and the entire period. For this reason, in the description of operating results below, the amount and percentage of year-on-year change are not included.

1. Explanation of Results of Operations
   Looking at Japan's economy during the first three months of the current fiscal year, despite no abatement in the spread of new coronavirus (COVID-19) infection, a state of emergency was not declared, and gradual recovery was seen in the economy. However, rises in global energy prices and in wide-ranging product prices became apparent following the invasion of Ukraine by Russia in February 2022, leading to global increases in prices of goods. The yen trended downward against the dollar, reaching the 130 yen/dollar range for the first time in approximately 20 years in 2002, leading to an increase in import costs.
   The major trading port of Shanghai, China, was placed under lockdown for about two months from the end of March, with severe impacts on trade.
   In the apparel industry to which the Group belongs, delays in deliveries occurred due to the effects of production and logistics in China. We believe that recovery is still underway in supply chains.
   Amid this environment, turmoil related to delivery delays occurred in the Group, for reasons including the status of China as the Group's main supplier. Through cooperation with supplier trading companies, however, delivery dates are returning to normal. While purchase prices have risen due to depreciation of the yen, we are making efforts to minimize impacts through refinements to specifications, designs, and selling prices. As in the previous year, we planned carefully selected store openings and are proceeding according to schedule. Unlike in the previous consolidated fiscal year, during the first three months of the current fiscal year we implemented no large-scale store closures, shortening of business hours, etc., and sales at physical outlets recovered under normal business operation. However, e-commerce sales remain sluggish due to the division of customer purchasing behavior between physical outlets and e-commerce.
   Looking at the status of store openings and closings during the first three months of the current fiscal year, we opened three stores in department stores, three stores in shopping centers, and two outlet stores. There were six store closings. Our subsidiary LOVST opened two outlets.
   As a result of the above, in the first three months of the current fiscal year we recorded net sales of 8,455 million yen (7,113 million yen in the same quarter in the previous fiscal year), operating profit of 575 million yen (402 million yen in the same quarter in the previous fiscal year), ordinary profit of 549 million yen (390 million yen in the same quarter in the previous fiscal year), and profit attributable to owners of parent of 355 million yen (227 million yen in the same quarter in the previous fiscal year).
   For details on the impact of the application of the Revenue Recognition Accounting Standards on financial position and business results, see "2. Quarterly consolidated financial statements (3) Notes Concerning Quarterly Consolidated Financial Statements (Changes in Accounting Policies)."
   As the Group has a single segment for planning and sales of kids wear, disclosure of operating results by segment has been omitted.
2. Explanation of Financial Position
   Assets
   Assets at the end of the first quarter decreased by 323 million yen from the end of the previous fiscal year to 14,198 million yen. This was mainly due to decreases of 514 million yen in cash and deposits, 45 million yen in notes and accounts receivable-trade, 57 million yen in goodwill, and 65 million yen in deferred tax assets, as well as an increase of 405 million yen in merchandise.
   Liabilities
   Liabilities at the end of the first quarter decreased by 344 million yen from the end of the previous fiscal year to 9,275 million yen. This was mainly due to decreases of 200 million yen in accounts payable-other and 236 million yen in income taxes payable, and an increase of 123 million yen in provision for bonuses.
   Net assets
   Total net assets at the end of the first quarter increased by 21 million yen from the end of the previous fiscal year to 4,922 million yen. This was mainly due to the recording of 355 million yen in profit attributable to owners of parent and the payment of 313 million yen in dividends.
3. • 2 -

1. Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information
   In the full-year consolidated earnings forecast, there is no change to the earnings forecast announced on April 12, 2022. The above forecasts were prepared based on information available as of the date of publication of this document and on certain assumptions deemed to be reasonable. Actual results, etc. may differ significantly from these forecasts due to a variety of factors.

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