Treasure Factory : Consolidated Financial Results for the Nine Months Ended November 30, 2021 (Japanese Accounting Standards)

Consolidated Financial Results for the Nine Months Ended November 30, 2021

(Japanese Accounting Standards)

		January 12, 2022
Company name	Treasure Factory Co., Ltd.	Listings The First Section of the Tokyo Stock Exchange
Securities code	3093	URL: https://www.treasurefactory.co.jp/
Representative	President & CEO, Eigo Nosaka
Contact	Director & Manager-Corporate Planning, Eiji Kobayashi
Telephone	[phone]

Submission of statutory quarterly financial report:	January 12, 2022
Commencement of dividend payments:		-
Supplementary documents for quarterly results:	Yes
Quarterly results briefing:				No
					(Amounts in millions of yen rounded down to the nearest million yen)
1. Results for the nine months ended November 30, 2021 (March 1, 2021 to November 30, 2021)
(1) Operating results								(Percentage figures represent year-on-year changes)
												Profit attributable to owners of
		Net sales		Operating profit			Ordinary income		parent
		million yen		%	million yen		%		million yen		%	million yen	%
FY2022 Q3		16,886		25.8	580		－		619		884.3	332	－
FY2021 Q3		13,428		(4.5)	1		(99.9)		62		(91.8)	(75)	－

(Note) Comprehensive income:

FY2022 Q3 (nine months ended November 30, 2021)

328 million yen (-%)

FY2021 Q3 (nine months ended November 30, 2020)

(75) million yen (-%)

Profit per share

Diluted profit per share

yen

yen

FY2022 Q3

29.61

－

FY2021 Q3

(6.64)

－

(2) Financial position

Total assets

Net assets

Equity capital ratio

million yen

million yen

%

FY2022 Q3

11,433

4,574

38.8

FY2021

10,417

4,311

41.1

(Reference) Shareholders' equity:

FY2022 Q3 (nine months ended November 30, 2021)

4,437 million yen

FY2021 (year ended February 28, 2021)

4,284 million yen

2. Dividends

Dividend per share

End of 1st quarter

End of 2nd quarter

End of 3rd quarter

Fiscal year end

Total

yen

yen

yen

yen

yen

FY2021

－

2.00

－

8.00

10.00

FY2022

8.00

－

－

FY2022 (forecast)

8.00

16.00

(Note) Revisions to dividend forecast published most recently: No

3. Results forecast for the fiscal year ending February 28, 2022 (March 1, 2021 to February 28, 2022)

(Percentage figures represent year-on-year changes)

								Profit attributable to	Profit per share
	Net sales		Operating profit	Ordinary income	owners of parent
	million yen		%	million yen	%	million yen	%	million yen		%	yen
Full year	22,636		20.8	804	652.2	818	367.6	537		－	47.50

(Note) Revisions to results forecast published most recently: No

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* Notes

(1) Changes in important subsidiaries during the nine months of the current consolidated cumulative period under review (changes in specified subsidiaries that caused changes in the scope of consolidation): None

Number of new companies (their names): Number of excluded companies (their names):

(2) Adoption of accounting unique to the preparation of quarterly consolidated financial statements: None

(3) Changes to accounting policies, changes of accounting estimates, and revisions and restatements [1] Changes in accounting policies in accordance with changes in accounting principles: None

[2] Changes in accounting policies other than [1] above: None

[3] Changes in accounting estimates: None

[4] Revisions and restatements: None

(4) Number of shares issued and outstanding (common stock)

[1] Number of shares issued at period-end	As of Nov. 30, 2021	11,598,800	shares	As of Feb. 28, 2021	11,598,800	shares
(including treasury shares)
[2] Treasury shares at period-end
As of Nov. 30, 2021	386,131	shares	As of Feb. 28, 2021	386,131	shares
[3] Average number of shares issued during the
As of Nov. 30, 2021	11,212,669	shares	As of Nov. 30, 2020	11,315,769	shares
period

* These quarterly financial results are outside the scope of quarterly review procedures conducted by a certified public accountant or audit corporation.

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

Information relating to forecasts stated in this document was based on information available at the time of publication of the document. Actual results may differ materially from the forecasts due to a range of factors. For further information about the results forecast, please refer to (3) Explanation regarding the Information on Forecast including Consolidated Forecasts in 1. Qualitative Information about the Quarterly Financial Results on Page 4 of the attached material.

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○ Table of Contents (Attachment)

1. Qualitative Information about the Quarterly Financial Results ………………………………………………………………	4
(1)	Explanation regarding the Non-consolidated Results of Operations ……………………………………………………	4
(2)	Explanation regarding the Non-consolidated Financial Position …………………………………………………………	6
(3)	Explanation regarding the Information on Forecast including Consolidated Forecasts …………………………………	6
2. Quarterly Consolidated Financial Statements and Main Notes ………………………………………………………………	7
(1)	Quarterly Consolidated Balance Sheet ……………………………………………………………………………………	7
(2)	Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income ……	9
(3)	Notes on the Quarterly Consolidated Financial Statements ……………………………………………………………… 11
	(Notes on Going Concern Assumption) …………………………………………………………………………………	11
	(Notes on Substantial Changes in the Amount of Shareholders' Equity) ………………………………………………	11
	(Additional Information) ………………………………………………………………………………………………	11
	(Segment Information, etc.) ……………………………………………………………………………………………	11
	(Material Post-Balance Sheet Events) …………………………………………………………………………………	12

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1. Qualitative Information about the Quarterly Financial Results

(1) Explanation regarding the Non-consolidated Results of Operations

During the third quarter of the current consolidated cumulative period, cases of COVID-19 surged over the period between late July and August in Japan, yet new cases decreased as more and more people were vaccinated against COVID-19. Since the state of emergency was lifted at the end of September, restrictions on Japan's economic activities have been gradually eased and overall consumption has been picking up.

In these circumstances, demand for purchases by neighborhood reuse stores steadily grew due to increase in awareness of reuse as decluttering homes became part of people's lives and society moved toward the Sustainable Development Goals (SDGs). In regard to sales, there remained considerable needs of consumers to buy daily necessities at bargain prices.

During the third quarter, the Treasure Factory Group enjoyed strong purchases and sales owing partly to the termination of the state of emergency at the end of September. We achieved operating profit of ¥425,182 thousand over the months from September to November, which was a record figure for our operating profit earned in the third quarter of a consolidated accounting period. On a non-consolidated basis, we opened 14 directly-managed stores by the end of the third quarter, and existing stores also enjoyed steady sales. In regard to Group companies, from January 2021, sales of PickUP JAPAN were included in our financial results. In addition, Kindal, which engages in the reuse business, is seeing its sales and profits heading for recovery, although the sales of products and services for international visitors remain slow. On the other hand, selling, general and administrative expenses for new stores increased ¥1,577,912 thousand year on year as non-consolidated store openings went well. Of this increase, ¥112,000 thousand was recorded as share-based remuneration expenses that accompanied the issuance of performance-linked share acquisition rights.

Consequently, the results of operations for the third quarter of the current consolidated cumulative period show net sales of

¥16,886,967 thousand (up 25.8 percent year on year), operating profit of ¥580,412 thousand (up 55314.4 percent year on year), ordinary profit of ¥619,780 thousand (up 884.3 percent year on year), and quarterly profit of ¥332,013 thousand attributable to owners of the parent (the same period of the previous year saw quarterly loss of ¥75,083 thousand attributable to owners of the parent).

The results of operations sorted by segment are as stated below. (Reuse Business)

Consolidated sales increased 25.3 percent year on year, non-consolidated sales increased 13.5 percent year on year, and non- consolidated sales at existing stores increased 8.1 percent year on year. In terms of sales by category, apparel sales, which were greatly affected by the pandemic during the same period last year, made a recovery and increased 24.2 percent year on year, and sales of household items increased 16.6 percent year on year. As for electric appliances, sales dropped after the dramatic increase driven by special cash payments provided for residents in Japan during the second quarter of the last year. In addition, the sales of air conditioners and other summer appliances remained below our projection due to lower-than-normal temperatures in August. As a result, sales of electric appliances increased only 1.8 percent year on year. Sales of fashion items and hobby-related items showed significant increases of 52.5 percent and 42.8 percent year on year, respectively, as PickUP JAPAN's sales were included in the results. As for e-commerce sales, we expanded offerings on our e-commerce site to meet the demand for shopping from home, thereby increasing non-consolidatede-commerce sales on our website by 48.6 percent year on year.

Consolidated purchases of merchandise for the fiscal year under review increased 40.7 percent year on year partly because PickUP JAPAN's purchases were included. Non-consolidated purchases also grew by 24.0 percent. As for non-consolidated purchases by channel, in-store purchases showed a steady increase of 29.7 percent year on year. Home-visit purchases dramatically increased by 39.8 percent year on year, and home-delivery purchases continued favorably and increased 21.8 percent year on year.

During the third quarter of the current consolidated cumulative period, we opened 6 general reuse stores, 6 fashion reuse stores, and 2 brand-name item reuse stores, the non-consolidated total being 14 stores. In terms of new stores by region, we opened 9 in Kanto, 3 in Kansai, and 2 in Chubu, maintaining good balance of geographic locations. The numbers of stores at the end of the consolidated fiscal year under review are as follows: 146 directly-managed stores and 4 franchise stores, the non- consolidated total being 150; and 217 stores in total across the Group.

These results added up to net sales of ¥16,395,111 thousand (up 25.3 percent year on year) and the segment's profit of ¥1,699,624 thousand (up 72.9 percent year on year), demonstrating strong performance.

(Other)

Cariru, our rental business, successfully captured demand as people attended weddings and other events despite the pandemic. Consequently, sales of the rental business made a recovery and showed a dramatic increase of 200.6 percent year on year. The

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information system business, on the other hand, saw operating loss due to increased development costs.

These results added up to net sales of ¥520,139 thousand (up 40.2 percent year on year) and the segment's profit of ¥23,055 thousand (the same period of the previous year saw ¥45,629 thousand in loss).

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