Treasure Factory : Consolidated Financial Results for the Three Months Ended May 31, 2022 (Japanese Accounting Standards)

Consolidated Financial Results for the Three Months Ended May 31, 2022

(Japanese Accounting Standards)

		July 13, 2022
Company name	Treasure Factory Co., Ltd.	Listings: 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:		July 13, 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 three months ended May 31, 2022 (March 1, 2022 to May 31, 2022)
(1) Operating results						(Percentage figures represent year-on-year changes)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	million yen		%	million yen	%	million yen	%	million yen	%
FY2023 Q1	6,733		18.8	766	123.3	786	114.9	532	117.1
FY2022 Q1	5,668		43.2	343	-	366	-	245	-

(Note) Comprehensive income:	FY2023 Q1	530 million yen (120.5%)
	FY2022 Q1	240 million yen (-%)

	Profit per share	Diluted profit per share
	yen	yen
FY2023 Q1	47.88	-
FY2022 Q1	21.86	-

(2) Financial position

		Total assets		Net assets		Equity capital ratio
			million yen		million yen		%
FY2023 Q1			12,376			5,374		41.6
FY2022			11,809			4,895		40.0
(Reference) Shareholders' equity:	FY2023 Q1			5,150 million yen
	FY2022			4,719 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
FY2022		-	8.00	-	9.00	17.00
FY2023		-
FY2023 (forecast)			10.00	-	10.00	20.00

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

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3. Results forecast for the fiscal year ending February 28, 2023 (March 1, 2022 to February 28, 2023)

(Percentage figures represent year-on-year changes)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Profit per share
		owners of parent
	million		%	million	%	million	%	million	%	yen
	yen		yen	yen	yen
First two quarters	12,430		15.8	625	302.6	650	258.7	426	842.7	38.33
Full year	26,038		11.7	1,400	40.7	1,430	35.7	886	25.9	79.72

(Note) Revisions to results forecast published most recently: Yes

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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: Yes
[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 May 31, 2022	11,598,800 shares	As of Feb. 28, 2022	11,598,800	shares
	(including treasury shares)
[2] Treasury shares at period-end
As of May 31, 2022	484,464 shares	As of Feb. 28, 2022	484,431	shares
[3] Average number of shares issued during the
As of May 31, 2022	11,114,347 shares	As of May 31, 2021	11,212,669	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 6 of the attached material.

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○ Table of Contents (Attachment)

1. Qualitative Information about the Quarterly Financial Results ………………………………………………………………	5
(1)	Explanation regarding the Non-consolidated Results of Operations ……………………………………………………	5
(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
	(Changes in accounting policies) ………………………………………………………………………………………	11
	(Segment Information, etc.) ……………………………………………………………………………………………	12
	(Material Post-Balance Sheet Events) …………………………………………………………………………………	13

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1. Qualitative Information about the Quarterly Financial Results

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

During the first quarter of the current consolidated cumulative period, restrictions on Japan's economic activities have been gradually eased and consumption has been slowly coming back to normal as cases of COVID-19 decreased. However, the economic outlook remains uncertain due to such factors as the yen's sharp falls and inflation coupled with resource shortages due to circumstances in Russia and Ukraine.

In the reuse industry, the market continues to grow as society works toward the Sustainable Development Goals (SDGs) and turns to reuse more consciously. In these circumstances, demand for purchases by neighborhood reuse stores steadily grew. In regard to sales, there remain considerable needs of consumers to buy daily necessities at bargain prices.

During the first quarter, the Treasure Factory Group enjoyed steady business that continued from the previous quarter. We achieved an operating profit of ¥766,129 thousand over the first quarter of the consolidated accounting period from March to May, which was far more than planned, and a record figure for our operating profit earned in the first quarter of a consolidated accounting period. On a non-consolidated basis, we opened 6 directly-managed stores, and existing stores also enjoyed steady sales. All Group companies that engage in the reuse business also saw steady sales, which led to more revenues and profits. Consequently, the results of operations for the first quarter of the current consolidated cumulative period show net sales of ¥6,733,664 thousand (up 18.8 percent year on year), operating profit of ¥766,129 thousand (up 123.3 percent year on year), ordinary profit of ¥786,565 thousand (up 114.9 percent year on year), and quarterly profit of ¥532,168 thousand attributable to owners of the parent (up 117.1 percent year on year).

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

Consolidated sales increased 18.3 percent year on year, non-consolidated sales increased 19.0 percent year on year, and non- consolidated sales at existing stores increased 7.1 percent year on year. In terms of sales by category, apparel sales increased

22.4 percent year on year partly because the temperature steadily rose over the months from March to May and demand for outfits for going out grew, and sales of household items also increased 18.7 percent year on year. As for electric appliances, sales rose 15.9 percent year on year as demand related to new styles of living grew in early spring, and as summer home appliances sold well early. Rising gold prices also helped significantly boost the sales of fashion items by 19.9 percent year on year and of hobby-related items, which we have been selling more than before since the pandemic started, by 8.4 percent year on year. As for e-commerce sales, we expanded offerings on our e-commerce site, thereby increasing consolidated e-commerce sales by 21.2 percent year on year.

Purchases of merchandise for the fiscal year under review increased 19.7 percent year on year, and non-consolidated purchases also grew by 15.3 percent. As for non-consolidated purchases by channel, in-store purchases showed a steady increase of 16.9 percent year on year. Home-delivery purchases dramatically increased by 35.4 percent year on year, and home-visit purchases continued favorably and increased 19.0 percent year on year.

During the first quarter of the current consolidated cumulative period, we opened 3 general reuse stores and 3 fashion reuse stores, the non-consolidated total being 6 stores. In terms of new stores by region, we opened 3 in Kanto, 2 in Kansai, and 1 in Chubu, maintaining a good balance of geographic locations. The numbers of stores at the end of the first quarter of the consolidated accounting period under review are as follows: 155 directly-managed stores and 4 franchise stores, the non- consolidated total being 159; and 226 stores in total across the Group.

These results added up to net sales of ¥6,519,621 thousand (up 18.3 percent year on year) and a segment profit of ¥1,139,669 thousand (up 52.6 percent year on year).

(Other)

Cariru, our rental business, successfully captured demand as people attended weddings and other events. Consequently, sales of the rental business increased 92.3 percent year on year.

These results added up to net sales of ¥254,994 thousand (up 54.1 percent year on year) and a segment profit of ¥77,118 thousand (the same period of the previous year saw ¥8,012 thousand in loss).

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