FY2024/02 3rd Quarter
Financial Results
December 29, 2023
Table of Contents
• Consolidated Income Statement Summary | 4 | • | Progress with the Multi-brand Strategy | 12 | |
• Adastria and Major Domestic Subsidiaries | 6 | in Taiwan | |||
• | |||||
Income Statement | Consolidated Balance Sheet | 13 | |||
• | Product Promotion Activities | 7 | • | Number of Stores | 14 |
• | Online Business(Domestic) | 8 | • | Policy Concerning Store Opening Plan | 15 |
• | E-Commerce Activities | 9 | • | FY2024/02 Consolidated Forecast | 16 |
• | Overseas Business | 11 | (Unchanged) | ||
• Responses to the Current Business Climate | |||||
17 |
2
Consolidated Income Statement
Millions of yen
FY2023/02 3Q | FY2024/02 3Q | |||||||||||||
Nine Months Ended | Three Months Ended | Nine Months Ended | Three Months Ended | |||||||||||
Ratio | Ratio | Ratio | YoY | Ratio | YoY | |||||||||
Net sales | 177,026 | 100.0% | 64,448 | 100.0% | 203,252 | 100.0% | 114.8% | 70,355 | 100.0% | 109.2% | ||||
Adastria(Non-consolidated) | 144,913 | 81.9% | 52,575 | 81.6% | 161,683 | 79.5% | 111.6% | 55,072 | 78.3% | 104.7% | ||||
Domestic subsidiaries *1*2 | 14,942 | 8.4% | 5,529 | 8.6% | 18,422 | 9.1% | 123.3% | 6,930 | 9.9% | 125.3% | ||||
Overseas subsidiaries *3 | 12,528 | 7.1% | 4,762 | 7.4% | 16,667 | 8.2% | 133.0% | 5,980 | 8.5% | 125.6% | ||||
zetton (Food & Beverage Subsidiary) *4 | 7,303 | 4.1% | 2,616 | 4.1% | 9,788 | 4.8% | 134.0% | 3,578 | 5.1% | 136.8% | ||||
Gross profit | 99,787 | 56.4% | 37,007 | 57.4% | 115,324 | 56.7% | 115.6% | 40,462 | 57.5% | 109.3% | ||||
SG&A expenses | 88,622 | 50.1% | 31,412 | 48.7% | 99,017 | 48.7% | 111.7% | 34,467 | 49.0% | 109.7% | ||||
Advertising & promotion | 6,060 | 3.4% | 2,333 | 3.6% | 6,527 | 3.2% | 107.7% | 2,565 | 3.6% | 109.9% | ||||
Personnel | 32,105 | 18.1% | 10,993 | 17.1% | 36,216 | 17.8% | 112.8% | 12,298 | 17.5% | 111.9% | ||||
Rent & depreciation *5 | 31,685 | 17.9% | 11,258 | 17.5% | 34,861 | 17.2% | 110.0% | 12,231 | 17.4% | 108.6% | ||||
Amortization of goodwill | 191 | 0.1% | 69 | 0.1% | 168 | 0.1% | 88.1% | 55 | 0.1% | 79.4% | ||||
Others | 18,580 | 10.5% | 6,756 | 10.5% | 21,244 | 10.5% | 114.3% | 7,317 | 10.4% | 108.3% | ||||
Operating profit | 11,165 | 6.3% | 5,594 | 8.7% | 16,306 | 8.0% | 146.0% | 5,994 | 8.5% | 107.1% | ||||
Adastria(non-consolidated) | 9,948 | 5.6% | 5,352 | 8.3% | 14,504 | 7.1% | 145.8% | 5,219 | 7.4% | 97.5% | ||||
Domestic subsidiaries *1*2 | 405 | 0.2% | 214 | 0.3% | 583 | 0.3% | 144.0% | 464 | 0.7% | 216.3% | ||||
Overseas subsidiaries *3 | 218 | 0.1% | 58 | 0.1% | 790 | 0.4% | 361.0% | 136 | 0.2% | 231.6% | ||||
Adastria Logistics | 148 | 0.1% | - 16 | - | 77 | 0.0% | 52.1% | 7 | 0.0% | - | ||||
zetton (Food & Beverage Subsidiary) *4 | 485 | 0.3% | 2 | 0.0% | 362 | 0.2% | 74.6% | 156 | 0.2% | 7770.3% | ||||
Ordinary profit | 11,805 | 6.7% | 5,648 | 8.8% | 16,708 | 8.2% | 141.5% | 6,068 | 8.6% | 107.5% | ||||
Net income attributable to owners of the parent | 7,616 | 4.3% | 3,722 | 5.8% | 11,541 | 5.7% | 151.5% | 4,447 | 6.3% | 119.5% | ||||
EBITDA | 17,116 | 9.7% | 7,708 | 12.0% | 22,970 | 11.3% | 134.2% | 8,381 | 11.9% | 108.7% | ||||
Depreciation and amortization | 5,760 | 3.3% | 2,043 | 3.2% | 6,495 | 3.2% | 112.8% | 2,331 | 3.3% | 114.1% | ||||
Amortization of goodwill | 191 | 0.1% | 69 | 0.1% | 168 | 0.1% | 88.1% | 55 | 0.1% | 79.4% |
*1:Domestic subsidiaries are the sum of four domestic subsidiaries: BUZZWIT Co., Ltd., ELEMENT RULE Co., Ltd., Adastria eat Creations Co., Ltd., ADOORLINK Co., Ltd., Gate Win Co., Ltd.
*2:Due to change in financial year, Feb-Oct (FY2023/02 3Q) and Mar-Nov (FY2024/02 3Q)
*3:Overseas subsidiaries are the sum of overseas subsidiaries: Hong Kong, Mainland China, Taiwan, Thailand, USA.(Period Jan. to Sep.2023)
*4:Operating profit of zetton, inc. is shown after consolidation adjustments. Due to change in financial year, Mar-Nov (FY2023/02 3Q) and Feb-Oct (FY2024/02 3Q)
*5:Rent & depreciation costs are the sum of Rent expenses, Lease expenses and Depreciation.
3
Consolidated Income Statement - 3Q Summary (1)
Summary
Net sales
Parent company
Negative impact of late summer heat and mild winter, but 3Q performance was somewhat above the revised plan due to numerous initiatives
70.3 billion yen (+9.2% YoY)
- Up 4.7% YoY because of accurate responses to late summer heat, mild winter and other weather conditions and price revisions due to merchandise with substantial added value.
- Major sources of sales growth were "niko and …" resulting from success of selling furniture and other various categories of products and the "LAKOLE", which is opening many stores.
Domestic subsidiaries | • Up 25.3% YoY because of the fiscal year change; increased about 5% after excluding the effect |
of this change. | |
Overseas subsidiaries | • Up 25.6% YoY; In Mainland China, despite the slow pace of recovery, new stores increased |
sales and reduced losses. Hong Kong rebounded from the 2022 pandemic downturn and new | |
and existing stores generated sales and earnings growth in Taiwan. U.S. sales and earnings | |
decreased due to a slowdown of the wholesale business. | |
Food and beverage business | • Up 29.4% YoY; sales and earnings increased because of the recovery of the business climate in |
Japan and the fiscal year change. |
Gross profit margin 57.5% (+0.1p YoY)
- The negative effect of the yen's weakness was offset by price revisions as the value of merchandise was increased and by limiting discounting.
- An improvement in the gross profit margin of the overseas business was another reason for the small increase.
*BUZZWIT Co., Ltd., ELEMENT RULE Co., Ltd., Adastria eat Creations Co., Ltd., ADOORLINK Co., Ltd., Gate Win Co., Ltd. and zetton, inc. changed their fiscal year end in FY2023/02. *3Q comparisons are Aug-Oct (FY2023/02) and Sep-Nov (FY2024/02) for all of these companies except zetton and Sep-Nov (FY2023/02) and Aug-Oct (FY2024/02) for zetton. *OPEN AND NATURAL Inc. was absorbed by BUZZWIT Co., Ltd. on July 1, 2023.
4
Consolidated Income Statement - 3Q Summary (2)
SG&A expense ratio | 49.0% (+0.3p YoY) | |
Advertising & promotions ・3.6% (+0.0p YoY) (+230 million yen YoY) | ||
Product promotions increased; Part of the advertising that was not run in the first half of the year was done | ||
Personnel | ・17.5% (+0.4p YoY) (+1,300 million yen YoY) | |
Increased employee remuneration, more recruiting activities due to the labor shortage, more hours worked | ||
because of sales growth, increase in bonuses | ||
Rent & depreciation | ・17.4% (-0.1p YoY) (+970 million yen YoY) | |
Decreased as a pct. of sales due to sales growth, although variable rent increased | ||
Others | ・ 10.4% (-0.1p YoY) (+560 million yen YoY) | |
Credit card fees, outsourcing-related expenses, travel expenses and other expenses increased, but total other | ||
expenses were a lower pct. of sales due to sales growth | ||
5.9 billion yen (+7.1% YoY) | ||
Operating profit |
Operating income ratio 8.5%, EBITDA margin 11.9% Change in fiscal year of subsidiaries in Japan +600 million yen
6.0 billion yen (+7.5% YoY) | |
Ordinary profit |
Non-operatingincome ・Foreign exchange gains of 90 million yen
Net income | 4.4 billion yen (+19.5% YoY) |
attributable to | |
owners of the parent |
Extraordinary losses・Impairment of store assets of 70 million yen
*BUZZWIT Co., Ltd., ELEMENT RULE Co., Ltd., Adastria eat Creations Co., Ltd., ADOORLINK Co., Ltd., Gate Win Co., Ltd. and zetton, inc. changed their fiscal year end in FY2023/02. *3Q comparisons are Aug-Oct (FY2023/02) and Sep-Nov (FY2024/02) for all of these companies except zetton and Sep-Nov (FY2023/02) and Aug-Oct (FY2024/02) for zetton. *OPEN AND NATURAL Inc. was absorbed by BUZZWIT Co., Ltd. on July 1, 2023.
5
Adastria and Major Domestic Subsidiaries Income Statement
⚫ 【Adastria (Non-consolidated)】 | Millions of yen | |||||||||
FY2023/02 3Q | FY2024/02 3Q | |||||||||
Nine Months | Three Months | Nine MonthsEnded | Three Months Ended | |||||||
Ended | Ended | YoY | YoY | |||||||
Net sales | 144,913 | 52,575 | 161,683 | 111.6% | 55,072 | 104.7% | ||||
(Same stores YoY) | 112.7% | 109.0% | 109.6% | 104.2% | ||||||
GLOBAL WORK | 33,455 | 11,868 | 38,178 | 114.1% | 12,947 | 109.1% | ||||
niko and... | 21,930 | 7,488 | 24,671 | 112.5% | 8,349 | 111.5% | ||||
studio CLIP | 15,074 | 5,220 | 16,670 | 110.6% | 5,454 | 104.5% | ||||
LOWRYS FARM | 15,927 | 5,910 | 16,667 | 104.6% | 5,526 | 93.5% | ||||
LEPSIM | 9,453 | 3,186 | 10,114 | 107.0% | 3,378 | 106.0% | ||||
JEANASiS | 8,037 | 3,330 | 8,994 | 111.9% | 3,314 | 99.5% | ||||
BAYFLOW | 7,554 | 2,708 | 7,912 | 104.7% | 2,635 | 97.3% | ||||
LAKOLE | 5,682 | 2,141 | 7,886 | 138.8% | 2,622 | 122.5% | ||||
Gross profit | 80,214 | 29,897 | 90,140 | 112.4% | 31,248 | 104.5% | ||||
Gross margin | 55.4% | 56.9% | 55.8% | +0.4p | 56.7% | - 0.1p | ||||
SG&A expenses | 70,266 | 24,544 | 75,636 | 107.6% | 26,028 | 106.0% | ||||
SG&A ratio | 48.5% | 46.7% | 46.8% | - 1.7p | 47.3% | +0.6p | ||||
Operating profit | 9,948 | 5,352 | 14,504 | 145.8% | 5,219 | 97.5% | ||||
Operating margin | 6.9% | 10.2% | 9.0% | +2.1p | 9.5% | - 0.7p | ||||
⚫ 【Major Domestic Subsidiaries】 | ||||||||||
Net sales | BUZZWIT Co., Ltd. | 6,855 | 2,769 | 9,166 | 133.7% | 3,640 | 131.4% | |||
ELEMENT RULE Co., Ltd. | 7,482 | 2,553 | 8,322 | 111.2% | 3,011 | 117.9% |
- Adastria (Non-consolidated) : Amortization of goodwill for FY2023/02 3Q:44 million yen, FY2024/02 3Q:None
- Adastria (Non-consolidated) : Net sales are shown before elimination of internal transactions.
- Sales of BUZZWIT Co., Ltd. include its consolidated subsidiary OPEN AND NATURAL, Inc. (2 companies merged in July 2023)
6
Product Promotion Activities
- Progress with the growth of core products of the brand "GLOBAL WORK"
- A new TV commercial for "MELTY KNIT", a popular fashion line with cumulative series sales of 1.8 million units.
- Continuing to featuring actress/model "Tsubasa Honda" in TV commercials; also producing benefits for branding.
A smooth feeling on the skin | Easy-care fabric (washable) |
A large selection of apparel for men, children, mix-and-match and many other categories
7
Online Business(Domestic)
9.7%
Domestic net sales from online (Nine months) 50.9billion yen(+13.1% YoY)
- Domestic online business ratio: 28.3% (of which Own EC site: approx. 15.0%)
- Own EC site "Dot-ST" has about 17.1 million members (+1.6 million from the end of FY2023/02)
Billions of yen
30 | |||||||||||||||||||
Sales of other EC site | 42.8% | ||||||||||||||||||
25 | Sales of Adastria EC site | ||||||||||||||||||
Total EC sales as pct. of total sales in Japan | |||||||||||||||||||
Ratio of Adastria EC site | |||||||||||||||||||
20 | 30.8% | 32.3% | |||||||||||||||||
30.1% | 29.9% | 29.8% | 30.0% | ||||||||||||||||
28.8% | |||||||||||||||||||
28.5% | 28.7% | ||||||||||||||||||
26.8% | 27.2% | 27.8% | 27.0% | ||||||||||||||||
26.4% | |||||||||||||||||||
15 | 21.3% | 22.0% | 22.7% | ||||||||||||||||
19.8% | |||||||||||||||||||
18.9% | |||||||||||||||||||
17.7% | |||||||||||||||||||
15.8% | 16.7% | 16.1% | |||||||||||||||||
10 | 15.5% | 15.0% | 15.0% | 15.1% | 14.8% | 14.8% | 15.7% | ||||||||||||
13.9% | 13.8% | 14.7% | |||||||||||||||||
10.0% | 10.0% | 10.8% | |||||||||||||||||
8.5% | |||||||||||||||||||
5 | |||||||||||||||||||
0 | |||||||||||||||||||
FY2020/2 | FY2021/2 | FY2022/2 | FY2023/2 | FY2024/2 | |||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q |
*FY2020/02, FY2021/02 non-consolidated sales and sales in BUZZWIT Co., Ltd. and ELEMENT RULE Co., Ltd. were included. *Starting in FY2022/02, sales of ADOORLINK Co., Ltd. was included.
*Starting in FY2023/02 2Q, sales of BUZZWIT Co., Ltd. include its consolidated subsidiary OPEN AND NATURAL, Inc. (2 companies merged in July 2023) and from 4Q, sales of Gate Win Co., Ltd. was included.
8
E-Commerce Activities (1)
- Promotions generate sales growth and attract more young people
- "Dot-STFes" campaign using TV commercials and loyalty points for customers equal to 20% of EC and physical store purchases.
- Attracting many new customers in younger age segments by using promotions featuring popular generation Z celebrities and a variety of influencers.
Promotion Activities | TV commercial |
20% loyalty point distribution |
Benefits between
October 25 and November 6
Registration of new | 140,000 members |
member | |
Amount of EC orders | +5% YoY |
Limited collaboration event on "Dot ST"
More generation Z customers
Benefits between
October 1 and November 30
EC orders
by customers +18% YoY under age 29
9
E-Commerce Activities (2)
- More merchandise of other companies on "Dot-ST"
- On November 22, "Dot-ST" added a "P2 DOG and CAT" store, which specializes in products for pets. This is the eighth new store following the opening of "Dot-ST" to external companies.
- Launch of the "Dot-C" flea market website
- The website sells clothing that was worn by popular staff.
- Sales of this apparel builds strong ties with customers and contributes to progress involving sustainability.
As a lifestyle proposal, our staff post their own pets using the | Staff posted with their styling. |
"P2 DOG and CAT" products. | |
10
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Disclaimer
Adastria Co. Ltd. published this content on 29 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 December 2023 06:07:37 UTC.