Adastria : FY2025/02 Full Term Presentation Material

Published: 2025-04-04 06:08:11 ET 2685.T

FY2025/02 Financial Results

April 4, 2025

1. FY2025/02 Overview

Representative Director and Chairman Michio Fukuda

FY2025/02 Overview

◼ Generated record-high consolidated sales; operating profit declined year on year, falling below plan

◼ Initiated the 5th CHANGE to deliver the diverse forms of value our customers seek

◼ Formulated a medium-term management plan toward 2030

2. FY2025/02 Financial Result and

FY2025/02 Forecast

Managing Director Taiki Fukuda

Consolidated Income Statement

Adastria transferred the e-commerce mall business to and ST Co., Ltd. in December 2024 through a company split.

The following non-consolidated figures for Adastria are presenting both excluding and including the impact of this split, using the same criteria as those for the fiscal year ended February 2024.

(Millions of yen)

FY2024/02 Results

FY2025/02 Results

Ratio

YoY

Net sales

275,596

100.0%

293,110

100.0%

106.4%

Adastria (non-consolidated, excluding and ST)*1

220,078

79.9%

230,983

78.8%

105.0%

Adastria (non-consolidated, including and ST)*2

231,464

79.0%

105.2%

Domestic subsidiaries *3

24,007

8.7%

27,603

9.4%

115.0%

Overseas subsidiaries *4

23,396

8.5%

24,546

8.4%

104.9%

Zetton (Food & Beverage Subsidiary) *5

12,570

4.6%

14,606

5.0%

116.2%

Gross profit

152,354

55.3%

160,282

54.7%

105.2%

SG&A expenses

134,339

48.7%

144,771

49.4%

107.8%

Advertising & promotion

8,712

3.2%

8,514

2.9%

97.7%

Personnel

48,333

17.5%

53,003

18.1%

109.7%

Rent & depreciation *5

47,785

17.3%

52,027

17.8%

108.9%

Amortization of goodwill

223

0.1%

395

0.1%

177.4%

Others

29,284

10.6%

30,830

10.5%

105.3%

Operating profit

18,015

6.5%

15,510

5.3%

86.1%

Adastria (non-consolidated, excluding and ST)*1

16,346

5.9%

13,449

4.6%

82.3%

Adastria (non-consolidated, including and ST)*2

14,335

4.9%

87.7%

Domestic subsidiaries *3

236

0.1%

1,346

0.5%

569.2%

Overseas subsidiaries *4

1,123

0.4%

535

0.2%

47.7%

Adastria Logistics

0.0%

1.2%

Zetton (Food & Beverage Subsidiary) *5

179

0.1%

▲ 411

-0.1%

Ordinary profit

18,389

6.7%

15,964

5.4%

86.8%

Net income attributable to owners of the parent

13,513

4.9%

9,614

3.3%

71.1%

EBITDA

27,763

10.1%

26,692

9.1%

96.1%

Depreciation and amortization

9,525

3.5%

10,785

3.7%

113.2%

Amortization of goodwill

223

0.1%

395

0.1%

177.4%

*1: Figures for December to February in FY2/2025 reflect Adastria's performance after the company split with and ST Co., Ltd.

Ratio

*2: Figures for December to February in FY2/2025 reflect adjustments for intercompany eliminations between Adastria and and ST Co., Ltd., and are presented on the same basis as FY2/2024

*3: Domestic subsidiaries are the sum of five subsidiaries FY02/2024 : BUZZWIT Co.,Ltd., ELEMENT RULE Co., Ltd., ADOORLINK Co., Ltd., Gate Win Co., Ltd.

Domestic subsidiaries are the sum of three subsidiaries FY02/2025 : BUZZWIT Co.,Ltd., ELEMENT RULE Co., Ltd., ADOORLINK Co., Ltd., TODAY'S SPECIAL Co., Ltd., and ST Co., Ltd.

*4: Overseas subsidiaries are the sum of overseas subsidiaries: Hong Kong, Mainland China, Taiwan, Thai, USA.(Period Jan. to Dec.2024)

*5: Operating profit of zetton, inc. is shown after consolidation adjustments. Due to change in financial year, Feb-Jan (FY2024/02) and Feb-Feb(FY2025/02)

*6: Rent & depreciation costs are the sum of Rent expenses, Lease expenses and Depreciation

Net sales hit a record high and met forecasts, but the gross profit margin fell short of target.

Summary

Operating profit declined due to weak autumn and winter sales, as well as underperformance in the overseas

and food and beverage businesses.

Net sales

293.1 billion yen (+6.4% YoY)

Parent company

(including and ST Co., Ltd)

Domestic subsidiaries

• Up 5.2% year on year. Solid consumer spending, favorable weather, and successful sales and product strategies drove performance in the first half.

Sales underperformed in the second half due to hotter-than-normal temperatures in October and inventory shortages during the winter sales season.

• Up 15.0% year on year. ELEMENT RULE posted higher revenue and profit driven by recovery of underperforming brands. BUZZWIT, an e-commerce-focused subsidiary, saw weak performance in the first half but recovered in the second.

Overseas subsidiaries Food and beverage business

• Up 4.9% year on year. Losses narrowed in mainland China despite lower revenue resulting from weak consumer spending. In Taiwan, new store openings and brand launches drove increases in both revenue and profit.

New store openings in Hong Kong drove revenue up, but higher depreciation and amortization reduced profit

Business in the U.S. continued to face challenges in wholesale operations, leading to declines in both revenue and profit. Revenue increased in Thailand and the Philippines due to new store openings.

• Net sales increased 16.2% and reflect a 13-month period due to a change in our fiscal-year end. The effective increase on a 12-month basis amounted to 11.8%. Profit declined due to new store opening costs and higher personnel expenses, despite increased revenue supported by domestic market recovery.

Gross profit margin

54.7% (-0.6 pp YoY)

• Gross profit margin declined year on year due to weaker margins from the depreciating yen and inventory valuation losses, despite unit price adjustments

• Increased wholesale mix weighed on margin (-0.3 pp)

SG&A expense ratio

49.4% (+0.7 pp YoY) Advertising and promotions Personnel Rent and depreciation Other

Operating profit

・2.9% (-0.3 pp YoY) (-0.19 billion yen YoY)

Optimized promotional spending

・18.1% (+0.6 pp YoY) (+4.67 billion yen YoY)

Ongoing improvements in employee compensation, increased hiring, and higher labor costs in the food and beverage business

・17.8% (+0.5 pp YoY) (+4.24 billion yen YoY)

Higher rent stemming from sales growth; higher depreciation from new store openings

・10.5% (-0.1 pp YoY) (+1.54 billion yen YoY)

Higher card processing fees and system related expenses

15.5 billion yen (-13.9% YoY) Operating profit margin: 5.3% EBITDA margin: 9.1%

Ordinary profit

Non-operating profit:

15.9 billion yen (-13.2% YoY)

¥0.26 billion in foreign exchange gains

Net income attributable to owners of the parent

Extraordinary losses:

9.6 billion yen (-28.9% YoY)

0.43 billion yen in store impairments, 0.42 billion yen in goodwill impairments, and 0.39 billion yen in U.S. trademark impairments

FY2025/02 Issues and Measures

◼ Profit declined due to weaker second-half sales

Summary

• Consolidated net sales exceeded both the previous year results and the earnings forecast, while profit declined at all levels

• Adastria (non-consolidated) underperformed in the second half due to slow adaptation to unseasonal weather and inventory shortages

• Group companies in the overseas and food and beverage businesses posted weak full-year results

• Operating profit declined due to lower gross margin stemming from the weaker yen and rising rent and depreciation costs

◼ Response measures

• Strengthened product lineups less affected by weather through IP collaborations and expansion into non-apparel categories

• Revised monthly budget allocations, improved seasonal inventory and ordering accuracy

• Certain underperforming subsidiaries recovered while food and beverage subsidiaries improved cost structure by limiting new store openings

• Withdraw from the U.S. market; liquidate and sell U.S. subsidiary

Summary of FY2025/02

⚫ Adastria(Non-consolidated) Monthly sales All Stores YoY

125.0%

売上高

Net Sales

実店舗

Physical Stores

E-Ccommerce web C

115.0%

105.0%

95.0%

85.0%

M3a月rch

4Ap月ril

5M月ay

Net sales: 104.3%

Physical stores: 102.7%

EC: 109.4%

• Strong sales of spring and summer items were driven by favorable weather in April and May and increased foot traffic, despite cooler temperatures in March

• Items targeting demand for outings and travel performed well

• Average spend per customer increased due to targeted product strategies and pricing adjustments

6Ju月ne

7Ju月ly

A8u月gust

N1ov1em月ber

Net sales: 106.8%

Physical stores: 106.5%

EC: 107.6%

• Sales of summer items remained strong due to hot weather and sustained heat waves, combined with increased summer vacation outings

• Continued improving average spend per customer by adjusting e-commerce sale periods, revising pricing, and limiting excessive discounting

• Profit generated from changes in loyalty point utilization rates

Net sales: 105.9%

Physical stores: 105.3%

EC: 107.4%

• Fall items saw a slow start due to hotter-than-normal temperatures in October

• Renamed company e-commerce site from Dot ST to and ST

• Incurred losses from changes in loyalty point utilization rates

D1ec2e月mber Ja1nu月ary

Fe2br月uary

Net sales: 100.2%

Physical stores: 100.8%

EC: 98.5%

• Winter item sales progressed in early December as temperatures dropped

• Inventory shortages of winter items limited sales during the year-end and New Year sales period

• Spring items saw a slow start due to cooler temperatures in February

Adastria (Non-consolidated) Income Statement

*AD: Adastria Co., Ltd. / AST: and ST Co., Ltd.

Impact on Adastria Non-Consolidated Income Statements Following the December 2024 Company Split With and ST Co., Ltd.

• Sales and gross profit: Transferred revenue from open platform operations and group e-commerce platform usage fees from AD to AST.

AD reflects only the net impact (issuance minus redemption) of its in-house membership points.

• SG&A expenses : AD pays fees (e-commerce usage fees) to AST for AD's and ST brand sales. AST covers related e-commerce costs, including parcel shipping and credit card fees.

• Non-operating profit : AST pays software licensing fees to AD.

（Millions of yen）

Disclaimer

Adastria Co. Ltd. published this content on April 04, 2025, and is solely responsible for the information contained herein. Distributed via , unedited and unaltered, on April 04, 2025 at 10:07 UTC.