J Front Retailing : 2Q FY2/2024 Results Presentation

～	Connect to Renewed Growth ～

Presentation of Results for First Six Months of

Fiscal Year Ending February 29, 2024

October 10, 2023

YOSHIMOTO Tatsuya

President and Representative Executive Officer

J. Front Retailing Co., Ltd.

Create and Bring to Life "New Happiness."

Today's Agenda

I. Overview of H1 FY2023 Results

II. H2/Full FY2023 Forecast

III. Toward Renewed Growth in the Medium to Long Term

1

Overview of H1 FY2023 Results (IFRS)

2

Consolidated PL (IFRS)

Gross sales up, mainly in mainstay Department Store, and business profit up despite unexpected cost increases

Despite impairment losses on Shimonoseki Daimaru, operating profit also rose due to gain on sale of fixed assets and other factors

Interim dividend of ¥16 yen per share as planned at the beginning of the year, an increase of ¥1 compared to the same period last year

(Millions of yen, unless otherwise stated)

First six months of	Q1		Q2			H1
fiscal year ending	Results	YoY %	Results		YoY %	Results	YoY %	vs. April
February 29, 2024		forecast
Gross sales	263,818		16.1)	276,313		16.6)	540,132	16.4)	6,632)
Revenue	93,456		14.1)	98,177		12.6)	191,634	13.3)	(3,866)
Gross profit	45,831		13.0)	47,550		12.4)	93,382	12.7)	382)
SGA	36,000		7.5)	37,185		4.1)	73,185	5.7)	(815)
Business profit	9,831		39.6)	10,365		57.4)	20,197	48.2)	1,197)
Other operating income	1,061		(15.8)	755		(28.7)	1,817	(21.7)	817)
	723		(2.9)	1,606		(18.3)	2,329	(14.1)	829)
Other operating expenses
Operating profit	10,169		34.5)	9,514		67.6)	19,684	48.7)	1,184)
Profit attributable to	6,397		7.1)	6,503		55.5)	12,900	27.0)	400)
owners of parent
Dividend per share (Yen)	－		－	－		－	16	(Yen) 1)	0)

3

Segment Performance (1) Department Store (IFRS)

Spending, mainly on luxury items, by affluent consumers remained strong and inbound sales further accelerated from Q2

Business profit up despite unexpected increase in SGA, but operating profit down due to impairment losses

Revenue
120,000	112,386	14,000
101,610		12,000
100,000
80,000		10,000
	8,000
60,000
	6,000
40,000
	4,000
20,000		2,000
0		0
H1 FY2022	H1 FY2023
Results	Results

Business profit

	12,000
	11,677
	10,000
	8,000
5,731	6,000
	4,000
	2,000
	0
H1 FY2022	H1 FY2023
Results	Results

Operating profit

	10,106
3,813
H1 FY2022	H1 FY2023
Results	Results

(Millions of yen, unless otherwise stated)

First six months of	Q1		Q2			H1
fiscal year ending	Results	YoY %	Results	YoY %	Results	YoY %	vs. Apr
February 29, 2024	forecast
Gross sales	169,692	14.6	179,594	14.3	349,287	14.4	2,187)
Revenue	54,161	11.0	58,225	10.3	112,386	10.6	(3,814)
SGA	30,346	6.0	30,789	3.3	61,135	4.7	(465)
Business profit	4,859	83.4	6,817	121.3	11,677	103.8	477)
Operating profit	4,504	99.0	5,602	261.3	10,106	165.0	(94)

4

Daimaru Matsuzakaya Department Stores Major Store Sales

Comparable store sales in H1 were down 1.1% compared to FY2019, up 1.8% in Q2 alone

Sales growth of core stores excluding terminal stores all turned positive compared to FY2019 in Q2 alone

							(% change)
First six months of		YoY			vs. FY2019		vs. FY2018
fiscal year ending	Q1	Q2	H1	Q1	Q2	H1	H1
February 29, 2024
Results	Results	Results	Results	Results	Results	Results
Shinsaibashi	34.4	35.3	34.9	(12.1)	8.5)	(1.9)	5.5)
Umeda	20.5	21.9	21.2	(18.0)	(14.9)	(16.4)	(16.5)
Tokyo	35.7	28.9	32.3	(4.9)	(6.2)	(5.5)	(4.1)
Kyoto	15.6	15.1	15.3	(3.1)	0.7)	(1.2)	(1.1)
Kobe	8.9	9.6	9.3	14.5)	22.6)	18.5)	14.8)
Sapporo	16.4	16.9	16.7	3.6)	6.8)	5.2)	5.6)
Nagoya	10.7	8.7	9.6	3.6)	7.5)	5.6)	4.7)
Total
16.8	16.4	16.6	(4.0)	1.8)	(1.1)	(0.9)
directly managed stores

*Total is on a comparable store basis. (Comparisons to FY2019 and FY2018 exclude Yamashina, Shimonoseki, and Toyota stores.)

5

Daimaru Matsuzakaya Department Stores Inbound Sales Trends

Inbound sales accelerated further in Q2, exceeding the pre-COVID-19 level from July

Driven by tourists from East Asia, including Hong Kong, Taiwan, and South Korea; the number of tourists from mainland China is also gradually increasing

(Millions of yen)

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

Duty-free sales trends (directly managed stores)

FY2023 FY2019 FY2018

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Expect significant growth potential in the future

as direct flights to and from mainland China will be restored

6

Daimaru Matsuzakaya Department Stores SGA Analysis (IFRS)

H1 FY2023

SGA analysis

(Millions of yen)

・Increase in utilities expenses (¥200 mn)
・Increase in commissions due to sales growth (¥700 mn)
・Increase in taxes and dues (¥600 mn)	Increase in
・Increase in outsourcing and temporary staffing (¥300 mn)
and others	other SGA
	2,563

	Increase in
	ad expenses	Decrease in
Increase in
		depreciation
personnel	400	(115)
(466)
expenses
410		Decrease in
		packing and		(145)
		transportation		55,318
		costs		Decrease in

	operational
	costs
	・Web ads, inbound sales promotion, etc.
52,669	・Increase in livelihood support allowance (¥300 mn)

		Decrease in		Increase in	Increase in
		depreciation
Decrease in			ad expenses	personnel
	(85)
other SGA	(278)	46	200	expenses
(527)			Increase in		158
	Decrease in		packing and
		transportation
	operational
		costs
	costs
・Decrease in supplies expenses
(down ¥800 mn)		・Strengthening of inbound
・Decrease in repair expenses	and other sales promotion
(down ¥200 mn)

・Increase in taxes and dues (¥500 mn)

55,800

Up ¥2,649 million YoY		Down ¥482 million from April forecast
H1 LY	H1 FY2023	April
Results	Results	Forecast

7

Segment Performance (2) SC Business (IFRS)

Transaction volume increased due to the effect of core store renovations, growth of inbound sales, and other factors, but commission income did not reach the target

Business profit rose due to successful cost reductions, and operating profit rose sharply due to gain on sale of fixed assets

Revenue

Business profit

Operating profit

30,000		26,368		28,002		5,000
25,000												4,800
20,000												4,600
											4,400
15,000
											4,200
10,000
											4,000
5,000												3,800
0												3,600
	H1 FY2022				H1 FY2023
		Results				Results

	4,860	6,000
		5,800
		5,600
		5,400
4,145		5,200
		5,000
		4,800
		4,600
H1 FY2022	H1 FY2023
Results	Results

	5,772
5,011
H1 FY2022	H1 FY2023
Results	Results

						(Millions of yen, unless otherwise stated)
First six months of	Q1		Q2			H1
fiscal year ending	Results	YoY %	Results	YoY %	Results	YoY %	vs. Apr
February 29, 2024	forecast
Gross sales	69,467	15.4	71,447		19.1	140,915	17.3	1,377)
Revenue	14,137	8.3	13,864		4.1	28,002	6.2	(1,594)
SGA	2,252	21.9	2,191		5.3	4,443	13.1	(745)
Business profit	2,484	8.9	2,376		27.5	4,860	17.2	155)
Operating profit	3,148	6.6	2,624		27.5	5,772	15.2	1,105)	8

Segment Performance (3) Developer Business (IFRS)

Sales rose sharply, driven by J. Front Design & Construction, which recorded sales of large properties and did well in interior works of department stores

Significant increase in both business profit and operating profit mainly due to the effect of cost control

Revenue

Business profit

Operating profit

40,000							33,766			2,500
35,000
												2,000
30,000			26,107
25,000													1,500
20,000													1,000
15,000
10,000													500
5,000
0													0
		H1 FY2022			H1 FY2023
			Results			Results

	2,500
	1,988
	2,000
1,412	1,500
	1,000
	500
	0
H1 FY2022	H1 FY2023
Results	Results

	2,228
1,636
H1 FY2022	H1 FY2023
Results	Results

						(Millions of yen, unless otherwise stated)
First six months of	Q1		Q2			H1
fiscal year ending	Results	YoY %	Results	YoY %	Results	YoY %	vs. April
February 29, 2024	forecast
Gross sales	16,753	27.0	17,012		38.1)	33,766	32.4	3,566)
Revenue	16,753	24.3	17,012		34.7)	33,766	29.3	3,566)
SGA	1,797	17.3	1,645		3.9)	3,443	10.5	(757)
Business profit	1,384	82.3	603		(7.6)	1,988	40.8	688)
Operating profit	1,615	67.8	612		(9.1)	2,228	36.1	518)	9