[Delayed]Results Briefing: Q1ST (March to May 2022)Results of 2023 Ending Feb.

R e s u l t s B r i e f i n g : Q 1 S T ( M a r c h t o M a y 2 0 2 2 ) R e s u l t s o f 2 0 2 3 E n d i n g F e b .

14th July 2022

AGENDA

1. Results Overview
2. About Business Situation by Channel
3. Brands Overview
4. Net income and the balance sheet
5. Initiatives in each area of TIP25
6. Initiatives related to the SDGs
7. Reference Data

1 R e s u l t s O v e r v i e w

4 Q1ST of Results of 2023 Ending Feb. : Executive summary

COVID-19 movement restrictions were lifted, making people active during the Golden Week for the first time in two years

Real stores recovered sales steadily. Customers returned to ladies brands in department stores and FB, which had both continued to struggle. They entered a phase of growth again led by ladies brands for which TSI was stepping up its efforts for OMO.

In light of the possibility of its growth rate slowing down, the golf business started with a conservative budget but maintained a rate of growth that far exceeded its forecasts.

There were issues to be addressed in achieving sales growth for the EC business

On the other hand, the EC business was faced with inventory problems due to lockdowns, and in addition, the challenge was growth potential as major key brands remained sluggish.

In the second quarter, TSI will restructure the stagnant brands' system and inventory/supply structure and step up its efforts to increase membership mainly through its EC operations, thus striving to earn greater sales.

Supply chain disruption occurred in some areas of the United States and Lockdowns in Shanghai from March to May affected TSI's financial results

HUF and TACTICS were strong, but the former was delayed delivery date its wholesaling operations while the latter suffered no delivery of spring products.

In terms of logistics in the Shanghai area, the two huge brands, NATURAL BEAUTY BASIC and NANO universe, were troubled by delay in the delivery of popular items.

The head office is scheduled to move in the fall, and costs will increase compared to the previous year.

We are planning to relocate the head office, which is a major event in the company, in September, and this term will cost a lot of temporary expenses. Among them, we will increase profitability and commit to securing profits.

The new TIP25 reform promotion division was established, accelerating reform

A new division to advance reform was set up. As the first step to invigorate new business domains, TSI entered into an alliance with Sitateru Inc.

TSI aims at medium-term human resource development by stepping up its efforts to train personnel in its organization

A laboratory preparation office was established. It launched a program for developing digital and marketing specialists.

5 Highlights of Results for Q1ST of Results of 2023 Ending Feb.

We achieved the operating income goal for the quarter without fail.

It will focus on implementing measures for powerful sales reforms in the future.

Net sales were 111.4% (105.8% based on the old standards) of the previous term's level. Operating income was 113.4％ of its budget, exceeding the budget by 190 million yen and achieving the budgetary goal.

The company attained the profit budget thanks to the expansion of strong business domains and the improvement of earning capabilities. The challenge was delay in sales recovery in the select business domain for youths, and this hindered company-wide sales growth, preventing the company from achieving the sales goals.

			Results for the first		Comparison with		YoY change
			quarter		budgets
			New profit standards		New profit		New profit		Old profit
				standards		standards		standards
Net Sales			38.12Billion Yen	94.6%		111.4%	105.8%
			1.60Billion Yen	113.4%		*) 70.5%	72.2%
Operating Profit
Quarterly Net			2.06Billion Yen	121.4%		84.9%	84.9%
Income

• The factors for decreasing operating income for the current term compared to the operating income of 2.27 billion yen for the first quarter of the previous term were 300 million yen (1Q) for accelerated depreciation expenses for the relocation of the head office; 150 million yen for the normalization of funds for performance-linked bonuses; 50 million yen for expenses for the withdrawal of overseas subsidiaries; 100 million yen for the deterioration of purchasing due to exchange rates; and 200 million yen for a reaction to special COVID-19 demand in the golf business. Taking these factors into account, We planned 1.41 billion yen as a budgetary goal for operating income during the first quarter.