ZOZO : Consolidated Financial Results For the first quarter for the fiscal year ending March 31, 2022

Consolidated Financial Results

For the first quarter for the fiscal year ending March 31, 2022 [JGAAP]

Company Name:	ZOZO, Inc.				Listed stock exchange:
Code:	3092				URL
Representative:	Representative Director, President & CEO	Kotaro Sawada
Contact Person:	Director, Executive Vice President & CFO	KojiYanagisawa
Scheduled date to file the	August 13, 2021	Scheduled date of
financial report:		dividend payment:
Supplementary material for quarterly	:	Yes
financial results
Quarterly results briefing		:	Yes ( For analysts and institutional investors

July 29, 2021 Tokyo

https://corp.zozo.com

(TEL) 043(213)5171

-

)

(Rounded down to million yen)

1. Consolidated business results for the first quarter of the fiscal year ending March 31, 2022 (April 1 to June 30, 2021)

(1) Consolidated business results (cumulative)						(Percentages indicateYoY changes)
		Net sales	Operating profit	Ordinary profit	Profit attributable to
		owners of parent
		Million yen	%	Million yen		%	Million yen	%	Million yen	%
First quarter of fiscal year	38,866	15.4	12,591		20.8	12,534	19.7	8,731	19.3
ending March 31, 2022
First quarter for theYear	33,674	19.4	10,423		33.9	10,473	37.5	7,321	37.5
Ended March 31, 2021
(NOTE)	Comprehensive income	First quarter of fiscal year ending March 31, 2022	8,790 Million yen	(19.7%)
			First quarter of fiscal year ended March 31, 2021	7,340 Million yen	(38.3%)
		Net profit per share		Fully diluted
			net profit per share
			Yen				Yen
First quarter of fiscal year		28.91				-
ending March 31, 2022
First quarter of fiscal year		23.98				-
ended March 31, 2021

(NOTE) Fully diluted net profit per share is not presented because there are no potential shares with dilutive effects.

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

Million yen

Million yen

%

First quarter of fiscal year

85,726

24,392

28.3

ending March 31, 2022

Fiscal year ended March

125,656

55,507

44.1

31, 2021

(Reference) Shareholders' equity First quarter of fiscal year ending March 31, 2022

24,287 Million yen

Fiscal year ended March 31, 2021

55,433 Million yen

2.Dividend

Annual dividends

End of Q1

End of Q2

End of Q3

Year-end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended

-

15.00

-

26.00

41.00

March 31, 2021

Fiscal year ending

-

March 31, 2022

Fiscal year ending March

22.00

-

33.00

55.00

31, 2022 (Forecast)

3. Forecasts for the fiscal year ending March 31, 3.2022 (April 1, 2021, to March 31, 2022)

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										(Percentages indicateYoY changes)
									Profit attributable	Net profit per
		Net sales	Operating profit	Ordinary profit	to owners of
		share
									parent
Fiscal year ending	Million yen	%	Million yen	%	Million yen		%	Million yen	%	Yen
162,600	10.3	47,800	8.3	47,800		7.7	33,300	7.7	109.05
	March 31, 2022
(NOTE)	Revisions to the most recently announced consolidated forecasts:	None

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: None

: None

: None

: Yes

※ Notes
(1) Changes of important subsidiaries during the period	: None

(Changes in specified subsidiaries resulting in changes in the scope of consolidation)

New -	Exclusion		-
(2) Application of particular accounts procedures to the preparation of	:	None
quarterly consolidated financial statements

(3) Changes in accounting policies and changes or restatement of accounting estimates ① Changes in accounting policies caused by revision of accounting

standards

② Changes in accounting policies other than ①

③ Changes in accounting estimates

④ Restatement of revisions

(NOTE) For further information, please refer to "Changes in Accounting Policies" in (3) Notes on quarterly consolidated financial statements on page 16 of this material.

1. Number of shares outstanding (Ordinary stock)

• Year-endshares outstanding (includingTreasury shares)

②Number of year-end treasury stocks

③Average number of shares during the period

Q1 of fiscal year			Fiscal year
ending March	311,644,285	Shares	ended March	311,644,285	Shares
2022			2021
Q1 of fiscal year			Fiscal year
ending March	14,823,939	Shares	ended March	6,279,914	Shares
2022			2021
Q1 of fiscal year			Q1 of fiscal year
ending March	302,021,058	Shares	ended March	305,295,182	Shares
2022			2021

• Quarterly financial results are not subject to quarterly review by certified public accountants or auditing firms.
• Explanation regarding the appropriate use of financial forecasts and others special notes
• • The financial forecasts and other statements related to the future contained in this material are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Actual results may differ materially from these forecasts due to various factors. Please refer to "1. Qualitative information on results for the first quarter ended June 30, 2021, (3) Explanation of consolidated business forecasts and other forward-looking information on page 11 for the assumptions underlying the forecasts and cautionary statements regarding the use of the forecasts.
  • We are scheduling to hold a financial result briefing for institutional investors and analysts on July 29, 2021. We plan to post the content of the briefing and the materials used on the day on its website promptly after the briefing.

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Table of contents of appendix
1.Qualitative information on results for the first quarter ended June 30, 2021 .....................................................................	5
(1) Overview of business results........................................................................................................................................	5
(2)	Explanation of financial position..................................................................................................................................	11
(3)	Explanation of consolidated business forecasts and other forward-looking information.............................................	11
2. Consolidated financial statements...................................................................................................................................	12
(1) Quarterly consolidated balance sheets .......................................................................................................................	12
(2) Quarterly consolidated statements of income and consolidated statements of comprehensive income ...................	14
(3)	Notes to quarterly consolidated financial statements .................................................................................................	16
(Notes on going concern assumptions) ........................................................................................................................	16
(Notes on significant changes in shareholders' equity) ................................................................................................	16
(Changes in accounting policies) ..................................................................................................................................	16

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1. Qualitative information on results for the first quarter ended June 30, 2021

(1) Overview of business results

Business results for the current fiscal year

[Table 1]YoY comparison					(Unit: Million yen)
		Consolidated cumulative first quarter	Consolidated cumulative first quarter
		of previous fiscal year	of current fiscal year	YoY basis
		(April 1 to June 30, 2020)	(April 1 to June 30, 2021)
	Gross merchandise value	95,330	(100.0%)	116,812	(109.5%)	22.5%
	Gross merchandise value (excluding other GMV)	95,330	(100.0%)	106,700	(100.0%)	11.9%
	Net sales	33,674	(35.3%)	38,866	(36.4%)	15.4%
	Gross profit	32,283	(33.9%)	36,924	(34.6%)	14.4%
	Operating profit	10,423	(10.9%)	12,591	(11.8%)	20.8%
	Ordinary profit	10,473	(11.0%)	12,534	(11.7%)	19.7%
	Profit attributable to owners of parent	7,321	(7.7%)	8,731	(8.2%)	19.3%

Figures in parentheses are percentages to gross merchandise value (excluding other GMV)

Under the corporate philosophy of "Inspire the world. Deliver joy every day.", we mainly operate the following businesses: Japan's largest fashion eCommerce website ZOZOTOWN and a fashion media WEAR.

In the consolidated cumulative first quarter of the current fiscal year, it was challenging for the apparel industry, as operation of physical stores of some brands was restricted under the continuous expansion of COVID-19. Under this circumstance, our group has been focusing even stronger on creating ZOZOTOWN more attractive to both users and brands, with the aim of increasing the number of unique users and improving the conversion rate (the purchasing rate of unique users). To maximize sales at ZOZOTOWN, we have implemented measures such as sales events ZOZOWEEK in May 2021 (10 days from May 14 to 23, 2021) and broadcastedTV commercial to attract customers in the period of summer sales. In addition, we proactively welcomed new brands in a wide range of genres to meet diversifying needs of users.

We are also actively strengthening the D2C business and product categories, which we have been developing since the previous consolidated fiscal year. On October 22, 2020, "YOUR BRAND PROJECT Powered by ZOZO", the D2C business that we create fashion brands together with individuals who have brilliant talents and senses, started to sell items under the brands that we launched with the influencers. New popular influencers have also participated for the new product rollout for spring/summer in 2021. As explained in the consolidated financial results for the fiscal year ended March 31, 2021, we have changed our business segments from the current fiscal year. Due to this change, the merchandise value in the D2C business is mostly recorded in outright purchase/production and sales. As the categories enhancement, we are expanding merchandise value of the shoe category in ZOZOTOWN by using the "ZOZOMAT".Of the shoes available in ZOZOTOWN at present, the number of shoes covered by the ZOZOMAT exceeds 3,000 styles, and sales in the shoe category are growing steadily. In addition, on March 18, 2021, we renewed ZOZOTOWN; launched ZOZOCOSME to strengthen the cosmetics category, and ZOZOVILLA, which offers a lineup of domestics and overseas luxury brands. ZOZOCOSME handles more than 500 cosmetics brands both from domestic and overseas at the time of the launch, with a female active member ratio of over 70%, and it aims to expand merchandise value of the cosmetics category in ZOZOTOWN. Furthermore, we have implemented a purchase assist function that recommend the color of the foundation that is closest to the measured skin color using "ZOZOGLASS", a device that can measure skin color with high precision. This enables users to have new purchasing experiences. ZOZOVILLA is a luxury and designer brands zone in ZOZOTOWN, with more than 90 luxury brands domestically and overseas. As we have grown together with fashion ever since our foundation, we have again started the zone with strong mind to provide opportunities for "fashion-lovers".We are expecting improvement of ZOZOTOWN branding through the operation of ZOZOVILLA.

Sales of ZOZOTOWN PayPay Mall Shop have been growing steadily due to the good customer retention of new customers acquired through the large-scale "Super PayPay Festival" and other measures implemented in the second half of the previous consolidated fiscal year, as well as the continuous and active deploy of promotional expenses by Yahoo Japan Corporation which operates PayPay Mall.

Regarding the B2B business, brands are actively continuing to enhance their own eCommerce sites, due to the impact of COVID-19.

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