ZOZO : Consolidated Financial Results For the first quarter of fiscal year ending March 31, 2023〔JGAAP〕

Consolidated Financial Results

For the first quarter of fiscal year ending March 31, 2023 〔JGAAP〕

									July 29, 2022
Company name	ZOZO, Inc.				Listed stock exchanges	Tokyo
Code	3092				URL	https://corp.zozo.com/en
Representative	Representative Director, President & CEO	Kotaro Sawada
Contact person	Director, Executive Vice President & CFO	KojiYanagisawa	(TEL)	043(213)5171
Scheduled date to file the	August 15, 2022	Scheduled date of dividend			-
financial report		payment
Supplementary material for quarterly	:	Yes
financial results
Quarterly results briefing		:	Yes (	For analysts and institutional investors	)

(Rounded down to million yen)

1. Consolidated business results for the first quarter of fiscal year ending March 31, 2023 (April 1, 2022 to June 30,

2022)

1. Consolidated business results (cumulative)

(Percentages indicateYoY changes.)

	Net sales	Operating profit	Ordinary profit	Profit attributable to
	owners of parents
First quarter of fiscal year	Million yen	%	Million yen		%	Million yen	%	Million yen	%
42,590	9.6	14,312		13.7	14,296	14.1	9,960	14.1
ending March 31, 2023
First quarter of fiscal year	38,866	15.4	12,591		20.8	12,534	19.7	8,731	19.3
ended March 31,2022
(NOTE) Comprehensive income		First Quarter of FiscalYear Ending March 2023	10,048Million yen	(14.3%)
		First Quarter of FiscalYear Ended March 2022	8,790Million yen	(19.7%)
			Net profit per share
	Net profit per share	after adjusting dilutive
			shares
First quarter of fiscal year		Yen			Yen
	33.23			-
ending March 2023
First quarter of fiscal year		28.91			-
ended March 2022

(NOTE) Net profit per share after adjusting dilutive shares is not presented because there are no potential shares with dilutive effects.

1. Consolidated financial position

	Total assets		Net assets		Equity Ratio
First quarter of fiscal year	Million yen		Million yen				%
119,810		54,391					45.3
ending March 31, 2023
Fiscal year ended March	127,276		55,099					43.2
31, 2022
(Reference) Shareholders' equity First quarter of fiscal year ending March 31, 2023	54,240Million yen
	Fiscal year ended March 31, 2022				54,932Million yen
2. Dividends
				Annual dividends
	End of Q1		End of Q2	End of Q3		Year-end		Total
Fiscal year ended	Yen			Yen	Yen		Yen			Yen
-		22.00	-			36.00		58.00
March 31, 2022
Fiscal year ending	-
March 31, 2023
Fiscal year ending March			24.00	-			36.00		60.00
31, 2023 (Forecast)

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3. Consolidated business forecasts for the fiscal year ending March 31, 2023 (April 1, 2022 to March 31, 2023)

									(Percentages indicate year-on-year changes)
									Profit attributable	Net profit
	Net sales		Operating profit	Ordinary profit	to owners of
		per share
									parent
Fiscal year ending March	Million yen		%	Million yen		%	Million yen	%	Million yen		%	Yen
181,300		9.1	51,500		3.7	51,500	3.7	35,900		4.1	119.74
31, 2023
(NOTE) Revisions to the consolidated forecasts most recently announced	None

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

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

NewExclusion

(2) Application of particular accounting 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	: None
standards

1. • Changes in accounting policies other than ①
     ③ Changes in accounting estimates
     ④ Restatement of revisions
2. Number of shares outstanding (Common stock)

① Year-end shares outstanding (including treasury stocks)

• Number of year-end treasury stocks

• Average number of shares during the period (cumulative)

	:	None
	:	None
	:	None
Q1 of fiscal year			Fiscal year
ending March	311,644,285Shares	Ended March	311,644,285Shares
2023			2022
Q1 of fiscal year			Fiscal year
ending March	11,847,304Shares	Ended March	11,840,467Shares
2023			2022
Q1 of fiscal year			Q1 of fiscal
ending March	299,801,526Shares	year ended	302,021,058Shares
2023			March 2022

• This financial results report is not subject to an audit by a certified public accountant or an auditing firm.
• Explanations and other special notes concerning the appropriate use of business forecasts
• • The business 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, 2022, (3) Explanation of consolidated business forecast and other forward-looking statements" on page 11 for the assumptions underlying the forecasts and cautionary statements regarding the use of the forecasts.
  • We are scheduling a financial results briefing for institutional investors and analysts on July 29, 2022. We plan to post the content of the briefing and the materials used on the day on the Company's website promptly after the briefing.

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Table of contents of the appendix
1. Qualitative information on results for the first quarter ended June 30, 2022............................................................................	5
(1) Overview of business results...................................................................................................................................................	5
(2) Overview of financial position ................................................................................................................................................	11
(3) Explanation of consolidated business forecast and other forward-looking statements.................................................	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 the going concern assumption).............................................................................................................................	16
(Notes on significant changes in shareholders' equity)........................................................................................................	16

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1. Qualitative information on results for the first quarter ended June 30, 2022

(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, 2021)	(April 1 to June 30, 2022)
Gross merchandise value	116,812	(109.5%)	127,928	(110.3%)	9.5%
Gross merchandise value (excluding other GMV)	106,700	(100.0%)	115,948	(100.0%)	8.7%
Net sales	38,866	(36.4%)	42,590	(36.7%)	9.6%
Gross profit	36,924	(34.6%)	40,341	(34.8%)	9.3%
Operating profit	12,591	(11.8%)	14,312	(12.3%)	13.7%
Ordinary profit	12,534	(11.7%)	14,296	(12.3%)	14.1%
Profit attributable to owners of parent	8,731	(8.2%)	9,960	(8.6%)	14.1%

Figures in parentheses are percentages to the 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.

During the consolidated cumulative first quarter of the current fiscal year, the apparel industry (especially at physical stores) thrived due to increased opportunities to go out, and increased demand for clothing as the spread of COVID-19 subsided. 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 the sale event "ZOZOWEEK" (10 days in total from May 14 to 23, 2022) and broadcastedTV commercials to attract customers during the summer sale. In addition, we continued to proactively welcome new brands in a wide range of genres to meet diversifying needs of users. As an initiative to strengthen a specific category, we have been concentrating on ZOZOCOSME. ZOZOCOSME handles more than 600 cosmetics brands, both domestic and overseas brands, as of the end of June 2022. We will proactively continue to open new brand shops to expand the merchandise value of the cosmetics category in ZOZOTOWN. Furthermore, we implemented a purchase assist function that recommends the best foundation and concealer color 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.

Sales of ZOZOTOWN PayPay Mall Shop have been growing steadily due to the good retention rate of new customers acquired by the previous fiscal year through the continued active sales promotion spending by Yahoo Japan Corporation which operates PayPay Mall.

Regarding the BtoB business, brands are actively continuing to enhance their own eCommerce websites, although there was a withdrawal of a brand that accounted for a large portion of the merchandise value during the fourth quarter consolidated accounting period of the previous fiscal year.

Consequently, the gross merchandise value in the consolidated cumulative first quarter of the current fiscal year was 127,928 million yen (+9.5%YoY), and the gross merchandise value (excluding other GMV) was 115,948 million yen (+8.7% YoY). Net sales were 42,590 million yen (+9.6%YoY), and gross profit was 40,341 million yen (+9.3%YoY).The ratio of gross profit to the gross merchandise value (excluding other GMV) (gross profit margin) was 34.8%, an increase of 0.2% from the same quarter of the previous fiscal year.

As for net sales, theYoY growth rate exceeded that of the gross merchandise value (excluding other GMV), mainly due to growth in Outright purchase/production & sales, USED sales, and the advertising business, which have high sales ratio to the gross merchandise value, and a decrease in the composition ratio of the BtoB business, which has a low sales ratio to the gross merchandise value.

The main factor behind the increase in gross profit margin was, as mentioned in the sales part, due to growth in Outright

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