ZOZO : Consolidated Financial Results For the third quarter of fiscal year ending March 31, 2022〔JGAAP〕

Consolidated Financial Results

For the third quarter of fiscal year ending March 31, 2022〔JGAAP〕

January 28, 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	February 14, 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 third quarter of the fiscal year ending March 31, 2022 (April 1, 2021 to December

31, 2021)

(1) Consolidated business results (cumulative)

(Percentages indicateYoY changes.)

		Net sales	Operating profit	Ordinary profit	Profit attributable to
		owners of parents
Third quarter of fiscal		Million yen	%	Million yen		%	Million yen	%	Million yen	%
year ending March 31,	123,778	14.1	38,779		14.8	38,756	14.4	26,653	12.3
2022
Third quarter of fiscal
year ended March	108,480	18.1	33,785		74.3	33,891	76.3	23,725	94.9
31,2021
(NOTE) Comprehensive income			Third Quarter of FiscalYear Ending March 2022	26,762Million yen	(12.6%)
			Third Quarter of FiscalYear Ending March 2021	23,764Million yen	(95.2%)
				Fully diluted
		Net profit per share	Per share
				Net profit
Third quarter of fiscal year			Yen			Yen
		88.87			88.87
ending March 31, 2022
Third quarter of fiscal year			77.70			-
ended March 31, 2021

(NOTE)Fully diluted net profit per share for the third quarter of fiscal year ending March 2021 (consolidated cumulative period) is not presented because there are no potential shares with dilutive effects.

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio
Third quarter of fiscal		Million yen		Million yen			%
year ending March 31,		119,713		47,255			39.3
2022
Fiscal year ended March		125,656		55,507			44.1
31, 2021
(Reference) Shareholders' equityThird quarter of fiscal year ending March 31, 2022	47,100Million yen
	Fiscal year ended March 31, 2021			55,433Million 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
-		15.00	-		26.00		41.00
March 31, 2021
Fiscal year ending	-		22.00	-
March 31, 2022
Fiscal year ending March						33.00		55.00
31, 2022 (Forecast)
(NOTE)Revisions to the most recently announced dividend forecasts	:		None

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3. Consolidated financial forecasts for the fiscal year ending March 31, 2022 (April 1, 2021 to March 31, 2022)

(Percentages indicate year-on-year changes)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Net profit
		owners of parent	per share
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 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)

New -Exclusion

(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	:	Yes
standards
② Changes in accounting policies other than ①	:	None
③ Changes in accounting estimates	:	None
④ Restatements	:	None
(4) Number of shares outstanding (Ordinary stock)

① Year-end shares outstanding (including treasury stocks)

• Number of year-end treasury stocks

• Average number of shares during the period

Q3 of fiscal year		Fiscal year
ending March	311,644,285Shares	ended March	311,644,285Shares
2022		2021
Q3 of fiscal year		Fiscal year
ending March	11,833,667Shares	ended March	6,279,914Shares
2022		2021
Q3 of fiscal year		Q3 of Fiscal year
ending March	299,918,547Shares	ended March	305,336,554Shares
2022		2021

• Quarterly financial report is not subject to quarterly review by a certified public accountant or an auditing firm.
• Explanations and other special notes concerning the appropriate use of financial forecasts
• • 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 third quarter ended December 31, 2021 (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 to hold a financial result briefing for institutional investors and analysts on January 28, 2022. 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 third quarter ended December 31, 2021 ...........................................................	5
(1) Overview of business results........................................................................................................................................	5
(2)	Explanation 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
(Changes in Accounting Policies)..................................................................................................................................	16

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1.Qualitative information on results for the third quarter ended December 31, 2021

1. Overview of business results
   Business results for the current fiscal year

[Table 1]YoY comparison

(Unit: Million yen)

Consolidated cumulative third	Consolidated cumulative third
quarter of previous fiscal year	quarter of current fiscal year	YoY basis
(April 1 to December 31, 2020)	(April 1 to December 31, 2021)

Gross merchandise value	304,243	(101.2%)	375,506	(109.9%)	23.4%
Gross merchandise value (excluding other GMV)	300,774	(100.0%)	341,587	(100.0%)	13.6%
Net sales	108,480	(36.1%)	123,778	(36.2%)	14.1%
Gross profit	102,960	(34.2%)	116,620	(34.1%)	13.3%
Operating profit	33,785	(11.2%)	38,779	(11.4%)	14.8%
Ordinary profit	33,891	(11.3%)	38,756	(11.3%)	14.4%
Profit attributable to owners of parent	23,725	(7.9%)	26,653	(7.8%)	12.3%

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 third 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" (10 days in total from May 14 to 23, 2021, 10 days in total from September 15 to 20 and 23 to 26, 17 days in total from November 5 to 14 and 17 to 23) and broadcastedTV commercial to attract customers in the period of summer and winter sales. In addition, we continued to proactively welcome 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 of 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 & sales. In order to strengthen a certain category, we are expanding merchandise value of the shoe category in ZOZOTOWN with "ZOZOMAT".Of the shoes available in ZOZOTOWN at present, the number of shoes covered by ZOZOMAT exceeds 4,185 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 domestic and overseas luxury brands. ZOZOCOSME handles more than 600 cosmetics brands both from domestic and overseas brands as of the end of December 2021, 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 recommends the best foundation 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. ZOZOVILLA is a luxury and designer brands zone in ZOZOTOWN, with more than 120 domestic and overseas luxury brands. 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 branding as ZOZOTOWN through the operation of ZOZOVILLA.

Sales of ZOZOTOWN PayPay Mall Shop have been growing steadily due to the good retention rate 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

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