Tsi Holdings Co., Ltd. · TSE:3608
Tsi — H1 FY2025 Earnings Presentation
38 slides from Tsi's earnings presentation, Oct 15, 2024
Slide 1: First Half of Fiscal Year 2025 Financial Results Briefing
First Half of Fiscal Year 2025 Financial Results Briefing
Slide 2: Agenda
AGENDA 1 FY2025 1H Results Overview 2 Existing Channels Overview 3 Brands Overview 4 Topics 5 Structural Reforms Status 6 Full-Year Consolidated Earnings Forecast 7 Appendix 1 copyright © 2024 TSI HOLDINGS CO., LTD. All right reserved.
Slide 3: FY2025 1H Results Overview
Next Agenda FY2025 1H Results Overview
Slide 4: FY2025 1H: Executive Summary
FY2025 1H: Executive Summary Targets for Net Sales, Operating Income, and Net Profit Achieved as Structural Reforms Exceed Expectations Consolidated Sales Operating Income 1H Gross Profit ¥75,230 ¥-220 ¥-790 million million million Up ¥1,950 million YoY Down ¥750 million YoY Down ¥226 million YoY Up
Slide 5: FY2025 1H: Items Affecting Operating Income
FY2025 1H: Items Affecting Operating Income Earnings Declined, but Profitability Maintained at Previous Year's Level Excluding Impact of Temporary Expenses (in million yen) Earnings excluding temporary expenses in line with previous year Operating income was projected to decline YoY due to a decreas
Slide 6: FY2025 1H: Performance
FY2025 1H: Performance (in million yen) > Gross Profit 500 56.5% 60.0% • Rising raw material costs due to deteriorating 55.7% 54.5% 53.9% foreign exchange rates and soaring energy prices. Gross Profit 400 55.0% • Increased impairment losses due to higher ¥40,550 300 50.0% inventory levels. • Discoun
Slide 7: FY2025 1H: Items Affecting Net Profit
FY2025 1H: Items Affecting Net Profit The company recorded a negative ordinary income of 160 million yen, largely due to a strategic reduction in investment securities, which led to a decrease in dividend income. Additionally, non-operating losses, including foreign exchange losses and equity-method
Slide 8: Balance Sheet
Balance Sheet > Cash and Deposits Due to the repurchase of treasury stock and growth investments, there was a decrease of (in million yen) 2,980 million yen compared to the previous fiscal 1ST Half 2024 Ending Cumulative Q1ST 2025 year. 1ST Half 2025 Ending Feb. Feb. Ending Feb. > Inventory Composit
Slide 9: Existing Channels Overview
Existing Channels Overview 8
Slide 10: FY2025 1H: Existing Channels
FY2025 1H: Existing Channels Both domestic and international sales increased, but different challenges exist across channels: Domestic physical stores (department and non-department stores): While department store sales fell short of the previous year due to a net decrease in store count, overall ph
Slide 11: FY2025 1H: Existing Channels (E-commerce)
FY2025 1H: Existing Channels (E-commerce) Efforts to consolidate inventory across our e-commerce and third-party platforms domestically have been successful, resulting in improved inventory efficiency and increased sales. Excluding the impact of ending the 'UNDEFEATED' distribution agreement last ye
Slide 12: Brands Overview
Next Agenda Brands Overview
Slide 13: FY2025 1H: Core Brands
FY2025 1H: Core Brands (%: YoY sales) 98.5% YoY 102.3% YoY The brand struggled to maintain a balance between past Key stores in central Tokyo are driving sales. inventory and current-season products, yet sales MARGARET HOWELL’s GINZA SIX store and MHL’s remained on par with the previous year. The co
Slide 14: FY2025 1H: Growing Brands
FY2025 1H: Growing Brands Several Brands Achieved Double-Digit Growth Year-on-Year, Beyond the Core Brands (%: YoY sales) Strong Performers 143.5% YoY YLÈVE is experiencing consistent double-digit growth, with the Isetan Shinjuku store, which reopened in September last year, notably achieving over 3
Slide 15: FY2025 1H: Growing Brands
FY2025 1H: Growing Brands Pick Up Pick Up hueLe Museum, with its unique concept of Fashion × Flowers × Art, presents The much-anticipated third iteration of the renowned EDWIN × ETRE TOKYO a creative world that extends beyond clothing. collaboration has made its return this year. This collaboration
Slide 16: Topics
Next Agenda Topics
Slide 17: Brands Introduce Sub-brands, Showcasing a New Dimension
Brands Introduce Sub-brands, Showcasing a New Dimension In the upcoming autumn season, four prominent brands will unveil new product lines, leveraging their distinctive concepts to expedite the delivery of novel value and venture into interconnected segments of the fashion industry. PINKY & DIANNE a
Slide 18: Exclusive Distribution Deal with Alpha Industries for FW 2025 Japan Launch
Exclusive Distribution Deal with Alpha Industries, Inc. for FW 2025 Japan Launch Alpha Industries, a long-established supplier of authentic military apparel and urban lifestyle products with a dedicated global following, will be joining TSI's brand portfolio. Future Developments Starting in the fall
Slide 19: Achieving Environmental Impact Reduction and Conservation
Achieving Environmental Impact Reduction and Conservation Implement business activities with minimal environmental impact and promote a sustainable business model. Transition to Plastic-Free Shopping Bags by End of Sustainable FY2025 and Use FSC-Certified Paper* Material Sourcing Global 2050: Goals
Slide 20: Passing on to the Next Generation Through Technology and Expertise
Passing on to the Next Generation Through Technology and Expertise Collaborating with next-generation talent to tackle apparel industry challenges and drive sustainable growth in fashion. NANO universe and BUNKA Fashion College Collaborate on T-Shirt Production Using 'Made by ZOZO' in Hands-On Lectu
Slide 21: Empowering Society Through the Power of Fashion
Empowering Society Through the Power of Fashion Contributing to the creation of an inclusive society where everyone can shine as their true selves through fashion design. First Universal Design Initiative: 'MOVE WEAR,' Clothing for Wearable Arm Robot Developed by Ory Yoshifuji, is Now Finished. Soci
Slide 22: Structural Reforms Status
Structural Reforms Status 21
Slide 23: Profit Structure Reform
Profit Structure Reform (Excerpt from Medium-term Management Plan dated April 12, 2024) Purpose Current Issues Course of Action Completion Impact FYE Feb 2027 (1-year) Consolidate orders/improve purchasing leverage Approx. Purchase Cost Decentralized procurement is Reductions causing high COGM. Cost
Slide 24: Profit Structure Reform: Status
Profit Structure Reform: Status Purchase Cost Optimized Reductions Supply & Demand Management With a focus on reducing FOB costs through supplier consolidation An architecture for price optimization has been established by and local settlements, the company has initiated proactive measures, leveragi
Slide 25: Profit Structure Reform: Status
Profit Structure Reform: Status Retail Operation EC Integration & Reform System Renewal A scheme has been implemented to optimize staffing by By February 2025, TSI Inc. plans to relaunch the platform reviewing shifts and assignments, aiming to improve the “Mix.Tokyo” by consolidating its 13 existing
Slide 26: Profit Structure Reform: Status
Profit Structure Reform: Status Improve efficiency of costs including SG&A To maximize growth and profitability through optimal Address structural challenges unique to the company, resource allocation, the company will redefine its brand which are causing persistently high SG&A expense ratios, portf
Slide 27: Profit Structure Reform: Status
Profit Structure Reform: Status Reduction of Repurchase of non-business assets treasury stock We are advancing efforts to generate ¥10,000 million in cash over three The share repurchase program, which began in April 2024, concluded in years through the sale of investment securities and investment p
Slide 28: Full-Year Consolidated Earnings Forecast
FY 2025 Full-Year Consolidated Earnings Forecast 27
Slide 29: Full-Year Consolidated Earnings Forecast
Full-Year Consolidated Earnings Forecast The consolidated earnings forecast for the full year remains unchanged at this stage. FY2025 Forecast • Impact on gross profit due to inventory (in million yen) optimization measures Sales 160,000 • Business withdrawal as part of the structural reform and bus
Slide 30: Creator of Fashion Entertainment
We create empathy and social value across the world through the power of fashion entertainment. Creator of Fashion Entertainment copyright © 2024 TSI HOLDINGS CO., LTD. All right reserved. 29
Slide 31: Appendix
Next Agenda Appendix
Slide 32: Financial Highlights for the 1H FY2025
Financial Highlights for the 1H FY2025 (in million yen) Q2ND 2024 Ending Feb. Q2ND 2025 Ending Feb. 2Q Overview Y/Y Composition Composition Results Results Y/Y (%) （New Revenue Recognition Standards） Rate (%) Rate (%) Change Net Sales 33,905 100.0 35,935 100.0 2,029 106.0 Gross Profit 18,278 53.9 18
Slide 33: Financial Highlights for the 1H FY2025
Financial Highlights for the 1H FY2025 (in million yen) 1ST Half 2024 Ending 1st Half Overview Feb. 1ST Half 2025 Ending Feb. （New Revenue Recognition Standards） Composition Composition Y/Y Results Rate (%) Results Rate (%) Y/Y (%) Change Net Sales 73,278 100.0 75,230 100.0 1,951 102.7 Gross Profit
Slide 34: Financial Highlights: Net Sales Per Channel
Financial Highlights for the 1H FY2025 Net Sales Per Channel （New Revenue recognition standards） 1ST Half 2024 Ending Feb. 1ST Half 2025 Ending Feb. Results Composition Results Composition Composition Rate 前々期比 構成比前々期差 Y/Y (%) (Million yen) Rate (%) (Million yen) Rate (%) Y/Y Change(pt) （％） （pt） Dep
Slide 35: Financial Highlights: Brands Overview
Financial Highlights for the 1H FY2025 (in million yen) Brands Overview 1ST Half 2024 Ending Feb. 1ST Half 2025 Ending Feb. YoY （New Revenue recognition standards） Composition Gross Profit Composition Gross Profit Gross Profit Sales Sales Sales Rate (%) Ratio (%) Rate (%) Ratio (%) Ratio (pt) 1. PEA
Slide 36: Trends in Sales for Domestic Existing Stores and All Stores
Financial Highlights for the 1H FY2025 Trends in Sales for Domestic Existing Stores and All Stores 1St Half 2024 Ending Feb. 1St Half 2024 Ending Feb. All Stores：102.3％ All Stores：103.0％ Existing Stores：106.5％ Existing Stores：103.9％ copyright © 2024 TSI HOLDINGS CO., LTD. All right reserved. 35
Slide 37: Number of Stores
Financial Highlights for the 1H FY2025 Number or Stores 1ST Half 2024 FY Ending Store Store 1ST Half 2025 Y/Y Q2/Q4 Ending Feb. Feb. 2024 Open Close Ending Feb. Change Change Domestic 733 731 +31 -34 728 -5 -3 Apparel Overseas 30 30 +2 -3 29 -1 -1 Total 763 761 +33 -37 757 -6 -4 Restaurant Domestic
Slide 38: Forward-looking statements notice
This document comprises of forward-looking statements, including forecasts, outlooks, targets, and plans pertaining to the Company, its subsidiaries, and affiliates. The statements are based on the information available to the Company as of the date of this document and certain reasonable assumption