1. Q1 FY2027 Earnings Overview and Highlights

For the first quarter (1Q) of the fiscal year ending March 31, 2027, ZOZO, Inc. reported consolidated Gross Merchandise Value (GMV, excluding other GMV) of 156.69 billion yen (up 5.1% YoY) and adjusted EBITDA of 18.74 billion yen (up 3.6% YoY) , marking a record high for a first quarter .

Revenue also reached 56.13 billion yen (up 3.9% YoY) , with operating profit at 17.88 billion yen (up 5.7% YoY) and quarterly net profit attributable to owners of the parent at 11.89 billion yen (up 4.6% YoY) , achieving year-on-year growth across all profit categories.

The achievement rates against the initial full-year forecasts are 23.2% for revenue, 24.0% for operating profit, and 24.1% for adjusted EBITDA, indicating a very steady progression relative to initial expectations that account for seasonal fluctuations.

[Significance and Background of the Slide Above]

This slide provides an overview of the consolidated performance, summarizing the most critical metrics for this earnings release at a glance. Notably, the growth rates for operating profit (+5.7%) and ordinary profit (+7.4%) exceeded the growth rate of GMV (excluding others, +5.1%). This confirms that the company is not only expanding in scale but also maintaining a high-profit structure driven by operational efficiency and effective cost control. Furthermore, the uniform progress of approximately 24% across all profit items against the full-year plan suggests high predictability for the current fiscal year's performance targets.

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2. Analysis of Factors Affecting Revenue and GMV

Breaking down the GMV performance in the first quarter reveals both headwinds from the external environment and the internal measures taken to offset them.

① Weather Factors and Recent Consumption Trends

In June, nationwide temperatures remained lower than the same period last year, causing demand for summer apparel to start slightly slower than anticipated. However, this was offset by successful customer acquisition campaigns in April and May, as well as strengthened promotions, allowing the company to maintain positive growth for the quarter as a whole.

② GMV Breakdown by Business Segment

• ZOZOTOWN Business : GMV of 126.01 billion yen (up 3.6% YoY)
  • Consignment Sales : 120.38 billion yen (up 3.6% YoY) , with the core business performing steadily.
  • Purchase and Manufacturing Sales : 560 million yen (down 32.1% YoY) .
  • USED Sales : 5.05 billion yen (up 10.0% YoY) , achieving double-digit growth due to rising demand for reuse.
• LINE Yahoo Commerce : GMV of 18.95 billion yen (up 7.6% YoY) , contributed by store expansion within Yahoo! Shopping.
• Cosmetics Category (ZOZOTOWN + LINE Yahoo) : GMV of 4.44 billion yen (up 17.5% YoY) , maintaining high growth.
• LYST (Global Fashion Platform) : GMV of 10.08 billion yen (up 33.3% YoY) , partly due to an additional month of consolidation compared to the previous year.
• BtoB Business : GMV of 164 million yen (down 27.1% YoY) .

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3. Analysis of Adjusted EBITDA and Profit Structure

Adjusted EBITDA increased from 18.09 billion yen in the same period last year to 18.74 billion yen (+650 million yen, +3.6% YoY) . The detailed analysis of profit drivers is as follows:

[Significance and Background of the Slide Above]

This slide is a key document that breaks down the internal factors behind the record-high EBITDA into "gross profit expansion" and "cost fluctuations." The primary driver of profit growth was the increase in gross profit (+1.47 billion yen) resulting from GMV growth in the ZOZOTOWN and LINE Yahoo Commerce businesses. Additionally, variable costs decreased by 390 million yen (boosting profit) due to improved delivery efficiency and streamlined operations within logistics centers. Conversely, negative factors included an increase in effective PR expenses (-750 million yen) for new member acquisition and an increase in fixed costs (-730 million yen) due to a larger workforce and the introduction of material handling equipment. This visualizes a structure where the company continues to invest in marketing and logistics infrastructure while securing profits through top-line growth and delivery cost suppression.

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4. SG&A Expenses and Operational Efficiency

Total SG&A expenses were 34.58 billion yen (up 2.2% YoY) , and the ratio of SG&A expenses to GMV (excluding others) reached 22.1% (an improvement of 0.6 percentage points YoY) .

Trends in Major SG&A Items:

• Personnel Expenses (5.4% ratio, -0.1pt YoY) : Although the number of consolidated employees increased from 1,900 at the end of the same period last year to 1,941, the logistics-related personnel expense ratio decreased due to improved warehouse operational efficiency.
• Packing and Freight Expenses (5.7% ratio, -0.6pt YoY) : Cost reductions are progressing significantly due to efforts to improve delivery efficiency and the optimization of economic terms with delivery partners introduced in October 2025.
• Effective Promotion Expenses (4.5% ratio) : While expenses increased compared to the same period last year due to higher investment in web advertising to strengthen new member acquisition, the total remained below the initial plan due to the deferral of certain initiatives.
• Depreciation (1.0%) and Amortization of Goodwill (0.5%) : Depreciation increased due to the start of amortization for material handling equipment at existing logistics centers, and goodwill amortization increased following the consolidation of LYST and High Link.

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5. Member Base and Key KPIs

Key KPIs measuring the platform value of ZOZOTOWN continue to show an upward trend.

• Annual Buyers : Reached 13.415 million (up 886,000 YoY) , showing steady expansion.
  • Active Members : 12.716 million
  • Guest Buyers : 699,000
• Active Member Demographics : Female ratio 72% , Kanto area ratio 40.5% , average age 34.7 years (Male 32.9, Female 35.4).
• Annual Purchase Metrics per Member :
  • Annual Purchase Amount: 40,900 yen
  • Annual Purchase Items: 10.5 items
• Annual Shipments : 14.814 million (up 4.0% YoY) .
• Number of ZOZOTOWN Shops : 1,714 shops (1,693 consignment, 21 purchase).

While the customer base is expanding through continuous acquisition measures, maintaining engagement among existing customers remains the key to improving future purchase unit prices.

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6. Mid-Term Management Plan and Growth Strategy by Domain (More / Near / Global)

ZOZO has set a long-term goal of achieving 90 billion yen in adjusted EBITDA by the fiscal year ending March 31, 2030 .

[Significance and Background of the Slide Above]

This slide illustrates the "domain-based portfolio" showing the growth path ZOZO intends to follow in the mid-to-long term. For the 90 billion yen EBITDA target in FY2030, the roles and target scales for each domain are clearly defined (More Fashion: 80 billion yen, Near Fashion: 5 billion yen, Global: 5 billion yen). The strategy is to maintain an overwhelming profit base in the core "More Fashion domain (ZOZOTOWN)" while cultivating the new "Near Fashion domain (fashion-related/lifestyle)" and "Global domain (overseas)" as the second and third pillars of growth. In this first quarter, the consolidation and PMI of High Link, which operates the perfume subscription service "COLORIA," progressed in the Near Fashion domain, and the implementation of LYST's checkout function with expanded partners proceeded as planned in the Global domain, demonstrating the realization of the strategy.

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7. Capital Policy and Shareholder Returns (Outlook for ROE over 50%)

ZOZO is announcing and promoting proactive capital measures aimed at further enhancing shareholder returns and improving corporate value through capital efficiency (ROE).

• Shareholder Return Policy : Aiming for a total return ratio of over 80% on a 5-year average starting from the fiscal year ended March 2024 (based on a 70% dividend payout ratio + flexible share buybacks).
• Share Buybacks and Cancellation :
  • Acquisition Limit : 30 billion yen or 43 million shares (Acquisition period: June 17, 2026, to December 30, 2026, scheduled).
  • Cancellation Policy : All acquired treasury shares are scheduled to be cancelled on January 29, 2027 .
• Dividend Forecast : Annual dividend per share is planned at 40.0 yen (payout ratio 71.2%) .
• Outlook for Capital Efficiency : With the series of shareholder return measures and share buybacks, ROE for the fiscal year ending March 2027 is expected to exceed 50% (previous fiscal year result was 46.6%).

The achievement of a high-level ROE confirms that the company maintains extremely high productivity with limited equity capital.

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8. Summary and Future Focus Points

Despite temporary external environmental changes such as the slowdown in summer demand due to climate factors, the Q1 FY2027 results were strong, achieving record-high EBITDA through cost reductions from delivery efficiency and increased gross profit .

Moving forward, the following points will be the focus for the mid-term:

1. Recovery of summer demand and acceleration of promotional effects for the second half
2. Synergy creation and profit contribution from Near Fashion (collaboration with High Link, etc.) and Global (LYST)
3. Improvement of capital efficiency to over 50% ROE and shareholder return results through share buybacks and cancellations

The company continues to develop by balancing a solid foundation in existing businesses with a steady approach to new growth areas.