ZOZO (3092) Q2 2025 (Q&A) earnings summary

Executive summary

• Productivity improvements in logistics outpaced expectations in the first half, with AI and machine learning integration driving notable improvements in conversion rates and GMV.

• Net sales for the semi-annual period rose 9.5% year-over-year to ¥98,801 million, with gross profit up 9.3% to ¥92,013 million and operating profit up 5.3% to ¥30,475 million.

• Gross merchandise value increased 7.9% year-over-year to ¥279,153 million, driven by strong consumer demand and successful sales events.

• Promotional activities, including ZOZO Week and free shipping, were efficient, but the company is cautious about overuse to avoid customer dependency.

• Growth was supported by advertising business expansion, increased shipping income, and higher consignment sales.

Financial highlights

• Variable cost savings in ad spend, payroll, and shipping were realized in the first half, with plans to utilize these savings in the second half, resulting in no annual impact.

• Higher average order values in the first half led to lower shipping expenses than expected.

• Operating profit margin was 11.7% of gross merchandise value (excluding other GMV), down 0.3 percentage points year-over-year.

• Cash and cash equivalents at period end were ¥72,651 million, up ¥2,903 million from the previous year.

• Cash flow from operating activities increased 49.6% year-over-year to ¥23,350 million.

Outlook and guidance

• Full-year net sales forecast is ¥214,400 million (+8.8% YoY), with operating profit and ordinary profit both projected at ¥64,200 million (+6.9% and +7.4% YoY, respectively).

• Net profit attributable to owners of parent is forecast at ¥45,200 million (+1.9% YoY), with EPS of ¥152.21.

• LY Commerce GMV exceeded plans in the first half, with steady growth expected in the second half through continued promotions.

• Category expansion updates, including new segments, are planned for the full-year earnings briefing.

• No changes to previously announced business forecasts.