It is now time to start the financial results announcement of ZOZO for the first quarter of FY 2020, ending in March. In order to prevent the spread of COVID-19, we changed the way we organize the session. We would only offer a live streaming for this time. I would like to now introduce the participants. President and CEO, Kotaro Sawada. Executive Vice President and CFO, Koji Yanagisawa. We have two presenters today. CFO Yanagisawa will take us through the business results.
Good afternoon. I am Yanagisawa. As it was mentioned, just like the previous time, in order to prevent the spread of COVID-19, we are offering this earnings results announcement only through live streaming on YouTube. The presentation document we will be using today has already been uploaded to the IR page of our website, so please take a look at it.
Now, I would like to walk you through the earnings results of the first quarter of FY 2020, ending in March of 2021. By the way, the fashion that we are wearing, more fashion is the key word for this fiscal year. Saki Inoue from EC division dressed us up today. She served as our stylist to do a makeover for us. My theme of this styling. What was the theme of my styling? I forget what it was. Was it botanical? Botanical mode. I see. Botanical mode it is. Every three months, whenever we have a financial results announcement, we will be styled in different ways, so please look forward to that. Now I would like to walk you through the earnings results of the first quarter. Let's jump right in. Gross merchandise value, GMV, went up by 19.5% year-on-year, landing at JPY 95.3 billion.
Operating profit was up by 33.9%, landing at JPY 10.4 billion. Operating profit margin was 10.9%, improving by 1.1 points year-on-year. We are quite happy. We did more than what we expected. If you go to the next slide, you have the quarterly changes of the business results. Regarding GMV, the impact coming from the spread of COVID-19 resulted in a significant growth, which exceeded the level of the past few quarters on a year-on-year basis. In Japan, people were requested to stay home until the end of May, after the state of emergency declaration was issued. We did see some negative impact of that as the demand for fashion slowed down. But for the brands, the sales channels were restricted because their clothes were temporarily closed, and we focused our initiatives to maximize our sales capabilities to support the brands.
As a result of that, the positive impact from digital shift proved to be greater, offsetting the negative impact, allowing us to land with a high growth rate. Regarding OP, we saw an increase of gross profit from GMV growth, and there was a discount expense incurred for ZOZOARIGATO program up until the end of May last year. The factors resulted in the improvement of OP from the same period of the previous year. Next, I'd like to touch on the highlights of the business results. Let's first look at increase and decrease analysis of the operating profit. OP was JPY 7.7 billion in the first quarter last year. It was JPY 10.4 billion this year, up by JPY 2.7 billion approximately. To give you a breakdown, factors attributable to the growth of the OP were, there were four of them.
The increase in sales and consignment shops commission was JPY 5.45 billion. The increase of gross profit with advertisement business was JPY 220 million. The increase of gross profit with other sales was JPY 330 million. Reduction of other expenses amounted to JPY 320 million.
On the other hand, factors that drove down the OP, we have three of them. First, the increase in fixed costs due to higher number of logistic bases and the number of employees. That is JPY 810 million. The increase of variable costs that go up in correlation with GMV growth, that is JPY 2.73 billion. The increase of promotion expenses, that is JPY 140 million. For the breakdown of fixed and variable costs, please refer to the document of the financial results. Next, here is the balance sheet. There is no special topic to highlight. Please check the document for details. This is the quarterly changes of GMV.
Please refer to the breakdown by business in the consolidated financial results. You will be able to find that in consolidated financial results. There is not much change. Next, SG&A. SG&A against GMV for the first quarter amounted to 22.9%, down by 0.3% year-on-year. It is attributed mainly to some reasons. There are, as a matter of fact, three reasons behind it. First, we started granting ZOZO points equivalent to 1% of the purchase from April 1st, but we finished that program. This brought SG&A down by 0.2% in the point-related expenses column. There is a decrease of rent, that is 0.2%, and one-off expenses accrued last year saw a decrease, resulting in 0.8% decline. Factors that drove up SG&A are the shipping cost increase in correlation with the average order value decline, that is +0.7%.
Ratio increase from the average retail price decline, increase of part-timers' hourly wages, and contract conditions alteration with staffing companies resulted in 0.2% increase in logistics-related expenses. The increase in payroll cost of employees, that is, was up by 0.1%. These are the factors that drove up the SG&A. Let us now look at the OP and OPM changes. This is quarterly basis. As I mentioned, SG&A ratio saw a decline. On top of that, gross profit improved because we no longer have the discount of ZOZOARIGATO that we had last year. This improved OPM year-on-year. Moving on to the main KPIs of ZOZOTOWN, the number of total buyers. Just like before, these KPIs do not include the results of PayPay Mall. This is strictly the performance of ZOZOTOWN.
The number of total buyers was up by 390,000 from the previous quarter, amounting to 8.66 million, of which active members was 7.22 million, increasing by 380,000 against the previous quarter. The 390,000 increase was also from the previous quarter. The guest buyers just slightly increased, finishing at 1.43 million. Concerning active members increase, as I have been saying, with the spread of COVID-19, digital shift accelerated. Therefore, the number of newly recruited active members turned out to be high, and it saw a significant increase at a level that we had not seen in quite some time. On the other hand, guest buyers just slightly increased, and this is in reaction to ZOZOARIGATO program that we conducted last year. Because the active members increased quite dramatically during ZOZOARIGATO period last year. Let us go to the number of shops on ZOZOTOWN.
As of the end of the first quarter, the number of shops was 1,348 shops, up by 11 shops from the end of the previous quarter. That is a net increase. We had 28 shops joining our platform this quarter. To name a few, we welcomed a luxury brand of LVMH group, LOEWE, and Stella McCartney, and a casual wear specialty store, Right-on, that has come back on board. Next, let us look at average retail price. Average retail price was JPY 3,443, down by 11.8% year-on-year. The decline is attributed to, from the beginning of June, already we started the summer sale. We also had ZOZO Week, and we also did time-bound sales and other sale events. This is a special circumstances we are in, so we decided to proactively conduct sales. Also, multiple brands decided to launch sales earlier than usual in order to sell down the inventory.
These factors pushed up the sales ratio of GMV, and this worked to decrease the average retail price. Also, in the same period of last year, we offered ZOZOARIGATO program. That was a subscription-based discount program. ARIGATO members tended to buy higher priced products than usual. So we had a higher performance, and this affected us this year negatively, and we saw a significant drop of average retail price. Let us go to average order value. The reason for the decline, exactly the same as what I have mentioned. The average order value was JPY 7,409, down by 11.7% year-on-year. On the other hand, there is the number of shipments. ARP and average order value are going down, but the number of shipments is growing to drive up the GMV. The number of shipments saw an increase of 24.6% year-on-year.
In the first quarter, we were in a very tough market, but with the fulfillment centers and the customer support centers, we were able to operate them without stopping other services, and I think that worked positively for us. That is it for the business results of the first quarter of FY 2020, ending in March 2021. When we made the full-year earnings results announcement of FY 2019 on April 28th, we could not fully assess the impact of COVID-19 back then on our business performance. So we decided not to disclose the full-year business plan. However, this time, we have disclosed our business plan based on information and projections obtainable at this stage. But this announced business plan does not factor in the possible large-scale stagnation of consumption, which may take place with the resurgence of COVID-19.
Our actual business performance may be greatly different from the plan, depending on the future development of this epidemic. So please bear that in mind. Please allow me to share our full-year consolidated business performance forecast. I am sorry, I forgot to say this in the beginning, but the theme for this fiscal year is Year 2020, ZOZO Year. It has a rather pop culture design, and this will be the design that we will implement for this fiscal year. You are going to notice that there are employees of ours that are showing up as characters. Back to the topic. This is the business performance forecast and estimated dividends for FY 2020. The plan of this fiscal year is to achieve GMV of JPY 387.3 billion, which has increased by 12.2% year-on-year. Net sales of JPY 143.7 billion, OP of JPY 39.5 billion, OPM of 10.2% against the GMV.
Profit attributable to owners of parent, JPY 27.6 billion, net profit per share, JPY 90.4, and estimated dividends per share, JPY 37. This is the plan. Regarding the shareholder return, we would like to have the same payout ratio of 40% for this year as well. That is why the estimated dividends per share is JPY 37. This is our target by business. Please take a look at it in the document. Confined shops, that is up by 7.2%, JPY 331 billion. ZOZOUSED, JPY 14.9 billion, PayPay Mall, JPY 20 billion. That is 220% increase that we are estimating to have.
B2B, that is also JPY 20 billion, plus 66.2%. PB, that is going to shrink, and MSP, JPY 1.2 billion, and ad business revenue, JPY 4.2 billion, an estimated increase by 54.6%. That is the plan. This brings me to the end of my part. I would like to pass the microphone over to Sawada.
Good afternoon. I am Sawada, the President of ZOZO. From my side, we would like to talk about how we spent the first quarter and how we are going to spend the rest of the fiscal year. By the way, my theme of my styling is memory of summer. Remote work is really taking the main stage now, and I wanted to look good on screens. That is why I am dressed up like this. Our business is operating well. I think that is the question that you have in your mind. In a nutshell, the logistics and the operation are going well. In April, to be honest, we could not really anticipate what was to come, and we were very cautious in the operation of our business. We were very wary.
It is true that many unexpected things did take place, but we overcame each one of them, and at this stage, we are able to operate our business in a good way, rest assured. People who are working from home, they are getting used to that new normal, and it is going very smoothly.
Going forward, we believe that COVID-19 situation will prolong. As I said in the beginning of this fiscal year, we would like to support the very foundation of this fashion industry with our sales capability. That is going to be the mission for us going forward as well. We are going to leverage our sales capability, and we looked into other things we could do in the first quarter. There are some things that we made into actual initiatives. That is what I would like to touch upon. As you can see here, we sold charity T-shirts.
We reached out to the brands to see if they can support us. You do not really see the visual, but if you look at the back side of this T-shirt, you see all of the brands that supported us in this initiative. The proceeds that we gain from this, as you can see here, there is a label that says, "SAVE FASHION, SAVE THE TOWN." What we are going to do is to distribute this hand sanitizer gels to physical stores in Japan.
SAVE FASHION, SAVE THE TOWN is the concept. These are special times that we are living in, and we are hoping that fashion comes back to town as early as possible. That is the hope that we embedded in this program. If you have the chance, please make sure that you take all the measures you can to protect yourself from the infection, and go to the stores.
One more thing that we did. This is a collaboration program that we initiated with Yamato Transport. It is called EAZY. It is a service provided by Yamato Transport. In the first quarter, we were the first player to implement this service before the full launch. Basically, this allows for users to have non-face-to-face receipt of packages. If you sign up for it, then the delivery person will leave the package at the doorstep. People are a bit hesitant to receive packages physically. This may be an answer to that hesitation. The number of packages is surging. We believe that we are also contributing to lessening the workload of the delivery sector as well. There is a huge demand for this. Actually, 17% of eligible users are actively using this service.
I believe that this is in tune with the time as a service, and what we would like to do together with Yamato Transport is to spread this even further. By the way, it is not S, it is Z. EAZY. This is not maybe because Yamato wanted to use Z for us. I do not think so. Those are the initiatives that we have undertaken. As Yanagisawa mentioned, he talked about the business performance. I want to go in to talk about the actual business from here on. As you can see here, I think this is the performance in a nutshell. In one word, this is what happened, as it was explained to you by Yanagisawa just now. Around April, we were not really sure which direction this sign will face. We were uncertain.
Looking back in retrospect, we were able to understand that there was more effect of digital shift than the lowering in demand. It could be because of the uniqueness of the services that we offer. I would like to talk a little bit more about that. On the Y-axis, you have e-commerce usage, high and low, and on the X-axis, there is interest in fashion, high and low. We want to map out where our users are in this chart. ZOZOTOWN users have a high interest in fashion, and their e-commerce usage is, of course, very high. So that is right top. Next to it, that is on the left-hand side for you, that is where PayPay Mall ZOZOTOWN will be positioned. They are less fashion sensitive, but the usage of e-commerce is quite high.
These are the segments that we have as our clients, and these will be the positions that will be mapped out in the chart. What happened with COVID-19 is this. First of all, on the right, that is people who have high interest in fashion. What we realized in this first quarter is that those who are very fashion sensitive exhibited strong demand for fashion regardless of the COVID-19 situation. The more left you go, the more people tended to buy other categories. That was not the case for the right-hand segment. We have some factual data here. The right bottom arrow is the percentage of new users we required during this period. Against the previous year, the number of new users increased by 59.6%. I think this is the embodiment of digital shift. What happened to the existing users? That is indicated on the right top.
In these circumstances, the demand did not slow down. Compared to the last year, the usage of the existing users increased by 8.5%. ZOZOTOWN has a lot of clientele that belongs to this group, and I believe that was our strength under COVID-19 environment. What happened to PayPay Mall ZOZOTOWN? We were able to leverage great synergies here as well. PayPay Mall is a comprehensive mall. The demand to buy various categories of merchandise was something that we saw during those times, and people came from other categories to fashion. We were able to bring about great synergies here. If the number of new users that comes to ZOZOTOWN was 100%, then we are able to get about 24.5% of new users via PayPay Mall. This is how we look at the business performance of the first quarter.
Next, what are we going to do in the future? I believe that this is in line with what you would expect from us. First of all, in the future, we're very certain that there will be further acceleration of EC. For our brands, we're saying that they are trying to redefine their physical stores. We don't know yet what will be the ultimate right answer. We're exploring different ideas now in that field. We have interviewed the brands, and we realized that there are fewer brands that can kick into full gear when it comes to production. I believe that they will put control over their production. For the competitors, we're going to try to make EC even bigger. It's not just limited to fashion, but in all across categories.
Keeping these in mind, the directions that we will take is to increase touchpoints with users through selling space expansion and product line of expansion policies that we have. There is no change to that policy. We're going to further accelerate this. There could be a risk of scarcity of inventory, but we have a lot of brands as our clients, and we have a very strong connection, bond with the brands. We would like to leverage this connection so that we will be able to have them secure inventory for us at an early stage. In the beginning of this fiscal year, I also talked about differentiating our products, and I'm going to delve into this more in detail later on. We are progressing our initiatives in D2C and luxury brands.
Also, when brands redefine the physical store operation, we would also think of how we can contribute to that redefining initiative. I can't really talk about this more in detail today, but we would like to lead physical stores by offering store solutions so that they can shift more towards digital. Let's talk about the selling space expansion. How are we progressing there? I would like to mainly here talk about PayPay Mall and PayPay. As you know, we have already launched ourselves on PayPay Mall. In this first quarter, we established the linkage with PayPay Flea Market. We launched this on July 1st. What you can do is to list the items that you have purchased from ZOZOTOWN on PayPay Flea Market very easily. This is thanks to the connection that we established between Yahoo! JAPAN ID and ZOZO ID.
We will be able to establish a firm fashion ecosystem by having an initiative like this. We are going to undertake other initiatives in this area as well. This is on our way as well. This is starting in mid-August. We are going to introduce PayPay as a payment method. In physical stores, numerous stores will allow you to pay via PayPay payment. What we are going to do is to implement a feature that would allow users to use PayPay as a payment method so that we will be able to recruit PayPay users as our users. We also want to accelerate the drive for EC. Of course, we are planning to do different types of promotions, so please look forward to this new initiative that will kick off in mid-August.
Aside from those, we have other programs that we will run in collaboration with Z Holdings and SoftBank. There is going to be ZOZOTOWN promotion using SoftBank. We can also use Yahoo! JAPAN with ZOZOTOWN and WEAR. We can also use data science as a forte for product recommendation. That was about the expansion of selling spaces. From here on, I would like to talk about the expansion of product lineup. As Yanagisawa mentioned, we were able to welcome some luxury brands. To be more specific, there is LOEWE, Stella McCartney, and Marni, who we were able to welcome this first quarter. We did not just welcome them on board. We devised great ideas for the promotions. In the back of ZOZOTOWN, there is a lot of AI that is going on, that is in operation.
For luxury brands, what we can do is to identify those who are likely to buy luxury brands like these. We will reach out to them through promotions. So far, it is going quite well. We have a positive feedback of that. If you receive an email to recommend luxury brands, that is because our AI has identified you as someone who can look magnificent in luxury brands. We have also received offers from other luxury brands. We are very proactive in our sales activities as well. We would like to continue to differentiate ourselves from other EC players with our product lineup. Let us go on to talk about shoes. ZOZOMAT have been released. I mentioned that we are committed to expand the revenue of shoes. I want to give you the status of this. ZOZOMAT have been delivered to more than 1.28 million.
That is more than 1 million. It has been measured by more than 1 million as well. GMV of the shoe category grew by 18% year-on-year. When it comes to the shoe category, we believe that this is a category that is going to be greatly impacted when people refrain from going out. Nevertheless, the growth rate is at the par level as the average GMV growth. That is thanks to ZOZOMAT. The ratio of those who made the purchase for the first time at ZOZOTOWN, many of them made a purchase of shoes because there was ZOZOMAT. This is something that we would like to continue to do as an initiative. This is not a part of the shoe category, but we would like to have similar technologies as the one that we have with ZOZOMAT.
We already have technologies that are similar to the technology that is leveraged for ZOZOMAT, and they are close to being complete. We want to introduce these new technologies in different categories to further grow our business. We believe that we will be able to launch some of them in the first half. Please look forward to those initiatives that are on the way. Next, this is also about the expansion of product lineup. We have kicked off a project called YOUR BRAND PROJECT 2020. In the previous announcement session, we talked about D2C. YOUR BRAND PROJECT 2020 is a D2C program. D2C is a bit difficult to define, so what we have done is to give a name to it. We are working very hard on this right now. This chart is the same as what we have shared with you before.
I just wanted to take some time to explain this once again to you. We will deploy influencers, and together with influencers, we will do the item planning. The manufacturing will be done by us, and the sales will be done through ZOZOTOWN and the brand's own e-commerce sites. Influencers, many of them happen to be specialists of social media, so influencers can promote them on their accounts. Of course, there is a possibility that these items can be manufactured under our brand partners. That is one way to go about this as well. When we thought of the future of apparel business, we thought that this style of sales is going to be a reality in the future. We were very certain about that, and the people in the field are really excited to engage in this program.
How are we gathering influencers right now to take part in this program? Maybe some of you are aware of what is going on, but we conducted auditions. We had some 7,000 people who participated in these auditions, and we are very grateful for their participation. Humbly, we had interviews with them. Of course, aside from those 7,000, we also had other influencers that we wanted to team up with, and we reached out to them. Then we narrowed it down to 20 people that would have partnership with us in this program. I am afraid I cannot disclose the specific names of people who would take part in this program. Sorry that the letters are quite small, but we have fashionistas who have caught on on WEAR. We also have sports YouTubers with more than 400 million accumulative views.
We also have a female comedian who is starting to establish a new comedy on social media. Of course, we have fashionistas, but aside from them, we also have other talents that exude their skills and their uniqueness in other categories as well. They can also take part in making apparel items, fashion items. When these 20 can get together, I believe that we can make something very interesting, and I am sure this will work to excite the people. We are already preparing ourselves for the launch that is planned in October 2020. On top of that, we are starting to get an outlook on the big name influencers that we may be able to partner with. In the context of D2C, in the context of influencer, we believe that we have been able to create strong item planning. I think that was great.
In the course of it, we were able to gain a very strong partner today. The release has been announced already. We did an M&A of a company called yutori. yutori was established only two years ago. It is a very young company, and the leadership, the two of them are very young too. We would like to fully leverage social media and fully understand the needs of the consumers, so that we can sell fashion to them. In the last two years, this company has exuded a proven track record in doing so. We have been speaking to those two people in the leadership, and we saw that they have great passion and great intelligence, but at the same time, they are very flexible in the way they think. I believe that there was a strong affinity we have with them.
It did not seem like it was the first time for us to meet when we met for the first time. I am relieved to be able to make this announcement today, and we are very excited to be able to partner with them. CEO of yutori, Mr. Takanori Kataishi, is here with us, and he would give us a few words later. This brings me to the end of my presentation for this fiscal results announcement. Thank you very much.
Hello, nice to meet you. My name is Kataishi from yutori. The two of them mentioned that their styling has a theme. My theme of my styling is yutori classic. I just named it now. This is the very first time to wear a suit this year. Thank you for giving me the opportunity to wear a suit today. I just want to quickly introduce our company to you.
Paving the first step of the way for brilliant but shy people has always been the mission for us. yutori started with one person's pure love for vintage clothing. We do not have many people with apparel business experience, but we created our business from scratch because we simply loved vintage clothing. It was this intense love for something that shaped who we are. When we express our love, and if that love brings concrete results, you get to love yourself a little more. We are producers who help the brilliant minds develop through our brands. I have always loved clothes, and I have been going to vintage clothing stores. There is a store that I have been going for about 10 years. On the weekdays, I work on clothes, and on the weekends, I go to vintage clothing stores that I have searched on Instagram.
This pure love for fashion, pure love for apparel items, I did not think that that could be a source of business for me. What I am thinking is that it is not the shrewdness or talent that matters. What drives people is passion, and that is what attracts other people, too. What we would like to do is to approach shy but brilliant people, and we would like to serve as their producers through our brands so that they can love themselves a little bit more. Now we operate two media and three brands. So we have "Furugi Joshi," which is a medium, and we also have a virtual model business, which is an IP business. I loved vintage clothing, and then the medium that I created as a hobby became a company and brand. We have three brands now.
9090 with street style of the 1990s, and Spoon embodying relaxed mood of the girls in a cafe, and also Centimeter, themed around American casual vintage clothing. It has only been two years since the launch. In a short period of time, I believe that we have been able to grow rapidly. As far as the sales is concerned, our sales grew 10 times from last year, and the number of followers exceeded 800,000. That was a quick introduction of our company and myself. As I said, we all love clothing, and we have worked to strive, focusing on what we love. We believe that this will create a new movement. I first encountered ZOZO when I was in junior high. ZOZO started a revolution with online sales of clothing.
But for me, it was just a part of everyday life because I am from a young generation, and yutori is a brand that solely focuses on internet. Basically, our main target are the teens and twenteens, and we know how they buy clothing. We have insights for them. The assets that we have is that insight and the know-how. We want to combine the assets and structures of ZOZO with them to create a leading apparel business. We want to do what we love with the people that we love to strive even further. Thank you.
That brings us to the end of the financial results announcement for the first quarter of FY 2020, ending in March. Thank you very much for your attention.