Notice of Revision to Earnings Guidance and Recording of Non-operating Expenses

Overview of Revision to Earnings Guidance

Toho Lamac has revised its full-year earnings guidance for the fiscal year ending December 2026. Net sales are expected to fall short of the previous forecast, affected by weak performance in core women's and men's shoe products and increased cost of sales due to a weaker yen. As a result, operating income, ordinary income, and net income attributable to owners of parent have been revised down, and net income per share is now projected to be negative. Crypto asset-related losses are reflected in ordinary income.

Background of the Revision and Breakdown of Non-operating Expenses

Within the shoes business, rubber, sneakers, and other categories remained firm, but women's and men's shoes underperformed. Declining sales and increased cost of sales from the weaker yen depressed operating income, and increases in interest expense, crypto asset valuation losses, and the recording of special investigation costs further worsened ordinary income. Crypto asset valuation losses amounted to 27 million yen for the first half cumulative and 8 million yen for the third quarter cumulative. An amount was recorded as an extraordinary gain for the reversal of reserves for retirement bonuses for officers, but overall the outlook remains below the previous forecast.