Notice Regarding the Recording of Non-operating Income and Extraordinary Loss

Details of Non-operating Income and Extraordinary Loss

In the consolidated financial statements for the fiscal year ending February 2026, a total of 1,821,795 thousand yen was recorded as non-operating income due to foreign exchange gains. Meanwhile, impairment losses totaling 2,023,477 thousand yen were recorded as extraordinary losses on a consolidated basis. In the standalone financial statements, following a decline in performance of consolidated subsidiaries, allowances for doubtful receivables from affiliated companies amounting to 3,096,085 thousand yen, allowances for business losses of affiliated companies totaling 729,267 thousand yen, and valuation loss on investments in affiliated companies of 206,041 thousand yen were recorded as extraordinary losses. These extraordinary losses related to affiliated companies are eliminated in the consolidated statements and do not impact consolidated results.

Impact on Performance and Future Measures

The non-operating income and extraordinary losses described in this document are reflected in the 'Financial Summary for the Fiscal Year Ending February 2026 [Japanese GAAP] (Consolidated)' released on the same day. The recording of foreign exchange gains boosts non-operating income, while impairment losses on unprofitable stores and allowance for doubtful accounts resulting from deteriorating performance of affiliated companies are recorded as extraordinary losses impacting financial results. Investors should consider these factors when evaluating the company's performance.