Supplementary Materials for the Second Quarter Financial Results for the Fiscal Year Ending August 2026

Overview of Performance

Although the second quarter of the fiscal year ending August 2026 achieved a record high 2Q net sales, operating income declined due to a reactionary decrease from last year’s large-scale collaboration projects and increased expenses for new initiatives. The karaoke business continued aggressive store openings, with existing stores (excluding collaborations) growing 101.5% year-over-year. Cost ratios were reduced through proper management of labor and utility costs, but fixed cost increases from new POS and E-bo system implementations pressured profits. Real estate management recorded profit growth due to steady income from existing properties and gains from partial business sales. Other businesses posted an operating loss due to closure of bathhouse facilities and opening of Café Éclat, while existing food and beverage stores performed steadily.

Shareholder Returns and Future Outlook

Dividends are planned at 13 yen each for interim and year-end, totaling 26 yen annually, marking a 2 yen increase and the fifth consecutive dividend increase—the highest ever. On November 1, the group absorption-type company split of approximately 70 karaoke stores under the “JOYSOUND” brand was executed, adding 7 billion yen in sales to this fiscal year’s earnings forecast. Profit is expected to gain 200 million yen. The overseas business continues active expansion in Southeast Asia with new store openings in Malaysia and Indonesia. Business expansion and efficiency improvements domestically and internationally will be pursued to achieve full-year performance targets.