Supplementary Explanation Material for the Financial Summary for Q1 of the Fiscal Year Ending August 2026

Overview of Performance

In Q1 of the fiscal year ending August 2026, net sales amounted to 7,966 million yen (YoY 112.1%), operating income was 1,826 million yen (YoY 118.3%), and net income attributable to owners of parent was 1,222 million yen (YoY 117.0%). These figures all represent record highs for a first quarter in terms of sales, profits, and profit margins. The main driver of the improved profit margin was the strong performance of the high-margin DtoC site sales. By product category, sales growth was supported by expansion in entertainment (IP) and fan activity demand, as well as the acquisition of large-scale projects across all product categories.

Factors behind the Increase in Selling, General and Administrative Expenses and Future Outlook

Selling, general and administrative expenses rose to 1,355 million yen, a 107.6% increase YoY, primarily due to higher personnel costs, increased sales-linked expenses, and rising expenses for web advertising initiatives aimed at expanding e-commerce sales. To mitigate foreign exchange risks, we have implemented forward contracts to stabilize profit margins, strengthened price negotiations with overseas suppliers, and enacted appropriate price increases. These measures have contributed to a smooth start toward achieving the full-year earnings forecast. Dividends are planned at 30.0 yen per share, marking the 15th consecutive year of dividend increases.