Notice Regarding the Booking of Extraordinary Loss and Revision of Full-Year Earnings Forecast

Regarding Booking of Extraordinary Loss

In the fourth quarter of the fiscal year ending March 2026, impairment losses of 3,610 million yen will be recorded on domestic and overseas business assets with reduced profitability, along with valuation losses on investment securities of 751 million yen, and a loss on sale of overdue claims of 296 million yen. Additionally, including a fixed asset retirement loss of 2,370 million yen due to renovation and donation of the Xebio Arena Sendai building, a total extraordinary loss of 7,373 million yen is expected.

Revision of Full-Year Earnings Forecast

For the fiscal year ending March 2026, consolidated net sales are revised to 252,377 million yen (down 0.46% from previous forecast), operating income to 2,386 million yen (down 40.60%), ordinary income to 4,669 million yen (down 8.13%), and net income attributable to owners of parent is revised to a loss of 2,141 million yen. While some strength was maintained in the domestic retail business, seasonal products and apparel segments were sluggish due to effects such as a warm winter. On the profit side, decreases in gross profit margin, valuation losses, increased e-commerce system-related expenses, and rises in labor and store expenses negatively impacted results.

Regarding Reduction of Executives’ Compensation

To clarify management responsibility associated with this earnings forecast revision and the booking of extraordinary losses, a measure will be implemented to reduce directors’ monthly compensation by up to 50% for three months, and executive officers’ monthly compensation by up to 30% for three months.