Performance Trend 1. Overview of performance for FY3/2024 Consolidated performance for FY3/2024 of G-7 Holdings <7508> was 192,992 million yen in increased operating income of 9.1% over the previous year, and increased ordinary income of 7.4% to 7,318 million yen, and attributed to the parent company's net income of 5,175 million yen, an increase of 35.3% over the previous year. Sales were driven by the Business Supermarket Business and the Meat Business, and continued to set a new record high, exceeding the company's plan by 4.3%. However, in terms of profits, the automobile-related business was affected by a decrease in profits due to poor sales of winter tires due to a warm winter, and could not reach the company's plan, it turned to a profit increase for the second time due to the growth of other businesses centered on the Business Supermarket business. The sales cost ratio has increased by 0.8 points over the previous year due to changes in the sales composition ratio; however, the selling, general and administrative expense ratio decreased by 0.7 points due to the effect of increased earnings, and the operating margin decreased by 0.1 points to 3.6%. The main reasons for the increase/decrease of selling, general and administrative expenses were a decrease of 600 million yen in energy costs due to subsidies from rising electricity prices, and an increase of 1 billion yen in labor costs due to improvements in employee treatment and increased education costs. In addition to this, depreciation expenses increased by nearly 600 million yen due to rising construction material costs and rising costs of opening stores etc. The EBITDA margin has increased by 0.1 points from the previous year. Also, the reason for the large increase in the net income of the parent company's shareholders attributable to the current period is due to the elimination of 500 million yen in retirement benefits paid to executives that were recorded as special losses in the previous year, a decrease of 455 million yen in impairment losses, and a gain of 127 million yen on the sale of investment securities in FY3/2024.

4. Summary of performance for the first quarter of 2025 fiscal year.

Yamano Holdings<7571> announced its consolidated financial results for the first quarter of the 2025 fiscal year (April-June 24) on August 14, 2024. Revenue decreased by 1.9% year-on-year to JPY 3,143 million, operating loss was JPY 204 million (compared to a loss of JPY 157 million in the same period last year), ordinary loss was JPY 209 million (compared to a loss of JPY 158 million in the same period last year), and net loss attributable to shareholders of the parent company for the quarter was JPY 171 million (compared to a loss of JPY 124 million in the same period last year).

The revenue from the beauty business was JPY 481 million (a 0.7% decrease from the same period last year), and the segment profit was JPY 10 million (compared to a segment loss of JPY 1 million in the same period last year). Despite a reduction of four unprofitable stores from the same period last year due to store closures, new customer visits increased and the number of repeat customers also showed improvement. In addition, one store changed its business format in response to changes in the customer base in the area of expansion.

Revenue from the Japanese-style jewelry business was JPY 2,092 million (a 5.8% decrease from the same period last year), and the segment loss was JPY 163 million (compared to a loss of JPY 96 million in the same period last year). The enhancement of kimono maintenance services and the strengthening of customer attraction at exhibitions and sales resulted in a recovery trend in orders. On the other hand, the impact of the closure of two unprofitable stores and delays in product processing and inspection work also affected the business.

Revenue from the DSM business was JPY 187 million (a 9.7% decrease from the same period last year), and the segment loss was JPY 18 million (compared to a loss of JPY 18 million in the same period last year). Despite a still difficult situation due to the aging of salespersons and customers, there was also an impact of consolidation and abolition of bases and a decrease in the number of salespersons.

Revenue from the education business was JPY 305 million (a 47.8% increase from the same period last year), and the segment loss was JPY 10 million (compared to a loss of JPY 14 million in the same period last year). Continuing to thrive were the one-to-one academy and Tokyo guidance. In addition, Toshogakusha, a third educational company to join the group, contributed from the beginning of the period.

Revenue from other businesses was JPY 76 million (a 6.5% decrease from the same period last year), and the segment loss was JPY 7 million (compared to a loss of JPY 20 million in the same period last year). There was an impact of the revenue decline of OLD FLIP, which operates the reuse business.

Regarding the 2025 fiscal year, which is the first year of the medium-term management plan announced in May 2024, measures toward the initial plan of "becoming profitable and recovering V-shaped profits" are progressing as planned. For this first quarter, we worked on unprofitable store consolidation and strengthening the acquisition of new customers, and strengthened the operation structure toward profit recovery from the second quarter onwards.

(Author: FISCO Guest Analyst Shuji Matsumoto)