Summary of Financial Results for the First Quarter of Fiscal Year 2024
(Three Months Ended March 31, 2024)[Japanese GAAP]May 10, 2024

Company name: SENSHUKAI CO.,LTD.

Stock exchange: Tokyo Stock Exchange
Stock code:
8165
URL: https://www.senshukai.co.jp
Representative:
Mr. Kenji Kajiwara, President and Representative Director, Executive Officer
Inquiries:
Mr. Tetsuya Takahashi,Managing Executive Officer, General Manager, Corporates Headquarters
Tel: +81-6-6881-3220
Scheduled date of filing of Quarterly Report: May 14, 2024
Scheduled date of payment of dividend: Preparation of supplementary materials for quarterly financial results: None
Holding of quarterly financial results meeting: None
(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the 1st Quarter of 2024 (January 1, 2024 – March 31, 2024)(1) Consolidated operating results (cumulative)(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable toOperating profit
Ordinary profit
owners of parent

Net sales

Millions of yen%

1Q 2024
10,340 (17.3)(1,299)1Q 2023
12,505
4.1(2,200)Note: Comprehensive income (millions of yen) 1Q 2024: (1,154) (-%)

Millions of yen%-

Millions of yen

Net income per share

Diluted net income per share

Yen

Yen

(20.32)(48.84)-

1Q 2024
1Q 2023%

Millions of yen

%

(950)
(2,286)-(1,333)(2,219)1Q 2023: (2,279) (-%)

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

1Q 2024
29,296
16,125
Fiscal Year 2023
31,80917,279Reference: Shareholders’ equity (millions of yen) 1Q 2024: 16,121

Net assets per share
%

Yen

55.0
54.3
Fiscal Year 2023: 17,273

344.62369.15

2. Dividends
1Q-endDividend per share
3Q-end2Q-endYen

Year-end

Total

Yen

Yen

Yen

Yen

Fiscal Year 2023
0.00
Fiscal Year 2024
Fiscal Year 2024 (forecasts)
0.00
Note: Revision to the most recently announced dividend forecast: None

-

0.00

0.00

-

0.00

0.00

3. Consolidated Outlook for Fiscal Year 2024 (January 1, 2024 – December 31, 2024)
Net sales
Millions of yen(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable to
Net income per
Operating profit
Ordinary profit
owners of parent
share% Millions of yen% Millions of yen

Full Year 2024
51,0003.6(1,900)(1,900)Note: Revision to the most recently announced consolidated outlook: None

% Millions of yen

%

Yen

-

-

(38.47)(1,800)* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
(2) Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
Note: Please refer to “2. Quarterly Consolidated Financial Statements and Notes, ( 3) Notes to Quarterly Consolidated
Financial Statements (Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial
Statements)” on page 9 for further information.

(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(4) Number of shares outstanding (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
1Q 2024:

52,056,993 sharesFiscal Year 2023:

52,056,993 sharesFiscal Year 2023:

5,263,634 shares

1Q 2023:

46,820,429 shares

2) Number of treasury shares at the end of the period
1Q 2024:

5,274,891 shares

3) Average number of shares outstanding during the period
1Q 2024:

46,785,783 shares* This quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.
* Cautionary statement with respect to forward-looking statements
The above projections are based on information available at the time of release of this report. Actual results could differ
significantly from these projections due to a variety of factors. For further details regarding the projections, please refer to page3, “1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts andOther Forward-looking Statements.”

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2024

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

2(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income6

Quarterly Consolidated Statement of Income(For the Three-month Period)

6

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)7(3) Notes to Quarterly Consolidated Financial Statements

8(Going Concern Assumption)

8(Significant Changes in Shareholders’ Equity)

9(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements ) 9(Additional Information)

9(Segment Information)

10(Significant Subsequent Events)

11

3. Other

11

Important Matters Regarding Going Concern Assumption, Etc.

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11

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2024

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first quarter (January 1 to March 31) of 2024, the outlook continues to be uncertain. Despite growing
expectations of an end to deflationary conditions due to rising Japanese stock prices and wage rates, concerns remain
about the rapid depreciation of the yen, rising commodity prices against a backdrop of surging global resource prices,and growing geopolitical risks from the situation in Ukraine, the Middle East, and elsewhere.
In this business environment, during the first quarter of 2024, the Group focused on implementing measures under
way since the previous year, which include reforming the mail-order and online shopping business structure,enhancing company-wide sales and profits, and deepening and expanding co-creation. These efforts are steadily
showing results and profitability is improving. However, unstable temperatures in February and March 2024 led toa sluggish performance from seasonal products, resulting in sales falling below the level of the previous first quarter.
As a result, net sales in the first quarter of 2024 decreased 17.3% YoY to 10,340 million yen, operating loss was
1,299 million yen (compared with a loss of 2,200 million yen in the first quarter of 2023), and ordinary loss was
1,333 million yen (compared with a loss of 2,219 million yen in the first quarter of 2023). Loss attributable to ownersof parent was 950 million yen (compared with a loss of 2,286 million yen in the first quarter of 2023).
Business segment performance was as follows.
(Mail-order and Online Shopping Business)
In the mail-order and online shopping business, which focuses on catalogue and online sales, the Group implemented
promotions in the first quarter that combined digital and catalogue sales by subdividing customer segments toimprove sales promotion efficiency. As a result, orders performed well at the beginning of the year and certain
outcomes were achieved. However, unstable temperatures in February and March 2024 led to sluggish sales ofseasonal products, and the gradual downward trend for the number of purchasing members continued. As a result,consolidated sales in the mail-order and online shopping business decreased 20.3% YoY to 8,917 million yen in thefirst quarter of 2024. There was an operating loss of 1,418 million yen compared with a loss of 2,246 million yen in
the first quarter of 2023.
(Corporates Business)
The corporates business, which provides products and services to corporations, made good progress in obtaining
corporate orders for the use of consignment sales projects and agency services such as logistics operations.
Consolidated sales in the corporates business increased 4.7% YoY to 911 million yen in the first quarter of 2024 .
Operating profit was 20 million yen compared with a loss of 27 million yen in the first quarter of 2023.
(Insurance Business)
This business provides support, mainly to Belle Maison members, for choosing the most suitable insurance policies.
Consolidated sales decreased 13.0% YoY to 87 million yen in the first quarter of 2024 and operating profit decreased
47.7% YoY to 23 million yen.
(Others)
Consolidated sales in other businesses, which include the childcare support business, increased 21.1% YoY to 424
million yen in the first quarter of 2024. Operating profit was 74 million yen compared with a profit of 27 million
yen in the first quarter of 2023.
(2) Explanation of Financial Position(Balance sheet position)
Assets totaled 29,296 million yen at the end of the first quarter of 2024, a decrease of 2,513 million yen from theend of 2023.
Current assets decreased 1,844 million yen to 17,056 million yen. The factors included a decrease of 2,423 million
yen in cash and deposits. Non-current assets decreased 668 million yen to 12,240 million yen. The factors included-2-

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2024

decreases of 652 million yen in investments and other assets and 29 million yen in intangible assets, while there wasan increase of 13 million yen in property, plant and equipment.
Current liabilities decreased 1,007 million yen to 10,274 million yen. The factors included a decrease of 1,011
million yen in electronically recorded obligations-operating. Non-current liabilities decreased 351 million yen to2,897 million yen. The main factors included decreases of 178 million yen in other and 120 million yen in long-termborrowings.
Net assets decreased 1,154 million yen to 16,125 million yen. The factors included booking of loss attributable toowners of parent of 950 million yen. As a result, the equity ratio was 55.0%.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
The consolidated forecast for fiscal year 2024 (January 1, 2024 to December 31, 2024) announced on February 13,
2024, indicates that profitability is improving. However, due to unstable temperatures in February and March of2024, sales of seasonal products have stagnated, resulting in sales from Belle Maison, the Group's core mail -orderand online sales business, underperforming those in the previous first quarter. Based on the policy announced on
February 13, 2024, we aim to return to profitability in fiscal 2025 by making steady progress reforming the mailorder and online shopping business structure and shifting to a profit-oriented model as well as diversifying ourbusiness portfolio to create growth areas. At this time, we are maintaining our current fo recasts. If the need to revise
the forecast arises, we will promptly disclose the information.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2024

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)
1Q 2024(As of Mar. 31, 2024)

Fiscal Year 2023
(As of Dec. 31, 2023)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract
assetsMerchandise and finished goods

6,481

4,057

1,562

1,345

6,026

6,829

Accounts receivable-other

3,684

3,472

Other

1,232

1,429

Allowance for doubtful accounts

(86)

(78)

18,90017,056

Buildings and structures, net

3,662

3,621

Land

5,402

5,402

150

204

9,215

9,228

Other

1,142

1,113

Total intangible assets

1,142

1,113

1,719

1,062

Other

831

835

Allowance for doubtful accounts

(0)

(0)

Total investments and other assets

2,550

1,897

12,90812,24031,80929,296

Total current assets
Non-current assets
Property, plant and equipment

Other, net
Total property, plant and equipment
Intangible assets

Investments and other assets
Investment securities

Total non-current assets
Total assets-4-

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2024

(Millions of yen)
1Q 2024(As of Mar. 31, 2024)

Fiscal Year 2023
(As of Dec. 31, 2023)
Liabilities
Current liabilities
Electronically recorded obligations-operating

3,954

2,943

Accounts payable-trade

1,988

2,285

Short-term borrowings

620

620

Income taxes payable32

13

Contract liabilities

627

606

Provision for bonuses

33

184

Other

4,024

3,621

Total current liabilities

11,282

10,274

2,674

2,554

5

5

170

117

Non-current liabilities
Long-term borrowings
Retirement benefit liability
Provision for loss on business closure
Other
Total non-current liabilities
Total liabilities

398

219

3,248

2,897

14,53013,171

Net assets
Shareholders’ equity
Share capital

100

100

Capital surplus

30,08430,084Retained earnings(8,891)(9,841)

Treasury shares(2,953)(2,953)

Total shareholders’ equity

18,33917,388302

13

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

-5-

71

139

(1,516)(1,516)77

97(1,065)(1,266)5

3

17,27916,12531,80929,296SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2024

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income(Quarterly Consolidated Statement of Income)(For the Three-month Period)
1Q 2023(Jan. 1, 2023 – Mar. 31, 2023)(Millions of yen)
1Q 2024(Jan. 1, 2024 – Mar. 31, 2024)

Net sales

12,505

10,340

Cost of sales

6,391

5,053

Gross profit

6,114

5,286

Selling, general and administrative expenses

8,315

6,586

Operating loss

(2,200)(1,299)

1

1

2

1

73

53

Non-operating income
Interest and dividend income
Share of profit of entities accounted for using equity
methodGain on adjustment of accounts payable
Reversal of provision loss on business closure

-

52

Other

113

20

Total non-operating income

189

129

12

10

Foreign exchange losses-

57

Commission expenses

160

95

Non-operating expenses
Interest expenses

Other

34

0

Total non-operating expenses

208

163

(2,219)(1,333)Gain on sale of investment securities

3

352

Total extraordinary income

3352

Loss on sale and retirement of non-current assets

30

Impairment losses

24-

Total extraordinary losses

27

0(2,243)(981)

Ordinary loss
Extraordinary income

Extraordinary losses

Loss before income taxes
Income taxes
Loss
Loss attributable to non-controlling interests
Loss attributable to owners of parent

-6-

49

(27)

(2,293)

(953)

(6)

(2)

(2,286)(950)

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2024

(Quarterly Consolidated Statement of Comprehensive Income)(For the Three-month Period)
1Q 2023(Jan. 1, 2023 – Mar. 31, 2023)(Millions of yen)
1Q 2024(Jan. 1, 2024 – Mar. 31, 2024)(2,293)(953)

Valuation difference on available-for-sale securities

79

(289)

Deferred gains or losses on hedges

Loss
Other comprehensive income

(74)

68

Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method

7

11

0

8

Total other comprehensive income

13

(201)

(2,279)(1,154)(2,273)(1,151)(6)(2)

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests-7-

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2024

(3) Notes to Quarterly Consolidated Financial Statements(Going Concern Assumption)
The Senshukai Group recorded a significant operating loss and loss attributable to owners of parent for two
consecutive years in 2023. In the first quarter of 2024, the Group continued to record a significant operating loss
and loss attributable to owners of parent. These circumstances raise significant doubts about the Group’s ability tocontinue as a going concern. The Group is taking the following measures to resolve this situation.
<Measures to improve results of operations>
A. Reforming the mail-order and online shopping business structure1) Enhancing proposal capability (what and for whom) based on a deep understanding of customer needs
Rather than securing sufficient numbers of models to publish catalogs, we will shift to a product lineup with adeep understanding of customers and a greater awareness of themes and seasons. By concentrating resources onnarrowly focused products, we will enhance our product and proposal capabilities, improve the list price sales
ratio, and enhance gross profit margins.
2) Clarifying and integrating the roles of catalogs and digital media
By analyzing customers’ purchasing behavior, we will design the optimal combination of paper-based (including
catalogs, flyers, and direct mail) and digital measures, leveraging the strengths of each to maximize sales
promotion efficiency. As the e-commerce market grows increasingly challenging, the catalog will be used as a tool
to enable differentiation, mainly in the promotion of sales to existing members, while digital media will be usedefficiently to strengthen SEO (search engine optimization) measures and social media marketing and as a tool for
acquisition of new members and communication.
3) Promoting customer retention and fan engagement
Rather than relying on financial incentives such as discounts and points to encourage purchases, we will strengthen
efforts to build trust and attachment to products and brands.
4) Strengthening outsourced e-commerce mall sales
In response to the trend toward oligopoly among major e-commerce malls, we will review the investment allocation
for in-house and outsourced e-commerce malls to capture sales in growth channels.
B. Enhancing company-wide sales and profits
1) Reducing fixed costs
We will methodically reduce fixed costs by such means as cutting system costs, reducing outsourcing costs, andcancelling leased properties.
2) Reorganizing business sectors
We will ensure enhanced profit and growth by making decisions such as withdrawing from business sectors where
profitability and growth are not anticipated and allocating human resources to targeted areas.
C. Deepening and expanding co-creation
1) Deepening and expanding cooperation with JR East
Leveraging original products for the East Japan Railway Company Group (JR East), we will increase sales at JRE
MALL, expanding physical store openings, and growing projects such as contract logistics for the JR East Group.
2) Deepening and expanding reuse & recycling collaboration centered on Aucnet Inc.
By expanding the range of targeted products for the “kimawari” purchasing service and enhancing its handling
capacity, we aim to acquire new members and increase the retention rate and purchase frequency of existing
members.
3) Strengthening sales of services and experiential products
We will strengthen sales of other companies’ services that can be ordered and purchased on Belle Maison Net, and-8-

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2024

make the site useful in customers’ lives through lifestyle proposals that combine goods, services, and experiences.
4) Strengthening the advertising business
Regarding other companies’ advertising placements on Belle Maison Net, we will develop new options such as
tie-up formats, creating lifestyle proposals that are not limited to our own products and services and increasing
sales and profits.
Regarding funds, as of the end of the first quarter of 2024, the Group possessed cash and deposits totaling 4,057
million yen. We have concluded a commitment line agreement with a financial institution for a total of 6,000
million yen. The term of the agreement expires on March 31, 2025, and enables borrowing for a maximum of six
months from the date of execution. Moreover, a special overdraft agreement of 5,500 million yen (with an expiry
date of January 31, 2025) has been set up as an overdraft facility in the eventuality that the commitment line
agreement cannot be continued. As stated in “2. Quarterly Consolidated Financial Statements and Notes, (3) Notes
to Quarterly Consolidated Financial Statements (Significant Subsequent Events),” the expiry date of the special
overdraft agreement extended to April 30, 2025. As of the end of the first quarter of 2024, there were no outstanding
borrowings under the aforementioned commitment line, or special overdraft agreement. We will continue to work
closely with financial institutions to ensure further support should we need it in the future or when the term ofagreement expire.
However, measures to improve results of operations being undertaken to address significant doubts regarding thegoing concern assumption are currently in progress, and it is possible that the profit and loss and financial benefits
arising from the above-mentioned measures may not be fully realized. The Group recognizes that there issignificant uncertainty regarding the assumption of a going concern as it has yet to determine whether it will beable to procure funds should renewal of the term of agreement or further support from financial institutions berequired.
Furthermore, the consolidated financial statements have been prepared on the assumption that the Group willcontinue as a going concern and do not reflect the impact of significant uncertainties regarding this assumption.
We will continue to respond flexibly to changes in the business environment and implement necessary measuresin a timely manner to achieve profitability in 2025. In the medium- to long-term, we strive to become a company
that is long cherished by customers and meets the expectations of all stakeholders.
(Significant Changes in Shareholders’ Equity)
Not applicable.
(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)(Calculation of tax expense)
Tax expenses are calculated by first determining a reasonable estimate of the effective tax rate after the applicationof tax effect accounting with respect to profit before income taxes for the fiscal year that includes the applicable
quarter and multiplying the profit before income taxes for that quarter by that rate. However, Senshukai uses
legally stipulated effective tax rates to calculate tax expenses when the use of estimated tax rates produces a clearly
irrational result.
(Additional Information)(Uncertainty of accounting estimates)
As of the end of March 2024, the outlook remains uncertain due to the rapid depreciation of the yen, risingcommodity prices against a backdrop of surging global resource prices, and growing geopolitical risks from thesituation in Ukraine, the Middle East, and elsewhere. Senshukai assumes that these factors will have only a limited
effect on accounting estimates. Although Senshukai is using the best possible estimates based on information thatis currently available, a change in the business climate or problems may have an effect on the financial condition,
results of operations and cash flows of the Senshukai Group.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2024

(Segment Information)
I 1Q 2023 (Jan. 1, 2023 – Mar. 31, 2023)
1. Information related to sales and profit or loss for each reportable segment
Reportable segment
Mail-orderand online
shopping
business

Corporates
business

Insurancebusiness

Sub-total

Others(Note 1)

Total

(Millions of yen)Amounts
shown onquarterly
Adjustment consolidated
statement ofincome(Note 2)

Net sales
Sales to11,184870
100
12,155350
12,505
12,505
customers
Inter-segment
sales or
54
10
64
0
64
(64)
transfers
Total
11,238880
100
12,219350
12,569(64)
12,505
Segment profit(2,246)(27)
45(2,228)27(2,200)(2,200)(loss)
Notes: 1. Others represent the businesses which are not included in any of the reportable segments and consist of thechildcare support business.
2. Segment profit (loss) is adjusted to be consistent with the operating loss on the quarterly consolidated statement ofincome.

II 1Q 2024 (Jan. 1, 2024 – Mar. 31, 2024)
1. Information related to sales and profit or loss for each reportable segment
Reportable segment
Mail-orderand online
shopping
business

Corporates
business

Insurancebusiness

Sub-total

Others(Note 1)

Total

(Millions of yen)Amounts
shown onquarterly
Adjustment consolidated
statement ofincome(Note 2)

Net sales
Sales to customers
8,917
911
87
9,916
424
10,34010,340Inter-segment
42
18
60
0
61
(61)
sales or transfers
Total
8,959
929
87
9,977
424
10,401(61)
10,340
Segment profit(1,418)20
23(1,374)74(1,299)(1,299)(loss)
Notes: 1. Others represent the businesses which are not included in any of the reportable segments and consist of thechildcare support business.
2. Segment profit (loss) is adjusted to be consistent with the operating loss on the quarterly consolidated statement ofincome.

- 10 -SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2024

(Significant Subsequent Events)(Renewal of overdraft agreement)
In accordance with a resolution of the Board of Directors’ meeting held on April 26, 2024, Senshukai renewed thecontract period under the special overdraft agreement of 5,500 million yen, which was entered into to prepare forthe eventuality that the commitment line agreement cannot be renewed, as follows:
Lender: Sumitomo Mitsui Banking Corporation
Interest rate: Base rate + spread
Contract signing date: April 30, 2024
Contract maturity date: April 30, 2025
3. Other(Important Matters Regarding Going Concern Assumption, Etc.)
The Senshukai Group recorded a significant operating loss and loss attributable to owners of parent for two
consecutive years in 2023. In the first quarter of 2024, the Group continued to record a significant operating loss
and loss attributable to owners of parent. These circumstances raise significant doubts about the Group’s ability tocontinue as a going concern.
For further details regarding measures to resolve this situation and the going -concern assumption, please refer to“2. Quarterly Consolidated Financial Statements and Notes, (3) Notes to Quarterly Consolidated Financial
Statements (Going Concern Assumption).”* This financial report is solely a translation of summary of “Kessan Tanshin” (in Japanese, including attachments), which ha s
been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience ofreaders who prefer an English translation.

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