For the Nine Months of Fiscal Year Ending March 31, 2024

Financial Results Briefing

2024.02.07 UNITED ARROWS LTD.

1

P04 – P26

Table of Contents

P27 – P37

P38 – P40

P41 – P42

P43 – P47

| 01

Overview of FY24/3 3Q Business Results| 02 Major Initiatives in FY24/3 3Q of theMedium-Term Management Plan
| 03 Progress in Sustainability Initiatives| 04 Message from Yoshinori Matsuzaki,
Representative Director, President,
and CEO| 05 Reference Materials

2Cautionary Statement
Earnings forecasts and descriptions other than objective facts contained in this document are basedon decisions made by UNITED ARROWS LTD. in light of information obtainable as of the date of thisreport and, therefore, include risks and uncertainties. Actual earnings may differ materially fromforecasts due to global economic trends, market conditions and other factors. Investors are asked torefrain from making investment decisions based solely on the information contained in thisdocument.

Use of Abbreviations
Abbreviations may be used for the following businesses/store brands:
UNITED ARROWSUA

BEAUTY&YOUTH UNITED ARROWS

BY/BEAUTY&YOUTH

UNITED ARROWS green label relaxing

GLR/green label relaxing

Trend-conscious Market and Basic Trend-conscious Market includes the following store brands:
Trend-conscious Market
UA, BY, DRAWER, Odette e Odile, BLAMINK, ROKU, and STEVEN ALAN
Basic Trend-conscious Market
GLR, and CITEN

Click here for Shared
Research Inc. research
report.

PAGE | 33

01
Overview of FY24/3 3Q Business Results

PAGE | 44

01 Overview of FY24/3 3Q Business Results

Consolidated Although sales cleared the previous year's level and gross margin wasmaintained at the same level as the previous year, operating income andother profits decreased due to an increase in SGA expenses
Consolidated sales¥99.7billion
YoY
103.8%

Gross margin

Operating income

Net income¥5.8billion¥4.2 billion

YoY

YoY

91.1%

98.0%

52.7%
Same level as last year•

Despite struggling in the third quarter due to the effects of the warm winter, sales increased due to normalizationof economic activity and recovery in inbound tourism•

Gross margin for the nine months recovered to the FY19/3 level•

The SGA expenses to sales ratio worsened due to increased advertising expenses and personnel expenses, andall profits below operating income decreased
PAGE | 55

01 Overview of FY24/3 3Q Business Results

Consolidated Gross Margin
FY24/3YoY
9M pt difference• Consolidated gross margin remained thesame level as the previous year
• UA LTD. improved by 0.1pt from the previous
year. Although the total business unit wasaffected by higher costs for spring products

and expanded discount sales in fall andwinter, outlet sales improved significantly• COEN CO., LTD. saw a decline from theprevious year, due to increased discountprice sales

Consolidated

52.7%

0.0pt

UNITED ARROWS LTD.

52.5%

0.1pt

Total business unit sales--0.3ptOutlet, etc.

-

4.7pt

COEN CO., LTD.

--1.9pt

UNITED ARROWS TAIWAN LTD.

-

3.8pt

PAGE | 66

01 Overview of FY24/3 3Q Business Results

Consolidated SGA Expenses(Millions of yen)

• Consolidated SGA expenses were ¥46,761 million,
105.7% YoY, and vs. sales were 46.9%, up 0.9 pt YoY

Total SGA expenses
vs. sales• Advertising expenses include impact of one-time

Advertising expenses

costs associated with transfer to the “UA Club”
system at UA LTD.

vs. sales

Personnel expenses
vs. sales• Personnel expenses were affected by increases in

Rent

personnel, wage increases, etc.
• Rent decreased mainly due to the store closure of
COEN CO., LTD.
• Other increases were due to increases in UA online

vs. sales

Depreciation
vs. sales

Other
vs. sales

Change/pt

FY23/3 9M

FY24/3 9M

44,247

46,761

2,514

46.0%

46.9%

0.9pt

-

2,124

2,852

727

134.3%

2.2%

2.9%

0.6pt

-

15,42916,000571

103.7%

difference

YoY

105.7%

16.1%

16.0%

- 0.0pt-

13,686

13,644

(41)

99.7%

14.2%

13.7%

- 0.6pt

653

647

(5)

0.7%

0.6%

- 0.0pt-

12,353

13,6151,261

110.2%

12.9%

13.7%

0.8pt

-

99.2%

sales and variable costs

PAGE | 77

01 Overview of FY24/3 3Q Business Results

Non-consolidated

Non-consolidated sales

Sales exceeded the previous year, gross margin also improved
from the previous year, and the negative number of customers
purchasing at existing stores improved by 0.8 percentage points
from the first half
Gross margin

Operating income¥92.2billion

52.5%¥6.1billion

YoY

YoY diff.

YoY

105.1%+0.1pt94.4%

Existing stores YoY
Sales
Number ofpurchasing
customers

Avg. spend
per customer

106.2%
99.5%
107.4%•

Sales were driven by the Trend-conscious Market centered on UA and BY, and sales surpassed the previous year•

SGA expenses include one-time costs (¥390 million) associated with changes in the membership program that occurred in
the second quarter•

While maintaining the increase in avg. spend per customer, the negative number of customers purchasing at existing stores
was reduced from the previous year to 0.5% (0.8pt improvement from the first half result)
PAGE | 88

01 Overview of FY24/3 3Q Business Results

Non-consolidated by channel: As retail sales continued to improve, online
sales also exceeded the previous year
• Both retail and online sales improved from the(Millions of yen)previous year, the composition ratio of theonline sales was 24.5% of the total, almost thesame level as the previous year
• UA online sales were 112.9% of the previous
year, the composition ratio in the total online
sales was 37.4% (YoY diff. +2.2 pts)
• The total sales at other companies’ sites were
102.5% of the previous year
• Sales to inbound tourists were 3.7 times theprevious year, with a composition ratio of 2.9%

Non-consolidated
sales
Total business unit sales
vs. sales

RetailFY2023

FY2024

Change/pt

9M

9M

difference

87,81692,286

4,469

105.1%

72,98077,938

4,957

106.8%

82.3%

82.7%

0.4pt

-

49,90153,362

3,461

106.9%

YoY

56.3%

56.6%

0.3pt

-

21,78323,1301,347

106.2%

vs. sales

24.6%

24.5%

- 0.0pt-

Other (Wholesale, etc.)

1,295

1,445

149

111.5%

vs. sales

Onlinevs. sales

Outlet, etc.
vs. sales

1.5%

1.5%

0.1pt

-

15,692

16,312620

104.0%

17.7%

17.3%

- 0.4pt-(YoY diff. +2.1 pts)
PAGE | 99

01 Overview of FY24/3 3Q Business Results

Non-consolidated By business: Trend-conscious Market remained strong• Trend-conscious Market centered on UA and(Millions of yen)

BY continue to grow due to recovery in urban
areas, recovery in inbound tourism, etc.
• Both markets exceeded the previous year
and existing store sales also surpassed the

FY2023 9M

FY2024 9M

ChangeYoY

72,98077,938

4,957

106.8%

Trend-conscious Market

48,44752,642

4,195

108.7%

Basic Trend-conscious Market

24,53325,295762

103.1%

Total business unit sales

previous year
• The challenge is the Basic Trend-conscious

Existing store sales YoY
Retail +Market centered on GLR, and we aim to
improve it from spring/summer

OnlineRetailOnlineTrend-conscious Market

109.3%

109.8%

108.0%

Basic Trend-conscious Market

100.4%

101.5%

98.4%

PAGE | 1010

01 Overview of FY24/3 3Q Business Results

Non-consolidated Gross margin continues to improve• Recovered to 52.5%, the highest level since FY16/3, and approximately 53% excluding the impact of the change inrevenue recognition standards• Although the negative impact of higher costs remains in Business Units, improvements continue in Outlets andothers due to inventory optimization
FY24/3YoY
9M pt difference
UNITED ARROWS LTD.
Excluding the impact of the change
in revenue recognition standards

52.5%

0.1pt

51.8%

51.7%

52.1%

52.3%

52.4%

52.1%

52.5%

50.8%

53.2%

Total business unit sales--0.3ptOutlet, etc.

-

4.7pt

45.5%

FY16/9M

FY17/9M

FY18/9M

FY19/9M

FY20/9M

FY21/9M

FY22/9M

FY23/9M

FY24/9M

Non-consolidated Gross margin for 9-month period

PAGE | 1111

01 Overview of FY24/3 3Q Business Results

Financial impact of transition to UA Club

Convert old “points” held bymembers to “miles” whentransferring to UA ClubDue to the difference in the
return rates, the amountincreases when converted
miles are converted to oldpointsAssuming future use of theincrease, a portion of theincrease was lumped into thesecond quarter of FY24/3, assales promotion expenses toreserve future discounts

The increased amount will berecorded as a sales discountfrom September 2023 onwards

Financial impact after September 2023
Sales YoY

About -1.3 to -1.4 pts

Gross margin

About -0.1 pt* Based on current mileage usage estimates, this impact is expected to end by the end of March 2024

PAGE | 12

After the last financial results briefing, we received many questions about the one-time costs associatedwith the transition to the UA Club membership system, so I would like to explain.
In August 2023, when we transitioned our membership system to UA Club, we converted unused points
held by customers from the previous program into miles and re-granted them. Due to the difference in the
return rate between the two systems, the conversion to miles increased the amount in terms of the oldpoints.
Assuming that this increased amount will be used in the future, a portion of the amount was accounted forin one lump sum as sales promotion expenses in the second quarter of 2024 for future discounts. From
September onwards, sales are recorded as sales discount in accordance with the usage of the increased
amount.
This treatment has had a negative impact of about 1.3 to 1.4 points on year-on-year sales since September,and a negative impact of about 0.1 point on gross margin. This is the main reason why there is a large
discrepancy in sales year-on-year between the preliminary and final monthly overviews. Based on current
usage conditions, this impact is expected to end by the end of March 2024.

12

01 Overview of FY24/3 3Q Business Results

Selected as a “DX Certified Business Operator” by the Ministry of
Economy, Trade and Industry
Certified as ready for DX promotion in compliance with the basic mattersof the “Digital Governance Code”
Our initiatives for DX
April 2021

Established DX Promotion Center*2 with the aim of establishing a business model for the OMO*1 era

May 2023

Promoting various DX strategies with the “UA DIGITAL Strategy” set as one of the main strategies of
the “Medium-term Management Plan 2023-2025”

August 2023

Renewed our membership program and launched a new program using the app, “UA Club”,
updated content to increase customer lifetime value

October 2023

Established the “DX Sales Master” system to evaluate specialists who demonstrate excellent
performance in sales-related DX activities

Currently

We are in the process of renewing our core product management system and creating a system todigitalize product procurement with the aim of optimizing our supply chain*1 Online Merges with Offline*2 Renamed “DX Promotion Office” in April 2023

PAGE | 13

In February 2024, we were certified as a “DX (digital transformation) Certified Business Operator” by the
Ministry of Economy, Trade and Industry. The DX certification system is a certification system based on
the “Act on Facilitation of Information Processing”. It’s a system where the government certifies
businesses as being ready to promote DX, in response to the basic matters of the “Digital GovernanceCode” that summarizes the requirements of managers for social transformation through digitaltechnology.
Our various DX initiatives met the certification standards based on the Ministry of Economy, Trade andIndustry's DX promotion indicators, and we were recognized for appropriately disclosing information to
stakeholders, which led us to obtaining certification.

13

01 Overview of FY24/3 3Q Business Results

Consolidated P/L

PAGE | 14

Sales were ¥99,704 million, 103.8% YoY.
Gross profit was ¥52,578 million, 103.8% YoY and vs. sales was 52.7%, same level as the previous year.
SGA expenses were ¥46,761 million, 105.7% YoY, and vs. sales was 46.9%, up 0.9 pts YoY.
Operating income was ¥5,817 million, 91.1% YoY and vs. sales was 5.8%, down 0.8 pts YoY.
Ordinary income was ¥6,359 million, 94.5% YoY and vs. sales was 6.4%, down 0.6 pts YoY.
Net income attributable to owners of parent was ¥4,253 million, 98.0% YoY and vs. sales was 4.3%,
down 0.3 pts YoY.
Although sales and gross profit exceeded the previous year's level, SGA expenses increased due toincreases in advertising expenses and personnel expenses, and all profits below operating income
decreased.

14

01 Overview of FY24/3 3Q Business Results

Consolidated P/L 3Q (3 months)

PAGE | 1515

01 Overview of FY24/3 3Q Business Results

Consolidated Gross margin
FY24/3YoY
9M pt difference
Consolidated

52.7%

0.0pt

UNITED ARROWS LTD.

52.5%

0.1pt

Total business unit sales--0.3ptOutlet, etc.

-

4.7pt

COEN CO., LTD.

--1.9pt

UNITED ARROWS TAIWAN LTD.

-

3.8pt

PAGE | 16

Consolidated gross margin was 52.7%, unchanged from a year ago.
Gross margin of UA LTD. (the Company) was 52.5%, up 0.1 pt from the previous year.
Total Business Unit sales decreased 0.3 points for the 9-month period because of the impact of higher
costs of spring items due to exchange rate fluctuations and the impact of expanded fall/winter discountprice sales.
Outlets improved from the previous year due to the reduction in the size of past year's inventory throughbetter inventory efficiency.
COEN CO., LTD. fell 1.9 pts from the previous year due to expansion of discount price sales.
The Taiwanese subsidiary improved 3.8 pts.

16

01 Overview of FY24/3 3Q Business Results

Consolidated Gross Margin 3Q (3 months)
FY24/3 3Q

YoY
pt difference

Consolidated

53.2%-0.6pt

UNITED ARROWS LTD.

53.1%

-0.7ptTotal business unit sales--0.3ptOutlet, etc.

-

1.7pt

COEN CO., LTD.

-

-0.5pt

UNITED ARROWS TAIWAN LTD.

-

5.3pt

PAGE | 1717

01 Overview of FY24/3 3Q Business Results

Consolidated SGA Expenses(Millions of yen)

Total SGA expenses
vs. sales

Advertising expenses

FY23/3 9M

FY24/3 9M

44,247

46,761

2,514

105.7%

46.0%

46.9%

0.9pt

-

2,124

2,852

727

134.3%

2.2%

2.9%

0.6pt

-

15,42916,000571

103.7%

vs. sales

Personnel expenses

Change/pt
difference

YoY

16.1%

16.0%

- 0.0pt-

13,686

13,644

(41)

99.7%

vs. sales

14.2%

13.7%

- 0.6pt

653

647

(5)

99.2%

vs. sales

0.7%

0.6%

- 0.0pt-

12,353

13,6151,261

110.2%

12.9%

13.7%

0.8pt

-

vs. sales

Rent

Depreciation

Other
vs. sales

PAGE | 18

The amount and rate of SGA expenses are as explained earlier.
Vs. sales was 46.9%, up 0.9 pts from the previous year.
Advertising expenses were ¥2,852 million, 134.3% YoY, and vs. sales was 2.9%, up 0.6 pts YoY, mainly due
to an increase in advertising costs, in addition to the one-time costs associated with changes in themembership program to transfer to “UA Club”.
Personnel expenses were ¥16,000 million, up 103.7% YoY, due to an increase in full-time personnel
expenses.
Rent was ¥13,644 million, 99.7% YoY, mainly due to a decrease because of the store closure of COEN CO.,LTD., as well as a decrease in warehouse rent resulting from inventory reduction, despite an increase incommission rent caused by the recovery of physical stores. Vs. sales decreased 0.6 pts from the previous
year.
Other was ¥13,615 million, 110.2% YoY, including an increase in variable costs by recovery of sales and anincrease in related costs associated with increased UA online sales.

18

01 Overview of FY24/3 3Q Business Results

Consolidated SGA Expenses 3Q (3 months)(Millions of yen)

Total SGA expenses
vs. sales

Advertising expenses
vs. sales

Personnel expenses
vs. sales

Rent
vs. sales

Depreciation
vs. sales

Other
vs. sales

Change/pt

FY23/3 3Q

FY24/3 3Q

15,780

16,543

763

40.8%

42.8%

1.9pt

-

829

924

94

111.4%

2.1%

2.4%

0.2pt

-

5,153

5,518

365

107.1%

13.3%

14.3%

0.9pt

-

5,088

4,988

(100)

98.0%

13.2%

12.9%

- 0.3pt

217

222

5

difference

YoY

104.8%

102.4%

0.6%

0.6%

0.0pt

-

4,491

4,889

398

108.9%

11.6%

12.6%

1.0pt

PAGE | 1919

01 Overview of FY24/3 3Q Business Results

Non-consolidated Sales by Channel(Millions of yen)

FY2023

FY2024

Change/pt

9M

9M

difference

Non-consolidated sales

87,81692,286

4,469

105.1%

Total business unit sales

72,98077,938

4,957

106.8%

82.3%

82.7%

0.4pt

-

49,90153,362

3,461

106.9%

vs. sales

Retailvs. sales

Onlinevs. sales

Other (Wholesale, etc.)

56.3%

56.6%

0.3pt

-

21,78323,1301,347

106.2%

24.6%

24.5%

- 0.0pt

-

1,295

1,445

149

111.5%

1.5%

1.5%

0.1pt

-

15,692

16,312620

104.0%

17.7%

17.3%

- 0.4pt-

Number of

Avg. spend

vs. sales

Outlet, etc.
vs. sales

YoY

Existing stores YoY
Salescustomers per customer

Retail + Online

106.2%

99.5%

Retail107.1%

100.7%

107.4%
106.3%

Online104.4%

97.4%

109.2%

PAGE | 20

Non-consolidated sales were ¥92,286 million, 105.1% YoY,
Total Business Unit sales were ¥77,938 million, 106.8% YoY.
Retails sales were ¥53,362 million, 106.9% YoY.
Online sales were ¥23,130 million, 106.2% YoY, and vs. sales was 24.5%. UA online sales remained
strong at 112.9% YoY, and came to account for 37.4% of the total online sales (up 2.2 pts from theprevious year).
For year-on-year existing store sales, both retail and online exceeded the previous year's level, retail +online was 106.2%, and the year-on-year decrease in the number of customers purchasing at existing
stores narrowed to 0.5%. Avg. spend per customer increased 7.4% from the previous year due tocontrolling measures for discount price sales and price review.
Outlet, etc. was ¥16,312 million, 104.0% YoY, and vs. sales was 17.3%.

20

01 Overview of FY24/3 3Q Business Results

Non-consolidated Sales by Business(Millions of yen)

FY2023 9M

FY2024 9M

Change72,98077,938

4,957

106.8%

Trend-conscious Market

48,44752,642

4,195

108.7%

Basic Trend-conscious Market

24,53325,295762

103.1%

Total business unit sales

YoY

Existing store sales YoY
Retail +OnlineRetailOnlineTrend-conscious Market

109.3%

109.8%

108.0%

Basic Trend-conscious Market

100.4%

101.5%

98.4%

PAGE | 21

The Trend-conscious Market centered on UA and BY continued strong performance due torecovery in urban areas, recovery in inbound tourism, etc. Sales were ¥52,642 million, 108.7% YoY.
The Basic Trend-conscious Market centered on GLR had sales of ¥25,295 million, 103.1% YoY.
In both markets, existing store sales for retail + online exceeded the previous year’s level.

21

01 Overview of FY24/3 3Q Business Results

Consolidated BS

PAGE | 22

Total assets were ¥60,316 million, 98.6% compared with the end of the previous period
Current assets were ¥40,881 million, 98.3% from the end of previous period
This was due to a decrease in cash and deposits, and increases in merchandise, supplies, and accounts
receivable-other.
Noncurrent assets were ¥19,434 million, 99.3% compared with the end of the previous period. This wasdue to an increase in property, plant and equipment associated with the opening of stores, an increase
in intangible fixed assets as a result of preparations for core system renovations, a decrease inguarantee deposits due to the closing of stores, and a decrease in deferred tax assets.
Current liabilities were ¥21,717 million, 92.6% compared with the end of the previous period. This was due
to increases in notes and accounts payable-trade and other current liabilities, and decreases in shortterm loans payable, accounts payable-other, income taxes payable, and provision for bonuses.
Noncurrent liabilities were ¥4,159 million, 103.2% compared with the end of the previous period. This wasdue to an increase in asset retirement obligations associated with store openings.
Total net assets were ¥34,438 million, 102.2% compared with the end of the previous period. This wasdue to an increase in retained earnings and a decrease by payment of dividends and the acquisition oftreasury stock.
Balance of short- and long-term loans payable was ¥2,198 million, 87.8% compared with the end of theprevious period.
Inventory totaled ¥22,833 million, 97.5% compared with the 3Q-end of the previous fiscal year. It was
lower than sales growth (103.8%), and inventory efficiency is progressing.

22

01 Overview of FY24/3 3Q Business Results

Consolidated CF(Millions of yen)

FY23/3 9M

FY24/3 9M

Cash flows from operating activities(sub-total)

4,432

2,558

Cash flows from operating activities

3,827

911

Major breakdown of the results for the term

Income before income taxes

Cash flows from investing activities(1,792)(2,545)(1,378)

Increase in trade receivables(2,592)

Increase in inventories(2,193)Purchase of property, plant and equipment(880)

Purchase of intangible fixed assets(1,366)

Purchase of long-term prepaid expenses

Cash flows from financing activities

Cash and cash equivalents
at the end of the period(3,075)4,420(3,744)

6,118

Decrease in provision for bonuses

Decrease in short-term loans payable

(321)
(306)

Purchase of treasury shares(2,000)

Dividends paid

(1,433)

3,104
PAGE | 23

Cash flows from operating activities led to an increase in cash of ¥911 million, cash flows from investing
activities reduced cash by ¥2,545 million, cash flows from financing activities led to a decrease in cash of¥3,744 million, and cash and cash equivalents were ¥3,104 million.
The main breakdown of each item is as shown on the slide.

23

01 Overview of FY24/3 3Q Business Results

COEN CO., LTD.
February - OctoberSaw decrease in both revenue and income• Sales were ¥6.8 billion, 89.4% YoY• Both sales and gross margin were lower than the previous year, and despite efforts tosuppress SGA expenses, both revenue and income decreased• Although physical stores are on a recovery trend, online sales continue to slow down
• Refine the MD from fall/winter and aim for improvements from spring/summer onwards

UNITED ARROWSTAIWAN LTD.
February - October

Saw increase in revenue and decrease in income• Sales were ¥1.1 billion, 109.8% YoY• Sales and gross margin exceeded the previous year
• Profit decreased due to SGA expenses increased by growth investments such as
CITEN limited-time stores

PAGE | 24

24

01 Overview of FY24/3 3Q Business Results

Opening and Closing of Stores
Results for 9-month period

Opened 9

Closed 6

Full-year forecast

Opened 12 Closed 9

No. of stores at the 3Q end 301
No. of stores at the period-end 301

Results for 9-month period
No. of stores atthe previous

OpenedClosedperiod end

Full-year forecast

No. of stores atthe 3Q end

No. of stores at

OpenedClosedthe period end(forecast)

298

9

6

301

12

9

301

UNITED ARROWS LTD.

215

8

3

220

11

5

221

COEN CO., LTD.

75

0

3

72

0

4

71

UNITED ARROWS TAIWAN LTD.

8

1

0

9

1

0

9

Total Group

PAGE | 25

25

01 Overview of FY24/3 3Q Business Results

UA LTD. Retail Stores Opened/Closed
Results for 9-month period
No. of stores atthe previous

OpenedClosedperiod end

Full-year forecast

No. of stores atthe 3Q end

No. of stores at

OpenedClosedthe period end(forecast)

215

8

3

220

11

5

221

104

1

2

103

3

4

103

14

0

0

14

0

0

14

UNITED ARROWS

24

1

0

25

2

1

25

BEAUTY&YOUTH

37

0

1

36

1

2

36

Other

29

0

1

28

0

1

28

85

6

1

90

7

1

91

84

2

1

85

2

1

85

Other

1

4

0

5

5

0

6

Outlet

26

1

0

27

1

0

27

UNITED ARROWS LTD. Total
Trend-conscious Market Total
UNITED ARROWS(General Merchandise Store)

Basic Trend-conscious Market Total
Green label relaxing*STEVEN ALAN OSAKA is recognized as an annex to each BY store and not included in the number of stores above.

PAGE | 2626

02
Major Initiatives in FY24/3 3Q ofthe Medium-Term Management Plan

PAGE | 2727

02 Major Initiatives in FY24/3 3Q of the Medium-Term Management PlanThree Key Strategies

Strategy

Strategy• Grow and expand existing • Brand development forbusinesses
business expansion
Top-line growth• Global expansion

Strategy• Promote OMO• Optimize the supply chain

Improvement of gross margin• Strengthen brand appeal
Expansion of investment in
human capital
Rebranding of the corporate brand• Re-grow COEN

PAGE | 2828

02 Major Initiatives in FY24/3 3Q of the Medium-Term Management Plan

UA CREATIVITY Strategy: Strengthen brand power - Expansion of investment in human capital

Improve employee engagement
Goal

Significantly improved employee engagement score *1•

The positive response rate increased for each motivational factor•

Based on the results of an employee awareness survey,
investment distribution to measures that have a high impact
on eNPS *2 contributed•

Major measures for the FY24/3

80.02023 survey

74.5%(Sense of accomplishment, recognition, work itself, delegation of authority,
satisfaction with evaluation, and sense of growth)

Up 4.5pts

69.8

70.0

- Expansion of educational opportunities- Dissemination of Company policies- Creating opportunities for dialogue with management

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Employee Engagement Score Trend (%)
From the employee awareness survey by UA LTD.
*1 Employee engagement scores
Average positive response rate for motivational factors*2 eNPS
Employee version “Net Promoter Score"; value indicating the degree ofattachment and trust in the workplace

PAGE | 29

As a result of the employee awareness survey conducted in 2023, the employee engagement index
was 74.5%, an increase of 4.5 pts from the previous year.
The engagement index refers to the average percentage of positive responses to the motivational
factors of the employee awareness survey questions: Sense of accomplishment in work, recognition,
work itself, delegation of authority, satisfaction with evaluation, and sense of growth. In this survey,
all of these items have improved from the previous year.
Based on the results of the annual employee awareness survey, the Human Resources Division
extracts items that have a high impact on eNPS, the employee version of NPS, and reflects them in thefollowing year's personnel measures. This fiscal year, we have focused on expanding educational
opportunities, disseminating company policies, and creating opportunities for dialogue withmanagement, and we believe that these efforts have led to increased engagement.
We will also analyze the 2023 survey and reflect it in next term's personnel measures. As stated in our
long-term sustainability goals, we plan to increase this index to 80% by 2030.

29

02 Major Initiatives in FY24/3 3Q of the Medium-Term Management Plan

UA CREATIVITY Strategy: Strengthen brand power - Expansion of investment in human capital

Generation Z ranked UA LTD. No.1 with high scores for “mutual respectamong employees” *1
Favorable evaluation factor- A culture where employees' intentions are respected- Actively implement initiatives related to social contribution
activities- Implementation of multifaceted evaluation of managers- Conducting employee awareness surveys, etc.
“There is a culture of respecting and accepting the values of others
before presenting our own ideas, so we can grow in terms of changing
the way we perceive things and our thinking.”(Retail, less than 3 years of employment, current position (at time of response), newgraduate, male, UNITED ARROWS)

Quote: “OpenWork” employee reviews*1 OpenWork Inc.'s own research

PAGE | 30

In OpenWork Inc.'s own research conducted in December 2023, UA LTD. was ranked No. 1 with highscores for “mutual respect among employees” as evaluated by Generation Z.
According to OpenWork’s materials, as the favorable evaluation factor for us, the following items are
mentioned: A culture where employees' intentions are respected, active implementation of initiatives
related to social contribution activities, implementation of multifaceted evaluation of managers, andimplementation of employee awareness survey.
Looking at employee reviews posted OpenWork, there are positive evaluations of our culture, as shownin the slide.
We believe that securing excellent Generation Z talent is an important initiative for our future growth,and we would like to maintain this reputation.

30

02 Major Initiatives in FY24/3 3Q of the Medium-Term Management PlanThree Key Strategies

Strategy

Strategy• Grow and expand existing • Brand development forbusinesses
business expansion
Top-line growth• Global expansion

Strategy• Promote OMO• Optimize the supply chain

Improvement of gross margin• Strengthen brand appeal
Expansion of investment
in human capital
Rebranding of the corporate brand• Re-grow COEN

PAGE | 31

31

02 Major Initiatives in FY24/3 3Q of the Medium-Term Management Plan

The UA MULTI Strategy: Brand development for business expansion

Aiming to expand business by responding to challenges to achieve
long-term vision
Issue along the Age Axis

Issue along the Brand Axis

Issue in terms of business

Main customers are those in the 30s to
40s, with the potential to expand into the
20s

Main businesses are concentrated on traditional,
conservative tastes. There is room to expand inother tastes including casual and mode

• Business domains are mostly fashion,and domestic• There is room to expand value provided
to food, clothing, and living towardmaking lifestyle proposals• Overseas business is currently limited
to Taiwan, with room for expansion,
including entry into China and others

PAGE | 32

We would like to introduce new initiatives that have been decided at this point, as part of the UA MULTI
strategy and brand development aimed at business expansion.
The new initiatives address three of the four challenges to achieving the long-term vision: age-based
issues, challenges related to fashion taste, and challenges in business scope. Through this initiative,
we will access domains other than fashion to extend the width of proposals to customers’ lifestyles, inaddition to expanding the customer base by extending age groups and fashion tastes.

32

02 Major Initiatives in FY24/3 3Q of the Medium-Term Management Plan

The UA MULTI Strategy: Brand development for business expansion

Launch of “ATTISESSION”, a women's brand aimed at the MZ generation*
Expand customer base to MZ generation• Team formation selected from next-generation in-house members such as director, MD, PR, etc.
• Sales starts in some BY stores and the UA online from April 2024, with a plan to open physical storeswithin the next fiscal year
Director: Nanaka Yotsuya
Born in 1998, aged 25. Born in Ishikawa Prefecture. After
graduating from the Fashion Marketing and Distribution
Department of Bunka Fashion College, joined UA LTD. in
2020. Engaged in sales work at the UNITED ARROWS
Shibuya Scramble Square, worked on product planning for
the web-only line within BY brand from spring/summer
2022, and transferred to the BY Product Department inJune 2023.
Instagram: https://www.instagram.com/7k0512/* Generation MZ: Millennials, Generation Z, generations born between the mid-1980s and early 2000s (early 20s to late 30s)

PAGE | 33

A new women's brand “ATTISESSION” will be launched in April 2024. This is a brand that focuses on
casual lines aimed at millennials and Generation Z and is very different from traditional fashion andconservative tastes that are usually seen. In order to respond to the sensibilities of the target audience,
we will proceed with a team consisting of in-house members of the next generation, including directors,
MD, and PR. Sales will begin at some BY stores and the UA online, and we plan to open a physical store
within the next fiscal year. We expect to have multiple stores in the future.

33

02 Major Initiatives in FY24/3 3Q of the Medium-Term Management Plan

The UA MULTI Strategy: Brand development for business expansion

Launch of “ATTISESSION”, a women's brand aimed at the MZ generation
Taste and pricing that resonates with the target generation
Main products and price ranges
Tops¥7,000 - ¥18,000

Shirts¥12,000 - ¥25,000

Bottoms¥13,000 - ¥24,000

Jackets¥22,000 - ¥39,000

Outerwear¥25,000 - ¥70,000

Instagram
https://www.instagram.com/attisession/
2024SS Image Visual

PAGE | 34

As you can see from the 2024 spring/summer image visuals, we are moving away from traditionaland conservative styles to create a taste that resonates with the target generation. The pricerange was also set with this group in mind.

34

02 Major Initiatives in FY24/3 3Q of the Medium-Term Management Plan

The UA MULTI Strategy: Brand development for business expansion

Launched UNITED ARROWS BEAUTY, a cosmetics brand for millennials
Leveraging UA brand name recognition to advance into the cosmetics market• Available in a total of 6 items including BB cream, serum, color shampoo, etc.
• Expanding sales channels through Rakuten Ichiba, Amazon and ZOZOTOWN, besides our selected
physical stores and the UA online• Reliably reach the target audience through PR methods such as the use of influencers

PAGE | 35

Sales of the cosmetic brand “UNITED ARROWS BEAUTY” began in January, 2024 have sold originalcosmetics in the past, but this time we would like to use our brand name and leverage our namerecognition to expand our business.
The product range starts with a total of six items, including BB cream, serum, and color shampoo. We
target millennial men and women. In addition to our selected physical stores and our own online store,
we will expand sales through Rakuten, Amazon, and ZOZOTOWN. We aim to surely reach the target
audience through PR methods such as the use of influencers.

35

02 Major Initiatives in FY24/3 3Q of the Medium-Term Management Plan

The UA MULTI Strategy: Brand development for business expansion

Launched UNITED ARROWS BEAUTY, a cosmetics brand for millennials
Differentiated lineup, pricing that is easy to use day-to-day
Product lineup
BB Cream¥2,530Rich serum¥2,860Face wash powder¥1,980Color shampoo treatment¥2,420each

Hair oil¥2,750(Price including tax)

URL:https://store.united-arrows.co.jp/s/brand/ua/feature/res/unitedarrowsbeauty/
Instagram: https://www.instagram.com/unitedarrowsbeauty_official/

PAGE | 36

The list of this lineup and price range are as shown on the slide. The packaging designs make it easy forpeople of all genders to pick up and want to place items in bathrooms and other places. Hoping to offer
skincare and haircare that make people fashionable before wearing clothes, we set the price range tomake them easy to use day-to-day.

36

02 Major Initiatives in FY24/3 3Q of the Medium-Term Management Plan

The UA MULTI Strategy: Brand development for business expansion

Aim for ¥40.0 billion in new apparel businesses and ¥25.0 billion in apparel derived
businesses and non-apparel businesses over the long term
Planning for this initiative + α is under way, and launch multiple brands within
the medium-term management period
250.0 billion¥

Overseas (Taiwan, China)

10.0

COEN CO., LTD.

25.0
CAGR

UA LTD. new businesses:

6.8%
Overseas (Taiwan)

1.5

Apparel-derived and other domains
UA LTD. new businesses:

130.1 billion¥

Apparel domains

COEN CO., LTD.

10.7

25.0
40.0

UA LTD. existing
businesses

UA LTD.

118.4

150.0

FY2023 Results

FY2033 Plan

(10 years later)

Sales (billions of Yen)

PAGE | 37

The new initiatives I explained this time are some of the ones we are currently considering. The
Company is developing several other brands and plans to launch them within the period of themedium-term management plan. Once finalized, the details will be disclosed in a press release.
By FY2033/3, we would like to increase the scale to ¥40.0 billion in new apparel businesses and ¥25.0
billion in businesses derived from apparel and businesses other domains by growing the initiatives
that started during the current medium-term management plan over the long term.

37

03
Progress in Sustainability
Initiatives

PAGE | 3838

03 Progress in Sustainability Initiatives

Promoting collection of Code of Conduct for
Business Partners consent forms

Conducting on-site audits of domestic partner
factories• collection rate

• Completed 5 auditing projects scheduled for FY2024/3. (2 projects for
FY 2023/3)

Result at the end of January 2024

74.3

%

(Result at the end of March 2023 48.2% and target 100% by FY 2031/3)• Established the code with the aim of increasing supply chain transparency
and preventing human rights violations• Aim to obtain consent forms from all domestic and overseas business
partners to whom we outsource the production of private label products andOEM products• Conducted a third-party audit by an external organization in accordancewith the Japan Apparel and Fashion Industry Association's “CSR Factory
Audit Requirements”• In the future, we plan to expand the scope of audits to overseas partner
factories“Code of Conduct for Product Procurement Partners”
https://www.united-arrows.co.jp/wp-content/uploads/2023/08/2306_kihan_eng.pdf

Obtained B rating in CDP Climate Change
Report 2023
• The B rating is considered to be at the management level andevaluates that “the company is aware of its own environmental risks
and their impacts and is acting accordingly”
PAGE | 39

The collection rate of consent forms for the Code of Conduct for Business Partners in ProductProcurement was 74.3% at the end of January 2024, and increased 26.1pts from 48.2% at the end of
March 2023. The code was formulated with the aim of increasing supply chain transparency andpreventing human rights violations, and we are requesting provision of consent forms from all domestic
and overseas business partners to whom we outsource the production of private label products. The
goal is to collect them from all business partners by FY2031/3, but we are also considering achieving thegoal ahead of schedule.
Regarding on-site audits of domestic partner factories, five projects scheduled for this fiscal year havebeen completed, following two projects in the previous fiscal year. We started this initiative in theprevious fiscal year and implemented a third-party audit by an external organization in accordance with
the Japan Apparel Fashion Industry Council’s “CSR Factory Audit Requirements”. We will increase thetarget factories in the next fiscal period and have a plan to expand the scope to overseas partner
factories in the future.
The Company obtained a B rating in CDP Climate Change Report 2023. The B rating is considered to be at
the management level and evaluates that “the company is aware of its own environmental risks and theirimpacts and is acting accordingly”. We would like to continue contributing to solving social issues
related to climate change through SARROWS activities.

39

03 Progress in Sustainability Initiatives

Support for the 2024 Noto Peninsula Earthquake•

Donation of UA miles
If the customers use their UA miles to make a donation, we will makethe donation to Peace Winds Japan, a certified NPO, on their behalf.
Funds collected will be used for emergency support activities by theorganization's disaster emergency support project, “Flying Searchand Medical Team ARROWS''. As of the end of January, over 1,400
donations totaling over ¥0.8 million have been made•Donation of clothing
A total of 200 items of clothing, mainly outerwear, were donatedthrough the “Flying Search and Medical Team ARROWS”

A scene at the time of delivery of support clothing (Courtesy Peace Winds Japan)

PAGE | 40

I will explain about support for victims of the 2024 Noto Peninsula Earthquake.
Miles earned through shopping and other activities can be used to donate money in our membershipprogram, UA Club. Currently, to support the victims of the Noto Peninsula Earthquake, we are making it
possible for members to choose Peace Winds Japan, a certified NPO, as the recipient of their donations,and funds collected will be used for emergency support activities by the organization's disasteremergency support project, “Flying Search and Medical Team ARROWS''. As of the end of January, over
1,400 donations totaling over ¥0.8 million have been made, and our customers are very interested in thematter.
We donated a total of 200 items of clothing, mainly outerwear, through the “Flying Search and Medical
Team ARROWS”.
We would like to continue working with our customers on activities that will help support disaster victims.

40

04
Message from Yoshinori Matsuzaki,
Representative Director, President, and CEO

PAGE | 4141

04 Message from Yoshinori Matsuzaki, Representative Director, President, and CEO

Three Key Strategies

providing excitement - connectingwith customers widely and deeply

PAGE | 42

Thank you very much for your continuous support.
Three quarters of the first year of the medium-term management plan have passed. I'm sure you're
concerned about the fall/winter sales, so let me talk about our recognition of the current situation.
First of all, we believe that the main reason why sales did not grow as expected in the third quarter
was due to a lack of response to external factors and high temperatures. Although mild winter was
anticipated, there was a heavy reliance on winter clothing, as a result, we were unable to fullyincrease sales at fixed prices during the season. We believe this is the result of being unable to
make major changes to our products and had a significant lack of new product proposals to ourcustomers, as the need for seasonless products increases.
Even so, products based on seasonal trends, such as those proposed in the Trend-conscious
Market, are performing well, and we believe that increasing the inventory and product lineup ofsuch product groups will provide growth potential for the next season and beyond.
・Proposing more seasonless items than ever before
・Suggestions for trendy items that are different from before

Although these are basic matters, we recognize that by focusing more on these, we will be able tocapture even more customer needs.
From the perspective of “seasonless” and “proposing different trends”, we believe the initiatives
that we are promoting, including UA BEAUTY and brand development for the next generation,
which we explained earlier, and CITEN, which has been in full swing since last year, will be effectivefrom next fiscal year onwards and contribute to achieving the medium-term plan.
We apologize for your concern based on our current performance, but we are making steadyprogress in taking action based on our understanding of the medium-term issues and current
challenges. And in addition to reinforcing our existing core brands, we are also planning to develop
new brands in the future.
Although it was an exceedingly difficult third quarter, we will continue to work hard to achieve“high sensitivity and high added value” to achieve our plans for this fiscal year. Thank you for yourunderstanding and support.

42

05
Reference Materials

PAGE | 43

43

05 Reference Materials: FY24 Group Management Policy

providing excitement - connecting with customers widely and deeply

Take steps to provide new value

PAGE | 44

The Group’s management policy for the fiscal year ending March 2024, which is the first year of theMedium-Term Management Plan with the fiscal year ending March 2026 as the final year, is“Provide Excitement: Take Steps toward Providing New Value.”44

05 Reference Materials: FY24 Group Management Policy

Three Key Strategies
Strategy• Grow and expand existing
businesses
Top-line growth
Improvement of gross margin

Strategy• Brand development forbusiness expansion• Global expansion

Strategy• Promote OMO• Optimize the supply chain• Strengthen brand appeal
Expansion of investment in humancapitalRebranding of the corporate brand• Re-grow COEN
PAGE | 45

To realize this policy, we will promote three strategies: UA CREATIVITY strategy, UA MULTI
strategy, and UA DIGITAL strategy.
Under the UA CREATIVITY strategy, we will work to grow our existing businesses by opening newstores and growing online sales, and to improve gross margins by enhancing the percent of items
sold at standard price and setting appropriate prices. In addition, in order to strengthen the brandpower, we will increase investment in human capital, such as expanding employee training, andprepare for the development of new brands that will create a new corporate image.
Under the UA MULTI strategy, we will prepare for developing new businesses, expanding ourbusiness in Taiwan, and access to the Chinese market.
Under the UA DIGITAL strategy, in addition to renovating the house card program to expand
lifetime value (customer lifetime value), we will improve the functionality of our own EC site andpromote OMO measures. To optimize the supply chain, we will proceed with preparations for the
renewal of the core product management system.

45

05 Reference Materials: Overview of FY24 Business Plan

Consolidated Business Plan
(Millions of yen)

Sales
Gross profit
vs. Sales

SGA expenses
vs. Sales

Operating income
vs. Sales

Non op. P/Lvs. Sales

Ordinary income

YoY Change/vs. sales pt

FY2023 Results

FY 2024 Plan

130,135

138,300

8,164

106.3%

67,178

72,1004,921

107.3%

51.6%

52.1%

0.5pt

-

60,816

65,1004,283

107.0%

46.7%

47.1%

0.3pt

-

6,362

7,000

637

110.0%

4.9%

5.1%

0.2pt

-

538

420

(118)

78.0%

0.4%

0.3%

-0.1pt

-

6,900

7,420

519

107.5%

difference

5.3%

5.4%

0.1pt

-

(352)

(370)

(17)

-

vs. Sales

-

-

-

-

Net income attributable to owners of parent

4,341

4,830

488

111.2%

vs. Sales

3.3%

3.5%

0.2pt

-

vs. Sales

Extraordinary P/L

PAGE | 46

For the fiscal year ending March 31, 2024, we forecast sales of ¥138,300 million, 106.3% YoY, andgross margin of 52.1%, up 0.5pt from the previous year. Gross margin is expected to improve fromthe previous fiscal year in both the first half and the second half.
SGA expenses will be¥65,100 million, 107.0% YoY and vs. sales will be 47.1%, up 0.3pt from theprevious year.
Operating income will be ¥7,000 million, 110.0% YoY and vs. sales will be 5.1%, up 0.2pt from theprevious fiscal year.
Ordinary income will be ¥7,420 million, 107.5% YoY and vs. sales will be 5.4%, up 0.1pt from theprevious fiscal year.
Recording of ¥370 million in extraordinary loss is planned, and net income attributable to owners ofparent will be ¥4,830 million, 111.2% YoY.
Dividends are expected to be ¥55 for the full year, with an interim dividend of ¥17 and a year-end
dividend of ¥38, for an expected dividend payout ratio of 32.4%.

46

05 Reference Materials: Overview of FY24 Business Plan

Non-consolidated Sales Plan
(Millions of yen)

FY2024
1H

FY2024YoY

2H

FY2024
YoY

Full

YoY

54,562104.9%

70,812106.6%

125,375

105.9%-

106.3%-

108.1%-

107.3%

Retail Existing Stores-

104.9%-

106.0%-

105.5%

Online Existing Stores-109.4%-

112.4%-

111.1%

Non-consolidated sales

Retail + Online Existing Stores*The plan includes the impact of the change in revenue recognition standards for non-consolidated sales only.

PAGE | 47

Non-consolidated sales are expected to be ¥125,375 million, 105.9% YoY.
The year-on-year comparison of existing store sales for both retail and online is expected to be
107.3% for the full year, 105.5% for retail, and 111.1% for online.
The plan includes the impact of the change in revenue recognition standards for non-consolidated
sales only.

47