Earnings Results
Briefing for the Third Quarterof the Fiscal Year Ending
March 31, 2024
February 13, 2023
Komehyo Holdings Co., Ltd.
Securities code: 2780
(Tokyo Stock Exchange and Nagoya Stock Exchange)From reuse to relay use
We will inherit that "value".
Maintenance, remake, editing, connection with people.
"Relay youth" is not just a downcycle of the value of things,
but an upcycle of increasing the value, even though it isreused.
As values for a sustainable future society spread, we willcontribute to the formation of a sustainable society by
respecting producers and users and relaying their "feelings".

2

Komehyo Holdings is necessary for a sustainable recycling society.
It acts as a relay point in the connection of “people,” “things,” and “society.”
We will strive to connect “good quality" and "value" to the future.

We respect people for making products, thank people for providing products for use
by other people, and make people who reuse such products happy,
and by doing so, create an empathy-based recycling society.

We develop a concept of environmentally and socially conscious recycling into a culture

We listen and empathize with what others say.
We value the importance of talking.
We take action proactively.
We are not afraid of creating change.

3Competitive Advantages of the KOMEHYO Holdings Group
Since its founding, the Group has consistently worked on reuse.
Developing Business with Three Competitive Advantages.

Talent retention
rate of90% or more

In order to acquire a wealth of productknowledge and the ability to determine
authenticity, it is necessary to learn manythings while accumulating experience.
With a high staff retention rate, Komehyo
Holdings is able to train highly specialized
appraisers and salespeople with extensive
product knowledge. In this way, through humanintervention, we can provide high value-added
services and achieve sustainable growth.

1.7

Brand reusemillionitems handled
annuallyMore than 1.7 million brands andfashion-related items handled by KOMEHYO
are available annually.
By handling a large number of products, we can
optimally supply products to multiple sales
channels. Utilizing the wealth of product andcustomer data you have accumulated in-house,
you can achieve appropriate inventory control
and effective marketing.

No.1 *The power of our long-established brand,
supported by trust, security, and highrecognition as the No. 1 brand reusecompany, will enable us to demonstrate highcompetitiveness not only in domestic growth
but also in global expansion.
As a pioneer in the reuse market, Komehyo
Holdings is able to accurately grasp theneeds of domestic and overseas customers
and provide services that will please many
people.

*Source: Reuse Market Data Book 2023

4

Contents
1. Cumulative results for the third quarter of the fiscal year
ending March 2024

P. 6

2. Initiatives for the third quarter of the fiscal year ending
March 2024

P.24

3. Future outlook

P.35

5

1. Cumulative results for the third quarter of the fiscal year
ending March 2024

P. 6

2. Initiatives for the third quarter of the fiscal year ending
March 2024

P.24

3. Future outlook

P.35

6

FY 2024 3Q Financial Summary
Brand・Fashion busines
Purchase from individual customers

46,558Millions of yen（YoY139.7％）

Tire and Wheel buisinessNet sales

Operating income

80,115

4,671

Millions of yen

Millions of yen（YoY136.1％）（YoY138.6％）

Capitalizing on ample inventory from strong purchases from individuals, retail and corporate sales
were brisk, driving significant growth in net sales. We increased net sales and operating income bycontrolling expenses as planned, despite soft market prices and a decline in gross profit margin.

Purchase
P.8,19,26,27
Gross profit marginP.8,22
SG&A expenses

P.8,12・Personal purchases were strong due to the growth of existing stores and the opening of new stores. Highest
purchase amount ever in a quarter
・Opened 34 purchasing specialty stores (including 8 FCs), 1 flagship store, 1 purchasing store, and 3 overseas
stores.
・Gross profit margin declines due to falling market prices for watches and bags
・Prioritize sale of high-risk inventory through corporate auctions while securing retail inventory

Net sales

Operating income

3,991

268

Millions of yen

Millions of yen（YoY104.8％）（YoY90.6％）

Sales increased due to strong online sales of summer and winter tires, as well as
increased domestic sales of wheels designed in-house. Gross profit margin declined
as the snowfall season was later than usual and winter products struggled. Profit
decreased due to an increase in selling, general and administrative expenses.

Net sales
P.18

Gross profit margin

SG&A expenses
・Continue to actively invest in human resources for future business expansion.
・SG&A expenses were controlled almost as planned

・Opened one purchasing store
・In-house designed wheel “Air/G” series sold well, 121% compared to the same
period last year
・Due to soaring wheel prices, single tire sales were strong, while set sales,
which have a high gross profit margin, were weak. Gross profit margindecreased
・SG&A expenses increased due to an increase in personnel and warehousecosts for storing and consigning inventory.

P.34

7

Brand fashion business 3Q progress
Initial Plan

2Q

3Q

Purchase

・Purchase (individual purchase+ corporate purchase)：YoY
118%
・The market price for eachproduct is flat or gently rising・Individual purchases: YoY 146.0%
・Despite unstable diamond and watch market conditions, well-balanced purchases
continued to strengthen with a focus on retail-oriented products.
・Domestic retail gold prices exceeded 10,000 yen/g at the end of August, and jewelry
purchases (KOMEHYO, BRAND OFF, and Selby) in September were up YoY 203%.

・Individual purchases: YoY 149.8％
・In October the impact of domestic gold retail prices exceeding 10,000 yen per gram
continued, resulting in strong performance with jewelry purchases.
From mid-November onwards market prices started to fall, particularly for high-priced
watches and bags. We controlled purchase prices by referencing market prices on
auction sites.

Net sales

・Duty-free sales: 104% compared to 1Q, continued steady growth
Duty free sales were at the・Corporate sales also increased more than expected due to strong individual
same level as the fourth quarter purchases. Corporate sales of gold bullion and watches increased in particularof last year.
・Maintaining strong retail sales by making sure to stock popular products.
・Bags performed well, and the sales share ratio increased.

GrossprofitmarginImprove gross profit margin byincreasing the ratio of retailsales to sales

Changes in
We will make active investments
selling,
general and to drive continuous growth inadministrativ
e expenses Japan and overseas.

・Duty-free sales: 144% compared to 2Q,Continues to be strong
・We strengthened corporate sales with a focus on high-risk inventory, taking into
account trends in market prices
・The bonus season discount campaign got off to a weak start, and additional pricereductions were made during the campaign period.
・Due to the warm winter we struggled to sell winter clothing in the first half.

・Gross profit margin was expected to be at the same level as 1Q of this fiscal year,
but it decreased by 2.1 points.
・Assumed the same level as 1Q, but down 2.1 pt.
・In bags, the gross profit margin declined due to an increase in the sales share of
popular products.
・Decline in diamond prices and an increase in the gold bullion ratio led to a lower
gross profit margin on corporate sales of jewelry.

・The gross profit margin was expected to be at the same level as the previous year,
but it decreased by 2.6 points.
・Gross profit margin for corporate sales declined due to fluctuations in market prices.
Gross profit margin declined significantly especially for high-priced watches and bags.
・Gross profit margin declined due to retail sales prices also being adjusted based on
fluctuations in market prices.

・Aggressive investment in human resources in anticipation of future businessexpansion.
・Controlled almost exactly as planned.

・We continued to actively invest in human resources aimed at growth in Japan andoverseas.
・SG&A expenses were controlled largely in line with plans

8Changes in average purchaser unit price by product（Komehyo Co., Ltd.）Due to purchase price control in line with market price fluctuations for watches and bags from late November onward, unit purchase price per customer also followed a downward trend.
We have strengthened the purchasing of high unit price clothing since last year, and the purchase prices have calmed somewhat compared with the same months in the previous year.
For jewelry, the number of customers bringing in gold ingots has slowed, and although market prices of diamonds have had an impact, business has remained steady without major
fluctuations.

（YoY）
150%

100%

9

FY 2024 3Q Performance
In the first nine months, record sales and profit at every leve
(Millions of yen)

FY2024 1Q

YoY

FY2024 2Q

YoY

FY2024 3Q

YoY

FY2024 3Q
9months

YoY

vs full year
plan*

Net sales

25,096133.8%

27,667135.2%

31,377133.7%

84,141134.2%

79.4%

Gross profit

6,592

139.7%

6,698

131.5%

7,815

120.7%

21,107129.6%-

Gross profit margin

26.3%＋1.1pt24.2%△0.7pt24.9%△2.7pt25.1%△0.9pt-SG&A expenses

4,867

122.4%

5,212

127.5%

5,905

130.9%

15,986127.1%-

Operating profit

1,724

233.2%

1,485

147.9%

1,910

97.2%

5,121

138.0%

71.1%

Operating profit
margin6.9%＋3.0pt5.4%＋0.5pt6.1%△2.3pt6.1%＋0.2pt-Ordinary profit

1,762

231.9%

1,508

158.9%

1,887

83.2%

5,158

129.7%

71.4%

Net income attributableto owners of parent

1,183

227.9%

953

166.6%

1,536

95.9%

3,674

136.3%

76.2%※*Announcement of "Notice Concerning Revision of Earnings Forecast and Dividend Forecast" on August 14, 2023

10

Operating profit increase and decrease factor
Purchasing remained strong, and sales increased significantly for both retail and corporate sales.
Due to sales growth, profit increased by absorbing the decline in gross profit margin and increase in SG&A expenses.
(Millions of yen)
Increase in personnel expenses
such as salaries and allowances -1,330
Increase in G&A expenses
such as rent
-1,226
Increase in selling expenses
such as advertising expenses-852

FY2023 3Q

Sales amountincrease

Gross Profit
margindecrease

SG&A
Expenses
increase

FY2024 3Q

11Changes in selling, general and administrative expenses
Hiring and training was strengthened to secure the staff needed to open large stores annexed with sales facilities andpurchase centers, resulting in higher personnel expenses.
The SG&A to net sales ratio declined as we managed to control SG&A expenses as planned.
SG&A expenses to sales ratio(%)

15,986(Millions of yen)

（YoY 127.1%）

12,576
10,613（YoY 132.7%）－Selling expenses－G&A expenses（YoY 127.2%）－Personnel expenses（YoY 124.4%）

FY2022 3Q

FY2023 3Q

FY2024 3Q

12

Active investment in human resources（FY2024 9months Komehyo Co., Ltd.）With an eye on domestic business growth and global expansion, we will proactively invest in our human resources, which is
our strength.Aim to expand business scale while controlling overall personnel costs and increase share in the growing reusemarketPersonnel expenses

YoY

124.4％

Recruitment cost

YoY

232.8％

Education and training
expenses

YoY

Number of regular
employees hired

193.5％

YoY

206.7%*Not including personnel expenses for in-house instructors

Recruitment cost per regular
employee

YoY

112.6％*Recruitment cost per person:
Recruitment cost/number of recruits

Education and training
expenses per regular
employee

YoY

159.7％Net sales per regular
employee

YoY

141.9％

22.

Purchase amount per
regular employee

YoY

115.5％*Education and training expenses per employee:
Education and training expenses/number of regular employees

13Non-operating income(expenses) / Extraordinary income(losses)(Millions of yen)

Non-operating
expenses74
Interest expenses54
Rent expenses
on store7
Other12
Non-operating income112
Foreign exchange gains 29
Interest income18
Insurance claim income14
Dividend income12
Other37

Extraordinary losses73
Impairment losses39
Loss on retirement of
non-current assets33
Extraordinary
income 1
Gain on saleof non-current
assets1

14

Balance sheet overview(Millions of yen)

FY2023

FY2024 3Q

Change35,322

52,566

17,243

Cash and deposits

10,382

11,234852

Inventories

18,70530,061

11,355

Other current
assets

6,234

11,2705,035

Non-current assets

11,43013,087

1,656

Assets

46,75365,65318,899Liabilities

22,506

38,116

15,610Interest-bearing
liabilities

16,49831,980

15,482Other liabilities

6,007

6,135

127

Net assets

24,247

27,536

3,289

Liabilities andnet Assets

46,75365,65318,899Current assets→Due to strong individual purchasing andstrengthening of corporate purchasing
Inventories, which are the source of sales,
increased→Increase in cash on hand and inventories,
increase in interest-bearing debt
→Attributable to an increase in retained
earnings and other factors

15

Inventory Turnover（Brand・Fashion business）
To address the drop in market prices for watches and bags, we have been converting high-risk inventory into cash on apriority basis while ensuring retail inventory.
Abundant inventory is directly linked to future sales and profits, so inventory control maintains quality and freshness.
Inventory turnover
period（DAY）

Inventories(Millions of yen )FY2022

FY2023

FY2024３Q
Gross profit margin①

26.0%

25.3%

24.6%

３Q
inventory turnover②

3.4

3.4

3.2

３Q
①✕②

88.4%

86.0%

78.7%

59

42

－

FY
Inventory write-down
FY2022 3Q

FY2023 3Q

FY2024 3Q(Millions of yen )16

Reference: Trends during market fluctuations and our countermeasures
price

When market prices are declining,gross profit margins tend to decline.

When market prices are rising,gross profit margin tends to rise▼▼・Make purchase prices more balanced
・Strengthen corporate sales with emphasis on inventory
rotation・Reduce the price to the optimal selling price・Focus on the balance between retail and corporate sales
・Active purchasing
・Raise the price to the optimal selling price

The market price of used products is
expected to rise in the long term due tofactors such as rising sales prices inprimary distribution.

time

17

Overview by segment
In the cumulative 3Q, the brand and fashion business saw an increase in sales and profits due to strong performance in personal purchases
and retail sales.In the tire and wheel business, sales increased due to strong online sales of new tires.

Brand
Fashion

Tire
and
Wheel

Real
estateleasing

FY20249months

FY2024 1Q

YoY

FY2024 2Q

YoY

FY2024 3Q

YoY

Net salesc

24,075135.3%

26,724136.9%

29,314136.1%

80,115136.1%

Operatingincome1,683

230.5%

1,442

143.8%

1,545

94.4%

4,671

138.6%

Operatingmargin7.0%＋2.9pt5.4%＋0.3pt5.3%△2.3pt5.8%＋0.1ptNet salesc

1,009

106.5%

931

99.6%

2,051

106.6%

3,991

104.8%

Operatingincome

2

79.9%

△8

-

275

90.7%

268

90.6%

Operatingmargin0.2%△0.1pt

-

-

13.4%

△2.4pt6.7%△1.1ptNet salesc

71

100.1%

71

100.1%

71

99.9%

214

100.0%

Operatingincome21100.0%

21

104.0%

21

97.2%

64

100.3%

Operatingmargin

30.3%

‐

30.0%

＋1.2pt30.0%△0.8pt30.1%＋0.1pt(Millions of yen)

YoY

18

Purchase from individual customers (Group total)
In part due to the ongoing opening of new purchase centers, the number of customers increased, and was up 150% YoY in
the third quarter. The amount spend on purchases was a record high for a quarter.
Purchase from individual customers(Group total) (Millions of yen)

* The individual purchase amount is the amount purchased from an individual customer through the following route.
・Purchasing at stores ・Purchasing at visited sites ・Purchasing at events (KOMEHYO)
・Purchasing using home delivery servicesKOMEHYO)

19

Breakdown of consolidated Net sales(Retail / Overseas/Domestic tax-free sales)[Retailing] Strengthening of retailing has increased the retail ratio, maintaining an ideal composition ratio(Retail: Corporate = 50:50).
[Overseas] Overseas sales were strong due to store relocations and the opening of new stores in Hong Kong and Taiwan.
[Duty free] Duty free sales performed well due to stores being kept well stocked.

Retail ratio

Domestic tax-free sale ratio

Overseas ratio

YoY＋4.2ptYoY＋0.3ptOverseas*
Corporate
sales,etc*

Tax-free sale*

9.6%

13.9%

RetailFY2024 3Q
Net sales
84,141（Millions of yen）

FY2024 3Q
Net sales
84,141

Domestic （Millions of yen）
90.4%

* "Corporate sales" includes auction fees.

* The ratio of overseas business does not include
domestic tax-free sales, etc.
*Total sales of overseas group companies

FY2024 3Q
Domestic sales

Taxation
86.1%* Calculated before eliminating internal transactions.

20

Breakdown of domestic duty-free sales【 Composition ratio by country/region 】40% of customers are Chinese, and there have been no major shifts in the trend of the top five countries accounting
for just under 80% of all customers. During the peak inbound period in the fiscal year ended March 31, 2015, Chinese customers accounted for 50% of customers,
suggesting there is room for growth.
【Percentage of purchasers by age group】They are younger than the domestic customer base, with the volume zone being customers in their 30s to 40s.

Composition ratio by country/region

Percentage of purchasers by age group

Others
21.9％
Thailand
4.9％
America

Domestic
duty-free sales
FY20249months

Chi
na
40.6％

8.8％
Philippines

11.2％

Taiwan12.6％*Aggregated by issuing country/region from passports21

Quarterly Trends in Consolidated Net Sales and Gross Profit Margin[Net sales] Sales increased in both retail and corporate sales due to strong individual purchases
and corporate purchases.
[Gross profit margin] Gross profit margin declined for both retail and corporate sales due to falling market prices forwatches and bags.
Gross Profit Margin(%)

Consolidated
Net Sales(Millions of yen)・Tend to rise as the composition ratio of retail sales increases

Factors behind fluctuations in gross profit

・The ratio of corporate sales is on the rise as inventory is revised in September and March.
・he figure may vary depending on the weightings of items that can be purchased.

22

Shareholder return
The policy is to aim for a dividend payout ratio of 20%. Taking into consideration the profit forecast level for the fiscal year ending March 31, 2024, the annual
dividend for the fiscal year ending March 31, 2024 was revised from the initial plan of 76 yen to 88 yen (an increase of 28 yen from the previous year).

payout ratio(%)( yen)

Fiscal year-end dividend（planned）

Interim dividend23

1. Cumulative results for the third quarter of the fiscal year
ending March 2024

P. 6

2. Initiatives for the third quarter of the fiscal year ending
March 2024

P.24

3. Future outlook

P.35

24

FY 2024 3Q Initiative Summary

25

Stores：Group total 216 stores（As of December 2023)
Brand fashion

flagshipstore

6 (１）Sales Stores

1

Stores annexedwith sales facilities

18

3(1）

Purchasing Center

112 ( 9,-1 )6Franchised
purchasing center3) represents the increase during

Tire and Wheel

1
6

3
2

10 ( 1 )

2

2

10

2

24 ( 3 )Overseas6

13 (１）

Total

143

49

BRAND OFF
KANAZAWA store*The figure in parentheses (the third quarter.

Shellman
GINZA store

7

3

WORM OSAKA

Craft NAKAGAWA store

SELBY OKACHIMACHI store

26

Opening the purchase center
Store opening plan：The amount of purchase per store remained strong. The store openings added 3.9 billion yen.(1.5 billion yen during the fiscal year) to the annual
purchase amount.Signboard effect from new store openings had a positive impact on existing stores.
New store openings: KOMEHYO opened 26 new purchase centers in the first nine months of the fiscal year. For the full year, we expect to achieve have opened acumulative 40 new stores and achieve our three-year target of 100 new store openings.

Trends and plans forindividual purchases
15
39(Billions of yen)

15
30
30

20

27

Product distribution（FY2024 9months）
YoY

YoY
＋1pt

▲4pt

Purchase fromindividual customers
Stores/Home delivery Purchasing/Purchasing at
Purchasing at visited sites

salequality/market/distribution

Purchasing
73％

KOMEHYO

41％

Merchandise center

RetailStore
WEB（Own EC site,EC mall,live commerce）

events/Suitable for retail

Purchaseamount ratio

39％ 26％ 29％ 6％

YoY（±0pt） （▲2pt） （＋2pt） （±0pt）

Purchase from
corporations
Supplementing individual purchases mainly for the
purpose of maintaining the attractiveness of stores

27％
YoY

+4pt

Products purchased
nationwide are sent here,
and skilled appraisers
assess their authenticity
and maintain them as
needed.
The center manages
individual items, paying
attention to turnover andinventory risk,
and links online store
inventory and physicalstore inventory to provide
products to the mostappropriate buyers.

・For corporations(antiques, unsuitable for retail, etc.)
・Large inventory・High market risk
・Activation of auctions

59％

Corporate sales

YoY
▲1pt

28

E-commerce-induced sales rate（Komehyo Co., Ltd.）In addition to an increase in the number of customers, the per-customer spending rose, resulting in e-commerce-induced sales of 134% YoY, a record high for the quarter.
E-commerce-induced sales rate was at just under 40% due to rising sales ratio of visitors from overseas to Japan at retail stores.
As part of efforts to improve the purchasing environment for customers from overseas,
since October 2023 we have been introducing tools with multi-lingual support on our own ecommerce site.
In November 2023 we began selling on the "Mercari Shops" e-commerce platform, bringing the total number of e-commerce platforms in Japan and overseas that we sell on to 8.
E-commerce-induced sales rate (%)：
EC Sales as a Percentage of Retail Sales

3,467
3,064
2,814
2,333
2,021

2,803
2,197

2,512

2,856 2,619

2,640

EC induced sales(Millions of yen)

－KOMEHYO website－Back orders－Others*KOMEHYO website: Make a purchase by directly clicking the KOMEHYO online store or by making a phone call to a contact center and receiving a customer service.
Back orders(Purchasing from a catalog): Make a purchase after choosing a product from a catalog at the KOMEHYO online store, having the product delivered ta nearby KOMEHYO store and making sure of the product in person.
Others(Other companies’ websites): Make a purchase at a store KOMEHYO set up at an Internet sales site operated by another company.

29

Expanding customer base Opening of “KOMEHYO SHIBUYA”
KOMEHYO SHIBUYA, a large-scale sales store with purchase attached, will open on November 17, 2023. Strengthening of retail sales on the back ofstrong purchases. Targeting domestic and international fashion connoisseurs, mainly Generation Z and Y, the company deals mainly in fashion items
such as clothing and bags.
[Results] Progressed according to plan towards annual sales target of 2.5 billion yen[Customer demographic] According to our own member data, the volume zone of the customer demographic for all KOMEHYO stores is in
their 40s to 50s (45% of members). On the other hand, KOMEHYO SHIBUYA's high-volume customer base is those in their 20s to 30s (45% ofmembers).Efforts are being made to expand the target group of future customers. The location is frequented by many tourists visiting
Japan, and it is used by people of various nationalities.

30

BRAND OFF Strengthen retail
Strong performance has continued at the existing BRAND OFF Ginza Main Store flagship and at overseas stores inHong Kong and Taiwan. We have continued to enhance points of contact with new customers by renovating retailstores, opening new stores and making active improvements in e-commerce.

October 2023
Newly opened BRAND OFF Kanazawa Forus Store (Japan)".

In October of the same year, `BRAND OFF Kanazawa Main Store'' was renovated.

December of the same year
Opened "BRAND OFF Tsuen Wan Plaza store (Hong Kong)"* Impact from the 2024 Noto Earthquake: Although BRAND OFF Kanazawa Main Store suffered partial damage on a small scale, the damage did not disrupt operations.

31

BRAND OFF FC purchase store opened▶Continue opening franchise stores

Planning to open 40 stores in FY03/24.Products purchased at specialized purchasing stores (FC) are sold through the most appropriate channels, mainly through theauction JBA, which we operate in-house.A mechanism that increases the number of auction items by opening a FC store and contributes to an increase in trading
volume.
Product commercialization

Generalcustomers
General customers

FC
Exhibit
General customers

General customers・
Corporation

An attractive platform on which an abundance of
items are placed for auction

Corporation

In the first nine months, eight new franchised purchase centers were opened (target progress rate: 20%). For the full year we expect to open 14
new stores, falling short of our target.
・BRAND OFF Ginza main store, JBA, and Hong Kong and Taiwan stores performed well. Prioritizing resources for retail store renovations and store openings.
・We have emphasized continued growth after opening new stores, and spend time discussing matters with franchise owners. None of the newly opened
franchise stores have been closed due to unprofitability.
・We are currently strengthening the headquarters system providing support to franchise owners, with the aim of increasing the amount of purchases per
newly opened franchise store and improving their self-reliance.
・We strengthened sales targeting major corporations that are expected to open multiple stores.

32

Corporate auction volume
JBA auctions, particularly offline auctions in Kanazawa, displayed strength due mainly to an increase in the number of registered members.
The total trading volume of corporate auctions increased 120.1% year on year, hitting a record high.

Number of registeredmenmbers

Trade volume(Millions of yen)33

Tire and Wheel
Sales increased due to strong online sales of summer and winter tires, as well as increased domestic sales of in-house designed
wheels.Gross profit margin declined as the snowfall season was later than usual and winter products struggled. Profit decreased due
to an increase in selling, general and administrative expenses.
AUTO PARTS JAPAN・Sales of new tires and wheels for the summer werestrong, increasing 113% compared to the same period lastyear. However, due to an increase in sales prices inprimary distribution, sales of wheel and tire sets, whichhave a high gross profit margin, decreased.
・The number of used items purchased at stores wassteady at 3.1% compared to the same period last year.
We are able to secure high-quality stock of genuine
manufacturer's products through trade-in.

・Sales of new winter tires at malls such as Rakuten Market
were strong, increasing by 20% compared to the previous
quarter.
・The number of listings increased significantly by 122%
compared to the same period last year due to streamlining
operations. Both used sales amount and number exceeded
the same period last year, so there is room for growth.

・Sales of the “Air/G” series of in-house designed wheels forthe domestic market were strong. In particular, the new
product “VULCAN” is doing well.
・SG&A expenses increased due to increase in personnel

34

1. Cumulative results for the third quarter of the fiscal year
ending March 2024

P. 6

2. Initiatives for the third quarter of the fiscal year ending
March 2024

P.24

3. Future outlook

P.35

35

Brand and Fashion business 4Q assumption
In light of predictions about market price trends for key goods, we expect that increased net sales will absorb the decline
in gross profit margin, with operating income staying in line with forecasts.
Forecast for 4Q

The forecasted market trend of mainstay products

Purchase

・We will continue to strengthen purchasing of retail-oriented products while
placing an emphasis on price control based on market prices for both purchasesfrom individuals and purchases from corporations.
・New store openings will continue to have positive effects. The rise in purchaseamounts per customer is expected to top out, while purchases from individuals are
expected to remain strong.

Sales

・We will strengthen corporate sales with a focus on high-risk inventory while
maintaining an awareness of inventory turnover.
・Inbound demand will continue to be strong, and as the positive effects from theopening of KOMEHYO SHIBUYA will continue, retail is expected to be steady.

Jewelry
Market prices for diamonds with the exception of melee diamonds(small diamonds) are expected to bottom out but remain weak,
while the domestic gold prices are expected to remain high. Brand
jewelry prices are expected to remain flat, not linked with changes
to sales prices in primary distribution.

Watch
Market prices are on a declining trend, particularly high-priced
items, and instability is expected to persist due to exchange rate
fluctuations and a changing economic environment. Fluctuations
in market prices of retail products from popular brands arelimited, and are expected to remain flat in the future.

・As we will set prices to reflect fluctuating market prices particularly for

Bag
Market prices for popular brands, particularly high-priced items,
are on a declining trend, and with sales prices in primary
distribution continuing to rise, linked increases in market pricesthat have been seen to date are not expected to continue. Market
prices for vintage items are expected to remain flat.

FashionWe project that demand for high-priced items will continue, withmarket prices for luxury brand fashion items remaining flat or
steadily increasing. Market prices for sneakers are expected tocontinue their downward trend with the exception of some highlyrare items.

Gross profit high-priced watches and bags, and since corporate sales will account for an
increasing percentage of total sales, we expect the gross profit margin to be
marginsimilar to 3Q of this year.

Operatingincome・SG&A expenses are expected to fall in line with targets, reflecting ongoinginvestment in the human resources that will support future growth, and higher land
rent for new store openings.
・We expect to be able to ensure our target operating income for the full year
thanks to an increase the gross profit margin driven by higher net sales.

36Medium-term management target (Fiscal year ending March 2024 to March 2026)
Operating income, ordinary income, and net income attributable to owners of parent company are expected to achieve their targets for the fiscal year
ending March 2025 one year ahead of schedule.Plans for the fiscal year ending March 2025 and beyond are scheduled to be announced again in May 2024.

FY2024(millions of yen)first half

full year

FY2025

FY2026full year

full year

Scheduled to beannounced again
in May 2024

Net sales

51,000106,000

120,000

140,000

Operating income

3,200

7,200

7,000

8,100

Operating margin

6.3%

6.8%

5.8%

5.8%

Ordinary income

3,250

7,230

7,000

8,100

Net income attributableto owners of parent

2,200

4,820

4,800

5,600

ROE

ー

15% or more

15% or more

15% or more

Capitaladequacyー

50% or more

50% or more

50% or more

EPS（yen）

ー

440

438

511

payout ratioー

Aim for 20%

Aim for 20%

Aim for 20%
37

To expand the customer base, “KOMEHYO Kannon-dori store (tentative name)”
will open in late April 2024
Due to rising sales prices in primary distribution, branded items are becoming difficult to obtain. Against this background, we will
open a store in the well-known Nagoya Osu area that sells used bags and accessories at lower prices than regular retail products.
This store aims to re-promote the appeal of second-hand goods, strengthen retail sales, and expand the customer base.

“KOMEHYO Kannon-dori store (tentative name)”location： 2-chome Osu, Naka-ku, Nagoya, Aichi Prefecture
Contract area： Approximately 700㎡ (Stores are on the first floor only)
Main sales items： brand bags

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Global expansion ①
Supplying good quality used goods leveraging the trust engendered by "Checked by KOMEHYO Group."
In the future, we will aim for overseas sales including e-commerce sales to account for 30% of total sales.
【Planning to expand city】We will expand into major cities and engage in purchasing and sales locally,
employing a local-production-for-local-consumption strategy for business expansion.

Hong Kong

Shanghai

BangkokTaiwanSingapore【New development】We will also establish local subsidiaries and launch business operations in areas wehave not yet expanded into, including North America, East Asia, Southeast Asia and Europe.
39

Global expansion ②
We will roll out the multi-channel and multi-brand strategies of the domestic business globally.
Working from Hong Kong as our base, we will aim to achieve a "re-use value chain" through which goods are distributed globally.

Purchase
Japan (toC・toB）

Hong Kong new company(to be integrated in March 2024,
company name to be determined)

Sale
Hong Kong (toC・toB)【Role】
1．Base for global expansion
The overseas subsidiary and grandchildren will be
the subsidiary of the new Hong Kong company,
and will play a central role in promoting global
deployment.

Global (toC・toB）

2．Expanding business in HK
KOMEHYO, BRAND OFF store operation
Promoting BtoB business in Hong Kong

Hong Kong, Shanghai,
Thailand,Taiwan, Singapore

Other Global (toC・toB）
その他海外 (toC・toB）

Currently operating in Shanghai, Thailand, Taiwan, Singapore, and JapanWe are also considering expanding into unexplored regions such as North
America, East Asia, Southeast Asia, and Europe.

3．Establishment of productcenter function
Taking advantage of Hong Kong's free port advantages,
we collect products purchased from various areas inJapan and overseas.As in Japan, in addition to
performing authenticity checks and maintenance asnecessary, we supply the collected products to themost suitable cities and areas.

※*"KOMEHYO Takashimaya Used Luxury Goods Store" has changed its name to"BRAND OFF", which is highly recognized in Greater China.

40

IR contact
IR・PR Department
Phone：+81-52-249-5366
E-mail：ir@komehyo.co.jp
Note:This document is an English translation of a document prepared in Japanese.
Statements in this document that are not historical facts; statements concerning current plans, forecasts, strategies, and opinions of KOMEHYO
Co., Ltd. are forward-looking statements subject to various risks and uncertainties.
These statements are prepared based on assumptions of the management of Komehyo Holdings Co.,Ltd. using currently available information.
Actual results may differ significantly from forecasts due to a variety of factors; therefore, investors should not place undue reliance upon them.
In addition, this document is not intended to solicit investments. Investors should make investment decisions at their own discretion.

This document was prepared by Komehyo Holdings, Inc. and all rights to its contents are reserved by the Company.
Please refrain from any use (copying, unauthorized reproduction, etc.) beyond the scope permitted by law.

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