Q&A for the Financial Results for the Cumulative Third Quarter of
the Fiscal Year Ending October 31, 2024
We have provided this Q&A as a reference for questions you may have regarding the financial
results disclosed today for the cumulative third quarter of the fiscal year ending October 31, 2024.

Q1: Compared to the same period of the previous year, these sales and profits have increased
significantly for the nine months ended July 31,2024. However, why were the sales increased
and the profits decreased in this third quarter?
A1: The number of customers remained unchanged before and after the price revision implemented
in July, and existing stores continued to perform well. However, due to an increase in the paceof opening new company-owned stores and the active renovation of existing stores, one-timeexpenses increased. As a result, in the third quarter of the current fiscal year, sales increased
and profits decreased year on year. Excluding one-time expenses, operating profit increased
17.3% year on year amounting to +¥99 million. (Please refer to pages 3, 6, 7, 8, and 9 of theResults Briefing Materials for more details.)
Main items
Operating profit
New storerelated costs

Refurbishing
related costs

3Q in FYE Oct.
31, 2023
577--(Unit: Millions of yen)
Main reasons for change

3Q in FYE Oct. Change
31, 2024
519(57)* (89)(89) Costs increased
compared to the previous
fiscal year due to a fasterpace of new store
opening (one-timeexpenses)* (68)(68) Increase in closedown
period and increase insupplies expenses, etc.
due to an increase inrefurbished stores (onetime expenses)
677+99

Operating profit
577excluding onetime expenses* Excludes one-time expenses incurred during 3Q in FYE Oct. 31, 2023.
** New stores are defined as stores within three months of opening.

Q2: Please explain why you are refurbishing your stores. Please also explain the reason for
accelerating the pace of refurbishing.
A2: Based on our internal assessment, we observed that maintaining soup at a consistent warming
temperature resulted in more consistent soup quality. When keeping soup warm, cooking withinduction heating (IH) can more easily keep soup at a constant temperature compared to cookwith gas and also reduces CO2 emissions (approx. 10%). Therefore, we are advancing theintroduction of IH. For our leading brand “Machida Shoten,” IH will be used in any new stores,
and we are sequentially refurbishing existing stores to introduce IH and a new layout. We aim
to improve the consistency of soup quality through cooking with IH and to enhance productivity
through the new layout.
In addition, it is necessary to increase the power usage capacity of each store to introduce IH.
To increase the power usage capacity, it is necessary to apply and obtain permission from thepower company. However, due to the recent power shortages, permission is not always
granted, and it is necessary to communicate back and forth with the power company several
times. we have been discussing with the power company for increased power usage capacity,
and we have accelerated the pace of refurbishing because permission was granted all at oncein the second half of the current fiscal year. (Please refer to pages 7 and 8 of the Results
Briefing Materials for more details.)

Q3: Regarding the price revisions implemented in July 2024, what was the reason for the revision,
the revision amount, and the subsequent impact on customer traffic?
A3: On July 1, 2024, we increased the prices of all our brands by an average of around 50 yen(approx. 5%). After the revision, there has been no negative impact on customer traffic, withcustomer numbers higher than the previous fiscal year.
We operate under the policy of revising prices to absorb increased operational costs. Since
July, we have revised our prices in response to expected significant increases in food prices(especially pork, rice, and seaweed), labor costs (increase in minimum wage by Japanese
government), and utilities expenses (end of measures to mitigate drastic change, increase inlevy for renewable energies, the establishment of capacity contribution). (Please refer to page 9of the Results Briefing Materials for more details.)

Q4: Could you describe the progress for the opening of stores?
A4: During the nine months ended July 31, 2024, there was a net increase of 52 company-owned
and franchise & produced stores as progress was slightly behind the annual target (annual net
increase target: 87 stores). However, the pace of store openings is increasing, with a netincrease of 12 company-owned stores in the third quarter of the current fiscal year.
Furthermore, we are making steady progress in opening stores managed by KOURAKUENHOLDINGS CORPORATION and to catch up with our annual store opening plan. (Please referto pages 16, 17 and 18 of the Results Briefing Materials for more details.)

Q5: Could you describe the progress status for securing personnel?
A5: We are implementing or planning various measures to secure personnel, and these measures
are gradually having positive effects. We have updated the recruitment website and increased
wages in January 2024. Sixteen casts (part-time and casual employees) have joined thecompany as regular employees in the first nine months of the current fiscal year. We have alsooffered jobs to 10 people in overseas recruitment and are conducting training at local Japanese
schools.
In addition, the retirement rate (annualized) is on a downward trend, falling from 18.3% to16.1% compared to the previous year in the first nine months of the current fiscal year, adecrease of about 2%. We will continue to work on reducing the retirement rate (balancing
comfortable work with rewarding work) and strengthening our recruitment capability (increasing
the number of job applicants and rate of job offers). (Please refer to page 11 of the Results
Briefing Materials for more details.)
End