For the Three Months of Fiscal YearEnding March 31, 2025

Financial Results Briefing

2024.08.07 UNITED ARROWS LTD.

Table ofContents

P03–

| 1

Overview of FY2025/3 1Q Business Results

P21–

| 2

Progress in Sustainability Initiatives

P30–

| 3

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

P36–

| 4

Reference Materials

Cautionary Statement
Earnings forecasts and descriptions other than objective facts contained in this document are based on decisions made by
UNITED ARROWS LTD. in light of information obtainable as of the date of this report and, therefore, include risks anduncertainties. Actual earnings may differ materially from forecasts due to global economic trends, market conditions andother factors. Investors are asked to refrain from making investment decisions based solely on the information contained inthis document.
Use of Abbreviations
Abbreviations may be used for the following businesses/store brands:

UNITED ARROWS:UABEAUTY&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, STEVEN ALAN, ROKU, BLAMINK, H BEAUTY&YOUTH, ASTRAET, California General Store
Basic Trend-conscious Market
GLR, and CITEN

Click here for Shared
Research Inc. research
report.

Overview of FY2025/3 1Q Business Results

3

Overview of FY2025/3 1Q Business Results

Financial Highlights
Consolidated
Sales and gross profit exceeded the plan and the previous year, SGA expenses were roughly atthe expected level, and operating income and ordinary income also exceeded the plan and theprevious year. Net income attributable to owners of parent fell below the previous year due toan increase in extraordinary losses, including impairment losses associated with the relocation
and renovation of stores of UNITED ARROWS LTD. and impairment losses at COEN CO., LTD., but
still achieved the target.

Gross margin
Slightly below the previous year’s level. This was mainly due to the negative impact of changing
the membership system at UNITED ARROWS LTD., expansion of markdown sales at COEN CO.,LTD., and inventory write-down.

Non-consolidated
Sales, gross profit and all other profits exceeded the targets. Thanks to an aggressive inventory
policy, both retail and online sales increased significantly from the previous year. While
increasing the average spend per customer, the number of customers grew by double digits.
44Overview of FY2025/3 1Q Business Results

Consolidated Sales

Consolidated Gross Margin
YoY¥35,495million 110.4

%

YoY

54.7%

-0.3pt(Millions of yen)

55.0%
29,66422,198

FY21/332,15535,49551.5%

25,264

FY22/3

54.5%

54.7%

43.4%

FY23/3

FY24/3

FY25/3

FY21/3

FY22/3

FY23/3

FY24/3

FY25/3* CHROME HEARTS JP, GK has been excluded from the scope of consolidation since FY21/3 4Q

5Sales were ¥35,495 million, 110.4% YoY.
Gross margin was 54.7%, down 0.3 pts from previous year.

5Overview of FY2025/3 1Q Business Results

Consolidated operating income

Net income attributable to owners of parent¥2,768million 110.6¥1,763million 98.0
YoY

YoY

%

(Millions of yen)

1,853

2,502

(Millions of yen)

1,323

2,768

1,798

1,763

FY24/3

FY25/3

(648)

(903)
(5,019)(3,582)
FY21/3

FY21/3%

FY22/3

FY23/3

FY24/3

FY22/3

FY23/3

FY25/3

6

Operating income came to ¥2,768 million, 110.6% YoY, and 7.8% vs. sales, the same level as previous year.
Ordinary income was ¥2,999 million, 108.4% YoY, and 8.4% vs. sales, down 0.2 pts from previous year.
Net income attributable to owners of parent was ¥1,763 million, 98.0% YoY, and 5.0% vs. sales, down 0.6 pts
from previous year, due to the posting of ¥194 million as extraordinary loss, including impairment losses
associated with the relocation and renovation of stores of UNITED ARROWS LTD. and impairment losses at
COEN CO., LTD.

6

Overview of FY2025/3 1Q Business Results

Consolidated P/L(Millions of yen)

Sales
Gross profit
vs. sales

SGA expenses
vs. sales

Operating income
vs. sales

Non op. P/Lvs. sales

Ordinary income

FY24/33M

FY25/3
3M

Change/pt
difference

YoY

32,15535,4953,340

110.4%

17,67819,412

1,734

109.8%

55.0%

54.7%

- 0.3pt－

15,176

16,644

1,468

109.7%

47.2%

46.9%

- 0.3pt

－

2,502

2,768

266

110.6%

7.8%

7.8%

0.0pt

－

264

230

(33)

87.1%

0.8%

0.6%

- 0.2pt

－

2,766

2,999

232

108.4%

8.6%

0- 0.2pt

－

(34)

(194)

(159)

－

vs. sales

－

－

－

－

Net income attributable to ownersof parent
vs. sales

1,798

1,763

(35)

98.0%

5.6%

5.0%

- 0.6pt－

vs. sales

Extraordinary P/L77

Overview of FY2025/3 1Q Business Results

Consolidated Gross Margin
The business unit carried out markdown sales ahead of schedule, but gross margin for total business unit
remained at the same level as the previous year
The decrease in the non-consolidated gross margin is mainly due to the difference in the exchange rate with theprevious membership system
FY25/33M

YoY
pt difference

Consolidated

54.7%-0.3pt

UNITED ARROWS LTD.

54.9%

-0.1ptTotal business unit

-

0.0pt

Outlet, etc.

-

3.2pt

COEN CO., LTD.

--2.8pt

UNITED ARROWS TAIWAN LTD.

-

1.1pt

Business unit gross margin
Monthly change from previous year
Increase in VIP sale target
numbers brings front-loading
demand for markdown sale
Number of VIP sale target
YoY 157%

0.3pt
0.1pt

-0.5pt
April

May

June
8

Consolidated gross margin was 54.7%, down 0.3 pts from previous year.
Non-consolidated gross margin was 54.9%, down 0.1 pt, including the effects of transfer to UA Club.
Total business unit remained at the same level as the previous year due to strong performance in April andMay, although demand for markdown sales was brought forward by an increase in VIP sale target members
in June.
Outlets improved from the previous year due to the reduction in the amount of past year's inventory
through better inventory efficiency.
COEN CO., LTD. saw a decrease of 2.8 pts from the same period of the previous year due to expansion of
discount price sales and recording product write-down.
The Taiwanese subsidiary improved 1.1 pts.

8

Overview of FY2025/3 1Q Business Results

Consolidated SGA expenses(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

FY24/33M

FY25/3
3M

Change/pt
difference

YoY

15,176

16,644

1,468

109.7%

47.2%

46.9%

-0.3pt

-

720

920

199

127.7%

2.2%

2.6%

0.4pt

-

5,429

108.5%

5,891

462

16.9%

16.6%

-0.3pt

-

4,429

4,665

235

105.3%

13.8%

13.1%

-0.6pt

212

269

56

0.7%

0.8%

0.1pt

-

4,383

4,897

513

111.7%

13.6%

13.8%

0.2pt

-

126.4%

9

SGA expenses were ¥16,644 million, 109.7% YoY, and 46.9% vs. sales, down 0.3 pts YoY.
Advertising expenses were ¥920 million, 127.7 YoY, and 2.6% vs. sales, up 0.4 pt from previous year.
This increase was due to strengthened advertising and promotion aimed at expanding sales, including largescale GLR sales promotions.
Personnel expenses were ¥5,891 million, 108.5% YoY, and 16.6% vs. sales, down 0.3 pts from previous year.
This was due to an increase in the number of employees, an increase in wages, and an increase in bonuses.
Rent was ¥4,665 million, 105.3% YoY, and 13.1% vs. sales, down 0.6 pts from previous year.
This was due to increases in percentage rent as well as commissions on online shopping sites due toincreased sales.
Depreciation was ¥269 million, 126.4% YoY, and 0.8% vs. sales, up 0.1 pt from previous year.
This was due to new store openings and investment in systems.
Others were ¥4,897 million, 111.7% YoY, and 13.8% vs. sales, up 0.2 pts from previous year.
This was due to the increase in costs associated with sales expansion, such as card fees and delivery costs.

9

Overview of FY2025/3 1Q Business Results

Consolidated B/S(Millions of yen)

As of Mar. 31,
2024

Total Assets
Composition ratio

Current Assets
Composition ratio

Noncurrent Assets
Composition ratio

Current Liabilities
Composition ratio

Noncurrent Liabilities

Composition ratio

62,9922,787

100.0%

100.0%--

40,372

42,7342,362

105.9%

425

102.1%

2,472

111.8%

(371)

91.1%

687

102.0%

2,654

1413.9%

67.1%

67.8%

19,831

20,257

32.9%

32.2%

20,99723,469

34.9%

37.3%

4,177

3,805

6.9%

6.0%

35,03035,717

58.2%

56.7%

Reference: Balance of short- and long-term
202loans payable
2,856

As of Jun. 30, 2023 As of Jun. 30, 2024

Reference: Inventory

Change60,204Composition ratio

Total Net Assets

As of Jun. 30, 2024

vs. previous term-end

20,373

21,815104.6%-

vs. 1Q-end of the previous fiscal year

Change1,441

107.1%

10

Total assets were ¥62,992 million, 104.6% YoY.
Current assets were ¥42,734 million, 105.9% YoY.
This was due to increases in cash and deposits, and merchandise and a decrease in accounts receivablesother.
Noncurrent assets were ¥20,257 million, 102.1% YoY.
This was due to increase in property, plant and equipment accompanying the opening of new stores andintangible assets in preparation of core system renewal and decrease in deferred tax assets.
Current liabilities were ¥23,469 million, 111.8% YoY.
This was due to increases in short-term borrowings, income taxes payable, and asset retirement obligations
to be performed within one year, as well as decreases in notes and accounts payable-trade, accounts
payable-other, and provision for bonuses.
Non-current liabilities were ¥3,805 million, 91.1% YoY.
This was due to a reduction by asset retirement obligations that are scheduled to be performed within one
year being transferred to current liabilities.
Total net assets were ¥35,717 million, 102.0% YoY. This was due to an increase in retained earnings and adecrease due to payment of dividends.
The balance of short- and long-term loans payable was ¥2,856 million, 1,413.9% YoY.
Inventory was ¥21,815 million, 107.1% YoY.
This was mainly due to inventory buildup aimed at expanding sales.

10Overview of FY2025/3 1Q Business Results

Consolidated C/F(Millions of yen)

FY24/3 3M

FY25/3 3M

Cash flows from operating activities(sub-total)

(5)

2,470

Cash flows from operating activities(1,040)2,148

Income before income taxes
Increase in other current liabilities
Decrease in trade payables
Decrease in provision for bonuses(818)(1,292)

Purchase of intangible assets
Purchase of property, plant and equipment
Payments of guarantee deposits(656)

Cash flows from investing activities

Net increase in short-term loans payable
Dividends paid

2,654
(983)

Cash flows from financing activities(2,582)

1,670

Cash and cash equivalents at the endof the period

4,111

9,017

Major breakdown of the results for the term

2,804
449
(1,007)
(466)

(444)
(114)

11

Cash flows from operating activities amounted to cash inflow of ¥2,148 million.
Cash flows from investment activities amounted to cash outflow of ¥1,292 million.
Cash flows from financing activities amounted to cash inflow of ¥1,670 million.
Cash and cash equivalents were ¥9,017 million.
Main breakdown of each item is as indicated in the slide.

11

Overview of FY2025/3 1Q Business Results

Non-consolidated Sales

Non-consolidated Gross Margin¥33,117million 110.8% 54.9%
YoY

Difference from previous
period

-0.1ptSales

Number of purchasing
customers(Millions of yen)

33,11729,894

54.9%

50.9%

27,089

54.6%

41.6%

22,919Non-consolidated
Existing Stores YoY

Avg. spend per
customer

113.0%
110.2%
102.4%

55.0%

18,858

FY21/3

FY22/3

FY23/3

FY24/3

FY25/3

FY21/3

FY22/3

FY23/3

FY24/3

FY25/312

Non-consolidated sales were ¥33,117 million, 110.8% YoY.
Non-consolidated gross margin was 54.9%, down 0.1 pt from previous year.
YoY sales for existing stores exceeded the previous year, for both retail and online, with 113.0% for retail +online. The number of purchasing customers at existing stores was 110.2% of previous year, with an increaseof 2.4% in spend per customer from previous year owing to a revision in prices.

12

Overview of FY2025/3 1Q Business Results

Non-consolidated Sales by Channel(Millions of yen)

Non-consolidated
sales
Total business unit
sales
vs. sales
Retailvs. sales

FY24/33M

FY25/3
3M

Change/pt
difference

YoY

29,894

33,1173,223

110.8%

24,742

28,1203,377

113.7%

82.2%

83.0%

0.8pt

-

17,09919,0201,921

111.2%

56.8%

56.2%

- 0.7pt

121.2%

7,085

8,588

1,503

vs. sales

23.6%

25.4%

1.8pt

-

Others (Wholesale,
etc.)

556

510

(46)

91.7%

Onlinevs. sales

Outlet, etc.
vs. sales

1.9%

1.5%

- 0.3pt

-

5,343

5,740

396

107.4%

17.8%

17.0%

- 0.8pt-

Existing stores YoY
Sales

Number ofcustomers

Avg. spendpercustomer

Retail + Online

113.0%

110.2%

102.4%

Retail109.7%

107.3%

102.2%

Online120.6%

115.6%

106.0%

13

Details of non-consolidated sales
Total business unit sales were ¥28,120 million, YoY of 113.7%.
Retails sales were ¥19,020 million, YoY of 111.2%.
Online sales were ¥8,588 million, YoY of 121.2%, and 25.4% vs. sales
Company EC site was doing well at 142.3% against previous year, with online composition ratio of 41.2% (YoY
difference of +6.1 pts).
And the combined sales of other companies' malls were 109.8% of the previous year, with major sites
experiencing growth.
Both retail and online have grown with the penetration of OMO measures.
Regarding YoY for existing stores, as explained earlier, while the avg. spend per customer has increased, thenumber of customers increased significantly.
Outlet, etc. was ¥5,740 million, 107.4% YoY and 17.0% vs. sales.

13Overview of FY2025/3 1Q Business Results

Non-consolidated Sales by Business(Millions of yen)

FY24/33M

FY25/3
3M

ChangeYoY

24,742

28,1203,377

113.7%

Trend-Conscious Market

16,48018,466

1,986

112.1%

Basic Trend-Conscious
Market

8,262

9,653

1,391

116.8%

Retail + Online

RetailOnlineTrend-Conscious Market

112.4%

109.1%

120.8%

Basic Trend-Conscious Market

114.1%

111.1%

120.4%

Total business unit sales

Existing stores YoY

14

In the Trend-conscious market centered on UA and BY, good business was maintained, from recovery in city
centers and from the number of inbound tourists resulting in sales of ¥18,466 million with YoY of 112.1%.
Sales of Basic Trend-conscious market centered on GLR were ¥9,653 million with 116.8% YoY.
Growth was high due to large-scale promotion of Women's and others.
In both markets, sales at retail + online existing stores grew by double digits over the previous year.

14Overview of FY2025/3 1Q Business ResultsGroup Company Results
COEN CO., LTD.

Feb– Apr

2,251

Increase in both sales and profit

2,370(Millions of yen)

2,168

2,179

FY2024FY2025

1,823• Sales ¥2,179 million, YoY 100.5%• Although sales exceeded the previous year’s figure, profits decreased due to a
decline in gross margin, resulting from expansion of markdown sales, andinventory write-downs, as well as an increase in SGA expenses• Sales are improving due to the launch of hot midsummer items. Going forward, itaims for a recovery by introducing popular products and implementing large-scale
promotions

UNITED ARROWS TAIWAN LTD.

FY2021

FY2022

FY2023(Millions of yen)Feb– Apr

396
325

Increase in both sales and profit

258• Sales ¥396 million, YoY 139.9%• UA general stores and online shopping performed well

283

152

• Gross margin also improved, achieving increased sales and profits
FY2021

FY2022

FY2023

FY2024FY202515

15

Overview of FY2025/3 1Q Business Results

Opening and Closing of Stores
Due to some of COEN CO., LTD.'s new store openings being postponed to the next fiscal year, the number of stores at the end of the
fiscal year is expected to be 321, an increase of 20 stores from the end of the previous fiscal year.
1Q results

Full-year forecast

No. of storesat theprevious
period-end

OpenedClosedNo. of storesat the 1Q-end

OpenedClosedNo. of stores at theperiod-end(Forecast)

301

7

0

308

24

4

321

UNITED ARROWS LTD.

221

3

0

224

16

2

235

COEN CO., LTD.

71

3

0

74

5

2

74

UNITED ARROWS TAIWAN LTD.

9

1

0

10

3

0

12

Total Group16

The Group opened a total of seven stores in the first quarter. The number of stores at the end of the firstquarter was 308.
Due to some of COEN CO., LTD.'s new store openings being postponed to the next fiscal year, the number ofstores at the end of the fiscal year is expected to be 321, an increase of 20 stores from the end of theprevious fiscal year.

16Overview of FY2025/3 1Q Business Results

Starting store opening for new businesses
ATTISESSIONconte• A women’s brand targeting the MZ generation• New brand for independent adult women• Appointed a female in her 20’s from BY shop staff as director• Appointed Emiri Henmi as director• Sales started at some stores and on our own EC in
spring/summer 2024

• Online pre-orders and pop-up shops at selected stores started
in August 2024

• Scheduled to open the first store in Tokyo’s Shinjuku area in
September 2024

• Scheduled to open stores in Tokyo’s Aoyama and Shinjuku
areas in September 2024

https://store.united-arrows.co.jp/brand/att/

https://store.united-arrows.co.jp/brand/conte/

17Store opening for the new business will start this fall and winter.
ATTISESSION, a women's brand targeting the MZ generation, is scheduled to open the first store in Tokyo's
Shinjuku area in September.
A new brand, conte for independent adult women, receives online pre-orders and starts pop-up shops atselected stores from August, and is scheduled to open stores in Tokyo's Aoyama and Shinjuku areas in
September.

17

Overview of FY2025/3 1Q Business Results

Direction of new business
Objective of new business is to solve issues towards achieving the long-term vision (age axis, taste axis)

Trend-conscious market

Basic Trend conscious market

50s

50s

40s

40s

New
brand
30s

30s

20s

20s

CasualConservative

Mode

CasualConservative

Mode

18

The purpose of the new business is to solve the issues facing the Company in achieving its long-term vision,
including issues related to age and taste. As shown in the chart on the slide, the aim is to attract customers
with different age and taste profiles from existing major brands in each market. During this Medium-termManagement Plan, we will launch the brands and expand and grow them over the long term.

18

Overview of FY2025/3 1Q Business Results

Scale of assumed sales of new business
Brand

CITEN

ATTISESSIONconte

New brand (TBD)

Introduction timing

Fall 2021

Spring 2024

Fall 2024

Spring 2025

MarketBasic Trend conscious
marketTrend-conscious market

Trend-conscious market

Basic Trend conscious
marketExpansion of age axis

Expansion of age axis

Objective

Assumed scale(mid-20s to early 30s, men andwomen)¥5 billion

Expansion of taste axis

Expansion of taste axis

(20s to early 30s, women)(mode within trend-conscious
market)(casual within basic trend-conscious
market)¥3 billion¥5 billion¥10 billion

19

For each brand, we expect a scale of ¥3 billion to ¥5 billion and ¥10 billion. With these brands, and brands thatwill be developed from now, we aim to achieve a scale of ¥40 billion from new apparel business over the long
term.

19

Overview of FY2025/3 1Q Business Results

Overseas Expansion: UNITED ARROWS EMSPHERE opens• In June 2024, opened a franchise store in “EMSPHERE,” a large shopping mall in Bangkok, Thailand• Sales of men’s clothing made from functional materials were strong, particularly among those in the fashionindustry• The store is frequented not only by domestic customers but also by tourists, and we also see a noticeable numberof customers who learned about the Company at our pop-up store in China• We will continue to study the possibility of opening stores mainly in the ASEAN region, and launched our products
at Lumine Singapore in August 2024

20

We opened a franchise store in Bangkok, Thailand. The store is frequented not only by those in Thailand but
also by tourists, and we also see a noticeable number of customers who visited our pop-up store in China in
the previous fiscal year. The company is considering the possibility of further opening stores in the ASEAN
region, and will begin selling its products at Lumine Singapore in late August 2024.

20

Progress in Sustainability Initiatives

21

Progress in Sustainability Initiatives

History of Our Sustainability
Activities

October 1999 (at the time of listing) to present

Our Commitment: Creating Five Values
Customers, Employees, Business Partners, Society, Shareholders
May 2020 to present

Five Themes and 16 Material Issues
Supply Chain, Resources, Community, Human Resources, Governance
August 2022 to present

Launching SARROWS and Setting Numerical Targets
Circularity, Carbon Neutrality, Humanity

22

22

Progress in Sustainability Initiatives

Departure from an orientation toward sales expansion on the premise of mass production and massconsumption means:“Creating the maximum corporate value with limited resources”= Procuring appropriate amounts of products properly and selling them without waste(improving the ratio of items sold at regular prices• For customers: Forster a sense of trust and reassurance in prices

Approach tosustainability in thelong-term vision• For employees: Increase profit productivity = Improve compensation and engagement• For shareholders: Increase profit distribution as the corporate value increases• For business partners: Protect human rights in the supply chain• For society: Reduce environmental load by controlling disposal, etc.

In addition, the use of environmentally conscious materials, switching to renewable energy, and recycling of waste will

be promoted to achieve sustainability goals

23

23

Progress in Sustainability Initiatives

Sustainability Initiativesof UNITED ARROWS
Circular fashion

Toward a carbon-neutral world

Work and live in a healthy way

Positive impact on the earth

To preserve our beautiful

For every stakeholder of UNITED

with fashion, UNITED ARROWS

earth UNITED ARROWS LTD.

ARROWS LTD. to smile. We will

LTD. aims to create fashion

works to create a carbon-

protect everyone’s rights andthat is in harmony with natureneutral world in line with thecreate a healthy living

and circular over and overParis Agreement, anenvironment.

again.

international framework.
24

24

Progress in Sustainability Initiatives

Circulating fashion

Toward a carbon-neutral world

Work and live healthily

Waste rate of textile products

CO2 emission reduction rate

Acquisition rate of Code of
Conduct Agreements

2022

2023

2022

2023

2030 TARGET

2022

2023

0.3% →

0.03 0.0%

7.3% →

13.4

30.0%

48.2% →

74.4 % 100.0%(Scope 1 and 2)2030 TARGET%%

Waste rate of products

CO2 emission reduction rate

2022

2023

2022

0.4% →

0.08 0.1%(Scope 3)2030 TARGET%

2023

14.5% →

Proportion of eco-friendly
products

2030 TARGET

13.1 15.0%%

Proportion of renewableenergy2022

2023

2030 TARGET

2022

2023

9.8% →

7.6 % 50.0%

8.3% →

12.5%

2030 TARGET

Employee engagement scores(eNPS*)

2022-58.4 →

2023

2030 TARGET-42.0 -40.0

Employee opinion survey
Positive response rate

2030 TARGET

2022

2023

50.0%

70.0% →

74.5 % 80.0%2030 TARGET* eNPS = Employee Net Promoter Score An index that visualizes employee engagement by quantifying the degree of workplace recommendation
Also available for industry comparisons and comparisons with other companies that have already implemented it

25

This page shows results of the previous period for targets based on three items of SARROWS.
Currently, we have set long-term targets based on nine targets and are managing our results.
Due to time constraints, I will not go into the details of individual figures, but in summary, the area in which we
made particular progress in the previous period was the reduction in the waste rate of goods and textile
products in the circularity items. In the previous fiscal year, we made progress in reducing the disposal rate byimproving the ratio of original retail price sales and the ratio of markdown sales, and promoting recycling andothers. As a result, we came close to our long-term target.
Additionally, each of the humanity-related items is also progressing smoothly. With regard to Humanity, we
have started setting targets and disclosing results for eNPS. Since eNPS is not a unique indicator, it is also
possible to compare it with other companies that have adopted it or with the industry average.
On the other hand, there were some areas where we did not see any improvement from the previous year,
such as the ratio of environmentally friendly products and reduction of CO2 emissions.
We aim to achieve our long-term goals by considering and promoting each of these measures.
As for the composition of environment-friendly products and CO2 emissions, we have tightened our approachin calculating them, so we have retroactively calculated results for the previous fiscal year.
In the future, there may be changes to the figures already disclosed, but we believe it is important to holddiscussions with stakeholders by disclosing actual figures. We would appreciate your understanding.

25

Progress in Sustainability Initiatives

Continuing efforts• Improvement of the fixed-price-sales ratio (the ratio of original retailprice) and inventory turnover ratio
Circulating fashion

Waste rate of textile products
2022

2023

2030 TARGET

0.3% →

0.03 0.0%• Reducing product waste rates through recycling, reuse, etc.
Initiatives for fiscal 2022

• Establishing in-house standards for environmentally friendly products(SARROWS tree)%

Waste rate of products
2022

2023

0.4% →

0.08 0.1%2030 TARGET

Initiatives for fiscal 2023
• Preparation for the use of eco-friendly materials across businesses• Reducing waste by improving the flow of determining damaged products%

Proportion of eco-friendly
products
2030 TARGET

2022

2023

9.8% →

7.6 % 50.0%

Initiatives in the current period and future• Maintain product waste rate
• In addition to expanding the range of products made fromenvironmentally friendly materials, pursue “circulating fashion” by
expanding reuse, repair, etc.
26

From this page, we will explain our main initiatives in the three areas of SARROWS.
The slides contain information on initiatives beyond fiscal 2022, when SARROWS’ long-term goals wereannounced, but I will briefly explain the initiatives for the previous fiscal year 2023, the current fiscal year,and going forward.
First, about circularity.
In the previous fiscal year, we prepared for the use of environment-friendly products across our business.
Furthermore, we were able to reduce waste rates by reviewing the process for determining damaged
products and expanding the recycling of textile products.
Regarding our initiatives for this fiscal year and beyond, we aim to maintain our product disposal rate,
which has already nearly achieved our long-term target. In addition to expanding our lineup ofenvironmentally friendly products, we will also expand our reuse and repair services in our pursuit of"circular fashion."26

Progress in Sustainability Initiatives

Continuing efforts• Conduct a survey on the energy situation at commercial facilities where
our shops are open and discuss the future use of renewable energy
Toward a carbon-neutral world

CO2 emission reduction rate
(Scope 1 and 2)

2022

2023

7.3% →

13.4

2030 TARGET
%

30.0%

• Promoting “SARROWS Reduce Action,” an initiative to cultivate abundantforests
Initiatives for fiscal 2022
• Applying for and obtaining SBT accreditation• Calculation of the carbon footprint of products
Initiatives for fiscal 2023

CO2 emission reduction rate
(Scope 3)

2022

2023

14.5% →

2030 TARGET

13.1 15.0%%• Regarding TCFD scenario analysis, a partial quantification ofbusiness impact assessment and description of calculation basis• Obtained a B rating in the CDP climate change category (previous
year: D rating)
Initiatives in the current period and future

Proportion of renewableenergy2022

2023

8.3% →

12.5

2030 TARGET
%

50.0%

• Obtaining third-party assurance for GHG calculations (Scope 1, 2, 3)• Promoting renewable energy use in stores through further collaboration
with commercial facilities where our stores are open
• Reducing Scope 3 GHG emissions through more precise calculations
27

Next, I would like to explain carbon neutrality.
In the previous fiscal year, we conducted TCFD scenario analysis and provided a description of some of thequantification of business impact assessments and the basis for calculations.
Furthermore, these efforts helped us receive a B rating in the climate change category from CDP.
Regarding our initiatives for this fiscal year and beyond, we will first obtain third-party assurance for our
GHG calculations.
Additionally, we will work to further promote the use of renewable energy in our stores through further
collaboration with the commercial facilities in which we operate.
Furthermore, for the next fiscal year, we aim to reduce Scope 3 GHG emissions by refining our calculations.

27

Progress in Sustainability Initiatives

Continuing efforts• Continue to conduct on-site audits at domestic partner factories• Promoting various personnel measures to improve employee engagement
Work and live healthily

Acquisition rate of Code of
Conduct Agreements
2022

2023

48.2% →

Initiatives for fiscal 2022
• Start of on-site audits at domestic partner factories

2030 TARGET• Formulation and disclosure of UA Group human rights policy

74.4 % 100.0%

Initiatives for fiscal 2023
Employee engagement scores(eNPS)
2022

2023-58.4 →

-42.0 -40.0
2023

70.0% →

• Identification and mapping of human rights issues

2030 TARGET

Employee opinion survey
Positive response rate
2022

• Steady increase in female managers (to 26.9% from 22.4%)• Roadmap development and goal-setting for partner factory audits
Initiatives in the current period and future2030 TARGET

74.5 % 80.0%• Disclosure of eNPS (Employee Net Promoter Score) in the SARROWS
Humanity field• Formulation and disclosure of a roadmap for dealing with human rights
risks in the supply chain
28

Next, I will explain about humanity.
In the previous term, we identified and mapped human rights issues, and developed a roadmap and set
goals for auditing partner factories. As for internal initiatives, the ratio of female managers which we arepromoting is steadily increasing.
Regarding our initiatives for this fiscal year and going forward, first of all, we have added eNPS to ourdisclosure indicators.
In addition, the roadmap for addressing human rights risks in the supply chain that we have developed will
be disclosed in our Integrated Report 2024, scheduled to be published at the end of August.

28

Progress in Sustainability Initiatives

In fiscal 2023, the Sustainability Committee met 10 times andthe Sustainability Subcommittee of the Risk Management Committee met 3 times• Both committees are chaired by the Representative Director and have
Executive Directors as members• The Sustainability Committee mainly discussed the three themes of SARROWS,
and the Sustainability Subcommittee of the Risk Management Committee
mainly discussed human rights risks
Selected as a component stock for three of the six domestic ESG indexes adopted
by the Government Pension Investment Fund (GPIF)

Report on othersustainability promotion
activities
Support for disaster areas and communities• In response to the 2024 Noto Peninsula Earthquake, a total of 200 items ofclothing, mainly winter clothing (outerwear), were donated through the“Flying Medical Search Team ARROWS”

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

29

Finally, I would like to introduce some topics regarding other sustainability promotion activities.
First, about the Sustainability Committee. Since April 2020, we have held a Sustainability Committee,
chaired by the Representative Director. The Risk Management Committee also discusses sustainability
risk management in particular. In the previous fiscal year, the Sustainability Committee met 10 times andthe Sustainability Subcommittee of the Risk Management Committee met 3 times for various deliberations.
Next, I would like to introduce an external evaluation. The Company has been selected for inclusion inthree of the six ESG indices for domestic stocks adopted by GPIF. As for the MSCI Japan ESG SelectLeaders Index, although the Company had been included, it was discovered that it had been temporarily
removed, possibly due to violating the market capitalization criteria. However, with the recent recovery instock prices, it is highly likely that the Company will be included again.
Finally, in terms of support for the affected communities, we will talk about support for the Noto Peninsula
earthquake. However, as this has already been explained in a previous briefing, I will not go into detail here.
This concludes our introduction to the results and efforts made in the previous fiscal year regarding the
SARROWS goals. We would like to continue working to solve social issues, which will lead to the creation ofbusiness opportunities and increased corporate value. We would appreciate your continued support.

29

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

30

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

1Q Favorable Factors

Non-consolidated By business Existing stores YoY

Pricing strategies optimized for market
characteristics
Trend-conscious market:
Increase in the number of customers while raising the
avg. spend per customer

114.1%
104.5%

Number of customers

Avg. spend per customer

Basic Trend conscious market:
Significant increase in the number of customers while
maintaining the avg. spend per customer

Increase sales through active inventory
procurement

112.4%

Sales

110.9%
104.4%
100.2%
Trend-conscious market

Basic trend-conscious market* Sales are Retail + Online, and the number of customers and avg. spend per customer
are based on physical retail sales

Retail existing store sales YoY• Proactively procure inventory after improving productappealSpring/Summer inventory
procurement volume YoY(New procurement + Carried goods)• Growth in both retail and online sales, especiallyresulting in lost sales opportunities for online sales

About

113

%

109.7

%

Online existing store sales YoY

120.6

%
31

As explained earlier, the first quarter started very well.
For this spring and summer season, while the cost rate continued to worsen due to the weak yen, we increased sales byimplementing pricing strategies suited to the characteristics of both the trend-conscious market and the basic trendconscious market.
For the trend-conscious market, we have reviewed our plans to increase sales prices, based on the judgment that priceincreases accompanied by improvements in quality would be acceptable. As a result, we have increased both the avg.
spend per customer and the number of customers, achieving double-digit growth in sales at existing stores.
On the other hand, in the basic trend-conscious market, we have decided not to raise sales prices since there are many
people looking for reasonably priced products. Although the cost rate of goods sold deteriorated slightly from theprevious year, an improvement in the ratio of original retail price and a large increase in the number of customers enabled
us to achieve double-digit growth in sales at existing stores. For fall/winter products, we will continue to implement
pricing strategies that are tailored to the characteristics of each market.
Next is inventory policy. Until the previous fiscal year, we placed emphasis on inventory efficiency in an effort to moveaway from reliance on markdown sales, and tended to restrict inventory procurement, which resulted in a certain degreeof loss of sales opportunities. For the current fiscal year, we are proactively procuring inventory on the premise that wewill improve product appeal and increase the hit rate. For this spring and summer, we have approximately 113% of theinventory we had last year. As a result, sales at both physical stores and online sales increased significantly, and inparticular, online sales, for which there was a significant loss of opportunity in the previous year, grew by more than 20%
in existing stores.
At the end of 1Q, inventories (inventory value) were controlled to around 107% of the same period of the previous year,
and both regular sales and markdown sales were strong in July, and we believe that active inventory procurement was
successful. In fall and winter, we plan to secure more than 110% of the previous year's inventory and aim for continued
high sales growth.

31

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

1Q Favorable Factors
Recovery of GLR Women through product promotion “Conclusion” series
1Q GLR Women’s
Retail + online existing store sales YoY

123.6

%

• As a conclusion to the idea of “clothes that won’t disappoint,” we have created three items that customers canpurchase with confidence• Promotional activities linked to the web, in-store and social media, with a TV commercial featuring MEGUMI at
the core• Utilizing mass media to increase brand awareness and acquire newcustomers. Approximately 7% of purchasers of these items are
new UA Club members• A similar campaign will be launched in the fall and winter, and weare considering applying the same success story to men’s andchildren’s products
From the left, knee-high flare pants ¥11,000, hidden cardigan ¥7,920,
all-around blouse ¥8,910 (all prices include tax)

32

Next is the recovery of GLR. GLR, which showed sluggish growth in the previous fiscal year, performed
extremely well, partly due to the revision of the pricing strategy and inventory policy I explained earlier. In
particular, sales of Women's products have grown significantly through the implementation of the"Conclusion (Ketsuron)" series of large-scale promotions.
While there are customers who want to show their individuality in fashion, there is a need for customers whowant to make unmistakable choices in terms of quality, design and trends, and who want to buy clothes thatwill not fail to impress and will be considered fashionable by everyone. In GLR, we have persuasively
presented the answer to the fashion trend for such customers using the campaign keyword "conclusion,"and have created three items—pants, a cardigan, and a blouse—that are packed with many special features,such as beautiful-looking materials, silhouettes with a focus on patterns, versatility, and a wide range ofcolors. With the aim of reaching not only existing customers but also new ones, we hired actress MEGUMI,
who is popular among women as someone who can give customers a push, and launched a large-scale
promotion that combined TV commercials, social media, in-store displays, and more. As a result, GLR
Women's sales at existing stores grew significantly, by 123.6% year-on-year. Approximately 7% of those whopurchased the relevant products became new UA Club members through this promotion, which not only
revitalizes existing customers but also leads to the development of new customers. A similar promotion isplanned for fall and winter, and we would like to apply this success story to men's and children's clothing.

32

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

1Q Favorable Factors
Increase in UA Club member sales, penetration of OMO measures
Number of active members at end
of 1Q

1.4

million(YoY 105.5%)

UA Club membership sales

UA Club membership sales

¥17.9

54.2

Percentage of F2 and above
members

Number of cross users

billion(YoY 120.2%)

composition ratio (Non-consolidated)%(YoY change: 4.2 pts)

* Members who purchased within one year

Membership retention rate

55.0

%

(YoY change: 0.7 pts)
* Percentage of members who purchased for two
consecutive years

49.8

%

(YoY 1.0 pt)* Percentage of members who purchased morethan twice a year

19

0,000

(YoY 114.3%)* Members who use both physical stores and ouronline site

The system was partially revised on August 1, 2024, to change to a system that increases
opportunities for use of physical stores and the company’s own e-commerce site and improves
lifetime value (LTV)33

Next is the increase in UA Club membership sales and the penetration of OMO measures. A year has passed
since the transition to the UA Club, and various indicators have improved. The number of active members
was 1.4 million, 105.5% of the same period last year, and sales from members reached ¥17.9 billion, 120.2% of
the previous year, and the composition ratio of non-consolidated sales was 54.2%, up 4.2 percentage points.
The percentage of members who make purchases for two consecutive years and the percentage ofmembers who make purchases at least twice a year, which are KPIs for improving lifetime value, are also
increasing. The number of cross-users who use both physical stores and our e-commerce site also reached
190,000, up 14.3% from the same period last year. As of August 1, 2024, we have partially revised the mileage
system so that more miles can be used for shopping. We aim to increase the number of opportunities for useof our physical stores and our own e-commerce to further improve the lifetime value.

33

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

1Q Favorable Factors
Increase in inbound sales
1Q Inbound Sales(Non-consolidated)¥1.32

Inbound Composition Ratio

billion(YoY 163.3%)• Purchasing mainly from China, Taiwan, South Korea andthe U.S.
• Aoyama, Shibuya, Roppongi, and Shinsaibashi areas havelarge sales• In addition to UA and BY, there is also high demand forsmall, highly original brands such as H Beauty&youth,
ASTRAET, and LOEFF• The results of the analysis were reflected in the productlineup at stores with a high ratio of inbound tourists and inoverseas expansion• We are also working to attract customers from overseas

4.0%(YoY change: 1.3 pts)
Non-consolidated Inbound sales
Changes in composition ratio(Millions of yen)
500

5.0%

400

4.0%

300

3.0%

200

2.0%

100

1.0%

0

2023/1

5

6

7

8

9

10

Inbound sales

1112

2024/1

2

3

4

5

6

0.0%

Composition ratio

34

Finally, inbound sales growth. As shown in the graph on the slide, inbound sales have been growing steadily
since the previous fiscal year, with non-consolidated inbound sales in the first quarter reaching ¥1.32 billion,
163.3% of the previous year, and the sales composition ratio reaching 4%, up 1.3 percentage points from theprevious year. Inbound sales continued to grow in July, and this trend is expected to continue. By nationality,
most customers are from China, Taiwan, South Korea, and the United States, and by area, store sales arehigh in Aoyama, Shibuya, Roppongi, and Shinsaibashi. In addition to our core UA and BY products, one of our
features is that there is high demand for small, highly original brands such as H Beauty&Youth, ASTRAET, and
LOEFF. This data will be used to improve product lineups in stores with a high proportion of inbound tourists
and for overseas expansion. Many of our customers come back to us as repeat customers, and we are taking
measures to attract more foreign visitors.
These favorable factors are not temporary, but will continue into the future. Although this is an ambitious
sales plan, we will continue to deepen our efforts to achieve it.

34

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

Three Key Strategies

providing excitement - connecting with customers
widely and deeply

35

35Reference Materials

36Reference Materials

Consolidated Business Plan
(Millions of yen)

Sales

¥150,000 million (YoY 111.7%)

Gross margin

52.5% (pt difference 0.8pt)

Operating income¥7,300 million vs. sales 4.9%
(YoY 108.3%, pt difference -0.2pt)

Ordinary income
Net income forthe term
Annual dividend
Payout ratio

Sales

FY25/3
Plan

134,269

150,000

15,730111.7%

69,462

78,7909,327

113.4%

51.7%

52.5%

0.8pt

-

62,722

71,4908,767

114.0%

Gross profit
vs. sales

SGA expenses
vs. sales¥7,985 million, vs. sales 5.3%

Operating income(YoY 106.7%, pt difference -0.3pt)

Non op. P/L¥4,145 million vs. sales 2.8%

FY24/3Results

vs. salesvs. sales

Ordinary income
vs. sales(YoY 85.0%. pt difference -0.9pt)

Extraordinary P/L¥55.00 (interim: ¥17.00, end of term ¥38.00) Net income attributable to owners
vs. sales

36.6%

of parent for the termvs. sales

YoYchange/vs. sales pt difference

46.7%

47.7%

0.9pt

-

6,740

7,300

559

108.3%

5.0%

4.9%-0.2pt

-

746

685

-61

91.7%

0.6%

0.5%

-0.1pt

-

7,486

7,985

498

106.7%

5.6%

5.3%-0.3pt-(331)(1,157)

(825)

-

-

-

-

-

4,876

4,145

(731)

85.0%

3.6%

2.8%

-0.9pt-37

Consolidated performance forecast for FY2025/3 issales of ¥150,000 million, and 111.7% YoY.
Gross margin of 52.5%, and up 0.8pt from previous year.
Gross margin is expected to improve from the previous year in both 1H and 2H.
SGA expenses to be ¥71,490 million, 114.0% YoY, and 47.7% vs. sales, increase of 0.9pt from previous year.
Increase in advertising expenses from aggressive sales promotion measures, and increase in personnel
expenses through wage increases and hiring enhancement.
Increase in temporary expenses and depreciation associated with expansion of store openings and increasein various expenses accompanying relocation of HQ office.
Operating income will be ¥7,300 million, 108.3% YoY and 4.9% vs. sales, a fall of 0.2pt from previous year.
Ordinary income to be ¥7,985 million, 106.7% YoY, and 5.3% vs. sales, a fall of 0.3pt from previous year.
This will be mainly from planned recording of extraordinary loss of ¥1,157 million for impairment loss of COEN
CO., LTD.,and net income attributable to owners of parent is expected to be ¥4,145 million yen, and 85.0% YoY.
As for dividends, interim dividend of ¥17 and year-end dividend of ¥38, totaling ¥55 is forecast with a payout
ratio of 36.6%.

37

Reference Materials

Gross Margin Plan

FY25/3
1H

YoY

FY25/3
2H

YoY

FY25/3full term

YoY

Consolidated

53.0%

0.6pt

52.1%

1.0pt

52.5%

0.8pt

UNITED ARROWS LTD.

52.8%

0.7pt

51.8%

0.8pt

52.2%

0.8pt

Total of business units sales

-

0.6pt

-

0.6pt

-

0.6pt

Outlet, etc.

-

1.6pt

-

0.9pt

-

1.2pt

COEN CO., LTD.

-

0.3pt

-

2.5pt

-

1.4pt

UNITED ARROWS TAIWAN LTD.

-

-0.0pt--0.6pt--0.3pt38

Gross margin is expected to improve on a consolidated and non-consolidated basis, and for COEN CO., LTD.,for both 1H and 2H compared with previous year.
On a non-consolidated basis, improvements are expected for both total of business unit sales and outlet.

38

Reference Materials

Non-consolidated Sales Plan

(Millions of yen)YoY

FY25/32H

60,405108.4%

Retail + Online existing
stores-Retail existing stores
Online existing stores

Non-consolidated sales

FY25/3
1H

YoY

FY25/3full term

YoY

76,527112.6%

136,933

110.7%

109.6%-

109.8%-

109.7%-

106.0%-

106.7%-

106.4%-

117.3%-

116.1%-

116.6%

39

Non-consolidated sales are expected to be ¥136,933 million, 110.7% YoY.
Sales of existing retail + online store is expected to be 109.7% for the whole term, with 106.4% for retail and116.6% for online.

39Reference Materials

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
FY2024/3 Results

Sales YoY

Full year: -0.9pt, 4Q: -1.0pt

Gross margin

Full year: -0.1pt, 4Q: -0.1pt

SGA expenses¥390 million recorded as advertising expenses in 2Q

FY2025/3 Forecast
Around -1.0pt has been incorporated into the planned figures for April–July of this term as impact on YoY sales
stemming from the difference in redemption rate. Conversely, for 2H of this term, about +0.8pt has been

incorporated in YoY sales as reaction to the temporary negative effects generated in the previous year.

40

As explained in the previous earnings briefing, there has been a temporary impact on our finances,accompanying the transfer of members to UA Club.
We exchanged the unused points held by our customers in the previous membership program into miles inAugust 2023 and awarded them to the said members when they transferred into the UA Club. Due to thedifference in redemption rate between the systems, conversion from former points into miles resulted in an
increase in the amount.
Assuming that this increase will be used from now, we have booked part of the said amount as a reserve for
future discount into sales promotion expenses in 2Q FY24. After September, this will be recorded as discounton sales, in accordance with the use of the additional provision.
The impact from this process in 1H has been around -0.9pt for the whole term against YoY sales, and about 1.0pt in 4Q. In terms of gross margin, the impact has been -0.1pt for the whole term, and -0.1pt for 4Q.
Due to difference in redemption rate between the former points system and current UA Club, the degree of
reduction in sales amount in accordance with revenue recognition standard has widened.
The former points system was used from April through July during the previous term and thereafter UA Club
was in effect from August. Around -1.0pt has been incorporated into the planned figures for April–July of thisterm as impact on YoY sales stemming from the difference in redemption rate. Conversely, for 2H of this term,
about 0.8pt has been incorporated in YoY sales as reaction to the temporary negative effects generated in
the previous year.

40Reference Materials

UNITED ARROWS LTD. Retail Store Opening and Closing
1Q results

Full-year forecast

No. ofstores at
FY24/3end

OpenedClosedNo. ofstores at
the 1Q-end

OpenedClosedNo. of stores atthe period-end(Forecast)

221

3

0

224

16

2

235

103

1

0

104

8

0

111

UNITED ARROWS (General Merchandise Store)

14

1

0

15

2

0

16

UNITED ARROWS

25

0

0

25

0

0

25

BEAUTY&YOUTH

36

0

0

36

2

0

38

Other

28

0

0

28

4

0

32

91

2

0

93

7

1

97

Green label relaxing

85

2

0

87

5

1

89

Other

6

0

0

6

1

0

7

27

0

0

27

1

1

27

UNITED ARROWS LTD. Total
Trend-conscious Market Total

Basic Trend-conscious Market Total

Outlet4141