8173.T

• JT-2025 (previous mid-term plan) Retrospective: All targets except payout ratio are expected to end unmet, driven primarily by large operating profit misses. The core issue was that growth in selling, general and administrative costs outpaced gross profit gains, caused by falling customer traffic leading to weak home appliance sales. Lower-margin non-home appliance products grew as a share of sales, pulling down overall gross margin. - New JT-2028 Mid-Term Plan (2026-2028) Strategic Direction: The plan focuses on moving from the 'shu (preserve)' to 'ha (break)' phase of the company's shu-ha-ri transformation: preserving the founding spirit and home appliance core, evolving to a new 'local neighborhood electronics store for the mass retail era' model that combines mass retail's wide selection and scale with local stores' personalized service and agility. The company will rebrand to Joshin Inc. in April 2026 to reflect this transformation, and targets becoming a lifestyle support company building a regional Joshin economic circle across physical stores, e-commerce, and service infrastructure. - Key Strategic Priorities for JT-2028: 1. Physical store profitability improvement (top priority): The company operates 210 directly owned Joshin stores as of September 2025, with widening profit gaps between locations. Instead of expanding total store count, the company will focus on expanding the number of profitable stores, implement type-specific marketing and store layouts tailored to each location's customer base, and pursue store value reconstruction including cross-industry collaborations. 2. Full-scale expansion of private brand (PB) products: PB currently accounts for 3% of total sales focused on personal computers; the company will scale PB development leveraging customer data and existing touchpoints to improve profitability. 3. Marketing function reconstruction: The company will focus on growing both customer count and repeat visit frequency to increase lifetime customer value, addressing the core problem of declining customer numbers from the previous plan. - Capital Policy: 1. The company will improve cash conversion cycle and inventory turnover, with proper inventory management as the core priority, in preparation for the upcoming lease accounting standard changes. 2. Introduces return on equity (DOE) as a new shareholder return metric alongside the existing payout ratio, to deliver stable, sustainable dividends, and targets growing dividend amounts over time as profitability improves. 3. Will formalize and accelerate the reduction of strategically held stocks, with existing holdings currently carry unrealized gains that will boost ROE when divested. 4. The top priority for JT-2028 is improving PBR (currently around 0.6x) through higher profitability, more efficient asset use, enhanced shareholder returns, and portfolio restructuring. - Governance Update: The company transitioned to an Audit & Supervisory Committee structure in June 2025, to speed up decision making through greater delegation of authority to executive officers, and support more active discussion of mid to long-term growth strategy at the board level.

• Full year FY2025 guidance is maintained unchanged, following a stronger than expected first half performance. - As a result of maintaining full year guidance, second half FY2025 guidance is revised downward from the initial forecast, but management targets delivering a second half result above the revised lower forecast. - For the JT-2028 mid-term plan (2026-2028), management has set only two public targets: annual operating profit of 10 billion yen or more, and ROE of 7.0% or more, to prioritize profitability over top-line growth. Management expects accelerated profit growth through the 3-year plan, with full growth achieved by the final 2028 fiscal year.

1. Store-based retail: In the first half (April-September 2025), store sales achieved the 3rd highest first half result in company history, with same-store sales ranking 2nd highest ever after the 2020 record, growing year-over-year. Driven by the Hanshin Tigers League Championship Sale in September, consolidated first half sales returned to the 200 billion yen level for the first time since 2021. 2. Internet (e-commerce) retail: E-commerce sales achieved the 2nd highest first half result in company history, growing year-over-year, following continued expansion of sales on third-party marketplace platforms alongside the company's own website starting from H2 FY2024. 3. Product category performance: All product categories except refrigerators exceeded prior year first half sales. Core home appliances saw a slight year-over-year sales increase, though have trended downward overall since the 2020 record high. Mobile phones, positioned as a growth business, has expanded sales steadily year-over-year.

• Operating in an uncertain, volatile global and domestic market environment, with unpredictable shifts in supplier production and consumer demand that create unquantifiable downside risks to performance. - Persistent upward pressure on labor and other operating costs, which will continue to pressure margins unless sufficient gross profit growth is achieved. - Widening profitability gaps between physical store locations, which requires urgent restructuring to avoid dragging down overall group returns. - The prior mid-term plan failed to meet core profitability targets, so the new plan requires addressing underlying structural issues that have not yet been proven solvable.

Q: Why does the new mid-term plan only set targets for operating profit and ROE, with no public targets for revenue, gross margin, or equity ratio? / A: The plan's core goal is to hit a PBR of 1x, which requires reliably achieving the targeted ROE. Setting public revenue growth targets can incentivize excessive spending that erodes operating profit, so management chose to focus the public plan on the final profitability outcomes. Internal targets for revenue, gross profit, and SG&A are already set internally, and will be managed in combination to deliver the final operating profit and ROE targets.

Q: What is the background for not including share buybacks in the formal shareholder return policy? / A: The company only has 28 million outstanding shares, far smaller than most peer retailers which have over 100 million shares, so making a multi-year public commitment to buybacks does not fit the company's current capital structure. Management confirms that share buybacks remain a valid option for shareholder return, and will be evaluated on a case-by-case basis (with a buyback executed last year), with prompt disclosure when any buyback is implemented.

Q: What types of M&A or partnerships is the company targeting for business expansion? / A: There are no specific targets currently. Management will actively pursue M&A or partnerships that fill gaps in the company's existing resources. Priorities include expanding logistics and installation capacity, and accelerating growth in the still nascent home renovation business. Any opportunity that helps the company close capability gaps and speed up growth will be considered.

Q: How large was the impact of the Hanshin Tigers Championship Sale, and how did it compare to the prior 2023 sale? / A: September 2025 sales were 135.8% of the prior year September, compared to 106% in August 2025. Unlike the 2023 sale, which saw October sales fall to 92% of prior year, October 2025 sales came in at 113.3% of prior year, meaning the sale avoided post-sale demand pullback. Active membership hit a new record high in September and October, so the sale was a clear success, adding incremental demand rather than just pulling forward future purchases.