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Overall Mid-Term Plan Progress

• AOKI's 3-year mid-term plan "RISING2026" aims to achieve sustainable growth through business innovation covering consumers' entire life stages, with the current fiscal year as the second year of the plan.
• After revision, full-year revenue and operating profit are still projected to exceed the original mid-term plan targets. ROE exceeded the cost of equity in FY2024, and PBR rose above 1.0x at the end of the interim period after sustained sub-1.0x levels, driven by improved profitability and enhanced shareholder returns.
• Capital allocation is on track: operating cash flow is higher than projected due to outperformance of top and bottom-line results. Capital spending for Entertainment and Bridal businesses is roughly on plan, while Fashion business capex exceeds plan due to more existing store renovations than originally budgeted.

Shareholder Return Policy

• During the mid-term plan period, AOKI targets a higher of 50%+ payout ratio or 3%+ DOE, with a 70%+ average total payout ratio over the 3-year plan period.
• For FY2026, the interim dividend is maintained at 20 yen per share, the full-year dividend remains 80 yen per share (20 yen interim + 60 yen year-end), with total payout ratio projected at ~70%, aligned with policy.

Segment Strategic Initiatives

• Fashion Business: The core strategy is transforming the existing business model, focusing on store, product and DX initiatives. AOKI Ginza Main Store was fully renovated to expand casual and women's wear floor space; the company reaffirmed its target 40% business wear / 30% casual / 30% women's wear sales mix, and plans to renovate 200 existing stores (40% of the store base) by FY2028. ORIHICA continues planned new openings targeting a 200-store network, with flagship store renovations to update its brand image.
• Entertainment Business: The strategy focuses on evolving store models and expanding customer demographics across three formats. Kaihatsu CLUB continues opening 20-30 new locked private room urban stores annually, which drive higher average check, improved margins and broader customer appeal. Cote d'Azur opened its first new store in 7 years with added non-karaoke content (darts, billiards) to expand customer base. FiT24 now has 114 locations, average members per store are 1.25x higher than at the start of the mid-term plan, and achieved record interim revenue and profit.
• Anniversaire Bridal Business: Against a shrinking market, the strategy focuses on improving brand value and expanding non-wedding corporate banquet business. A large consumer event at the core Minato Mirai Yokohama location drew over 2,000 attendees and strengthened community ties. Corporate banquet revenue at the two core locations grew 1.8x year-over-year in the interim period, and the company is on track to hit its mid-term target of 7% non-wedding sales share.

• Full-year consolidated revenue guidance is revised downward by 2 billion yen from the original plan to 196 billion yen, representing a 1.7% increase year-over-year. All full-year profit targets are maintained: operating profit is projected at 17 billion yen (+8.6% YoY), ordinary profit at 16.4 billion yen (+10.9% YoY), and net income attributable to parent shareholders at 9.6 billion yen (+0.3% YoY). This keeps AOKI on track for 5 consecutive years of revenue and profit growth.
• Fashion Business: Full-year revenue guidance is cut by 1 billion yen to 104.2 billion yen (+1.5% YoY), while operating profit guidance is maintained at 9.2 billion yen (+5.9% YoY), projecting 5 consecutive years of revenue and profit growth.
• Entertainment Business: Full-year revenue guidance is cut by 0.8 billion yen to 77.2 billion yen (+1.5% YoY), while operating profit guidance is projected at 6.7 billion yen (+11.8% YoY), projecting 5 consecutive years of revenue and profit growth and a new record full-year profit.
• Anniversaire Bridal Business: Full-year revenue guidance is cut by 0.3 billion yen to 12 billion yen (+2.4% YoY) due to 90 fewer projected weddings than originally planned, while operating profit guidance is maintained at 0.7 billion yen (+29.2% YoY), projecting revenue and profit growth.

1. Fashion Business: Revenue of 38.6 billion yen, a 1.0% increase year-over-year, contributing 45.95% of total consolidated interim revenue. The segment reported an operating loss of 0.8 billion yen, due to higher new store opening costs and personnel expenses. 2. Entertainment Business: Revenue of 38.8 billion yen, a 0.4% increase year-over-year, contributing 46.19% of total consolidated interim revenue. The segment achieved record-high interim revenue and operating profit, growing profit year-over-year despite increases in advertising and personnel costs. 3. Anniversaire Bridal Business: Revenue of 5.4 billion yen, a 10.4% increase year-over-year, contributing 6.43% of total consolidated interim revenue. Improved cost controls reduced operating loss by 0.2 billion yen year-over-year to 89 million yen.

• Ongoing uncertain overseas conditions, US trade policy impacts, rising prices have increased consumer defensive spending behavior, creating an opaque outlook for consumer demand.
• Rising procurement costs, personnel expenses and other operating costs put pressure on profitability, even as the company works to offset these impacts through efficiency improvements.
• The domestic bridal market faces continued gradual decline in the number of marriages and shifting wedding preferences, creating structural headwinds for the business.

Q: The mid-term plan targets 100 net new stores, but market participants worry it will not be hit this year. What is the outlook for meeting the sales plan despite slower-than-planned store openings? / A: New store openings are roughly on track. However, the company has closed ~30 more unprofitable stores than originally planned to improve operating efficiency. AOKI does not prioritize raw store count growth, and will focus on activating existing stores and improving per-store profitability to hit the mid-term plan's revenue and profit targets.

Q: Fashion business capex is tracking above plan (7.7 billion yen spent in 2 years vs the 3-year 8 billion yen total plan). What is the capex and capital allocation plan for the third year of the plan? / A: Capex is over plan because new store openings are 5 units ahead of plan, and the company is doing 1.5x more existing store renovations than originally planned to improve sales floor efficiency. AOKI plans to maintain the same level of capex in the third year of the plan, and will continue capital allocation in line with the original mid-term plan.

Q: The entertainment business continues to see year-over-year lower customer traffic, with growth supported by higher average check. What is driving the decline and what countermeasures are you implementing? / A: Lower customer traffic is due to prior price adjustments and increased competition in suburban locations. AOKI will implement granular price adjustments by store and time slot to address the issue. It will also rotate in popular new content such as darts and billiards to boost customer traffic.

Q: What has driven PBR to break above 1.0x after years below this level, and what are your priorities to sustain the gains? / A: The key drivers are achievement of the prior year's financial plan, increased investor confidence in the mid-term plan, recognition of the entertainment business as a stable growth driver, and strong market support for the enhanced shareholder return policy. AOKI will continue focusing on these areas to sustain PBR above 1.0x.