Improving Profit Margins and Stabilizing Sales

「Although revenue from the recovery business conducted through the subsidiary ベネクス grew steadily, revenue from the company's anti-aging business declined, resulting in total revenue of ¥7,342 million, down 13.9% year on year, for the current interim consolidated accounting period. Operating income was ¥626 million, down 36.0% year on year, due mainly to selling expenses, including advertising expenses for new customer acquisition in the anti-aging business, falling below plan. Ordinary income was ¥676 million, down 30.3%, and interim net income attributable to owners of the parent was ¥445 million, down 23.4%.」

「Operating profit improved significantly to ¥408 million, compared with an operating loss of ¥139 million in the previous fiscal year. Although gross profit declined due to lower revenue, selling expenses in the direct-to-consumer channel fell below plan, particularly advertising expenses, because advertising efficiency for new customer acquisition had not improved sufficiently. The company also continued to reduce fixed costs and implemented appropriate cost management.」

「Operating profit was ¥977 million, compared with an operating loss of ¥205 million in the same period of the previous year. Although gross profit declined due to lower revenue from the anti-aging business, selling expenses, particularly advertising expenses, were controlled in the direct-to-consumer channel because advertising efficiency for new customer acquisition had not improved sufficiently. In addition, fixed costs were reduced in line with the scale of the business and appropriate cost management was implemented.」

「Revenue from the anti-aging business was ¥14,102 million, down 30.5% year on year.」

「Revenue from the anti-aging business was ¥9,750 million, down 31.6% year on year. Although advertising expenses for new customer acquisition and other expenses were controlled due to persistently high advertising costs in the mail-order market, the decline in revenue reduced gross profit, resulting in an operating loss of ¥360 million, compared with operating income of ¥109 million in the prior-year period.」

「Against this backdrop, our group newly formulated the medium-term management plan “2024-2027 +Beyond” and began its first year of establishing a foundation for renewed growth through structural reform.」

「The fiscal years ending July 2025 through July 2027 are positioned as the execution phase for the growth strategy. Through a growth strategy combining brands, channels, and co-creation leveraging capital, we aim to achieve revenue of ¥40,000 million and an operating margin of at least 10% for the fiscal year ending July 2027.」

「As a result of the activities described above, revenue for the cumulative third quarter of the current consolidated fiscal year was ¥20,609,823 thousand, down ¥5,287,067 thousand year on year. Operating income was ¥42,547 thousand, down ¥1,914,942 thousand, ordinary income was ¥43,447 thousand, down ¥2,098,185 thousand, and the company reported a quarterly net loss attributable to owners of the parent of ¥153,280 thousand, compared with quarterly net income attributable to owners of the parent of ¥1,222,406 thousand in the prior-year period.」

「As a result of the activities described above, revenue for the cumulative second quarter of the current consolidated fiscal year was ¥14,258,716 thousand, down ¥3,711,423 thousand year on year. Operating income was ¥109,034 thousand, down ¥2,139,345 thousand, ordinary income was ¥95,237 thousand, down ¥2,226,669 thousand, and the company reported a quarterly net loss attributable to owners of the parent of ¥26,013 thousand, compared with quarterly net income attributable to owners of the parent of ¥1,360,409 thousand in the prior-year period.」

「As a result of the activities described above, revenue for the cumulative first quarter of the current consolidated fiscal year was ¥7,391,604 thousand, down ¥2,474,145 thousand year on year. The company reported an operating loss of ¥244,294 thousand, compared with operating income of ¥2,074,797 thousand in the prior-year period, an ordinary loss of ¥224,861 thousand, compared with ordinary income of ¥2,132,204 thousand, and a quarterly net loss attributable to owners of the parent of ¥198,039 thousand, compared with quarterly net income attributable to owners of the parent of ¥1,320,414 thousand.」

「Our group has set the medium- to long-term goal of becoming an anti-aging company by creating and developing multiple overwhelmingly No. 1 brands in the cosmetics and anti-aging fields. To achieve this goal and improve margins and stabilize revenue, we are pursuing growth through initiatives including reducing CPO and increasing LTV in the mail-order channel, expanding revenue per store in the wholesale channel, maintaining and strengthening DUO's No. 1 position in the cleansing balm category, and developing CANADEL and Clayence.」

「As a result of the activities described above, revenue for the cumulative third quarter of the current consolidated fiscal year was ¥25,896,891 thousand, up 9.0% year on year. Operating income was ¥1,957,490 thousand, down 55.8%, ordinary income was ¥2,141,632 thousand, down 51.5%, and net income attributable to owners of the parent was ¥1,222,406 thousand, down 56.8%.」

「In the second quarter of the current consolidated fiscal year, profitability temporarily declined because advertising rates were raised to acquire customers not acquired in the previous quarter. As a result of the activities described above, revenue for the cumulative second quarter of the current consolidated fiscal year was ¥17,970,140 thousand, up 17.4% year on year. Operating income was ¥2,248,379 thousand, down 8.7% year on year.」

「There were no material changes during the three-month period ended June 30 to the management policies, management strategies or other matters established by our group.」

「Our group formulated a medium-term management plan covering the fiscal years ending July 2022 through July 2024 to achieve “improved margins and stabilized revenue,”」

「There were no material changes to the management policies, management strategies or other matters established by our Group during the cumulative third-quarter period.」

「There were no material changes to the management policies, management strategies or other matters established by our Group during the cumulative second-quarter period.」

「We formulated a medium-term management plan covering the fiscal years ending July 2021 through July 2023 to achieve “improved margins and stabilized revenue,”」