YONDOSHI HOLDINGS INC.

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To Our Shareholders

Overview of the Third Quarter of Fiscal 2021

In the third cumulative period of Fiscal 2021 (March 1 to November 30, 2021), consolidated net sales amounted to ¥27,323 million (down 3.5% from the same period of the previous fiscal year), with operating income of ¥695 million (down 62.9%), ordinary income of ¥1,169 million (down 47.1%), and profit attributable to owners of parent of ¥600 million (down 49.5%).
The F.D.C. Products Group, which operates the jewelry business, continued to face a difficult business environment for bridal jewelry due to the effects of COVID-19, while sales of fashion jewelry such as “4°C” and “Canal 4°C” have gradually recovered since the lifting of the emergency declaration in October. E-commerce sales have also been increasing recently. F.D.C. Products Group also launched new business initiatives during the period, including the “4°C HOMME+” line of gender-free jewelry from 4°C on October 22, 2021 (Fri.), and the “cofl by 4°C” sustainable jewelry brand on November 12 (Fri.).
In the apparel business, AS’TY Group experienced a temporary slowdown in demand in certain sectors due to the COVID-19 crisis, but looking ahead, continued to pursue measures to strengthen its product planning capabilities. Retailer age Co., Ltd., operator of the everyday fashion brand PALETTE, continued to record strong results, achieving record-high net sales and operating income as a result of opening eight new stores, and a year-on-year increase in sales at existing locations on the success of its sales promotion campaigns and 25th anniversary events.

Full-year forecasts for Fiscal 2021

Sales during the Christmas shopping season in December, when demand in the jewelry business generally peaks, fell short of our expectations amid the continuing impact that the COVID-19 crisis has had on consumer sentiment. In response, and based on recent performance trends, we have revised our full-year forecasts for the fiscal year ending February 2022.
In terms of dividends, however, because the impact on earnings due to the COVID-19 crisis is temporary in nature, the Company has not changed its plan to increase dividends by two yen to ¥83 per share, for an eleventh consecutive fiscal year of dividend growth.

Medium to Long-Term Strategic Approach

The business environment for YONDOSHI HOLDINGS has changed considerably as a result of the COVID-19 crisis. Looking at recent trends in the mainstay jewelry business, while the increase in video conferencing for telecommuting has resulted in firm demand from women for self-purchases of earrings and other pieces, the loss of occasions and opportunities for encounters has led to a temporary contraction in demand for gifts from men, as well as bridal jewelry.
To accurately detect the indications of changes such as these, respond to market demand, and achieve sustainable growth, we believe it’s important to enhance our organizational capabilities through sustained growth investments. We will utilize the solid financial foundation we have built up to now, and make various types of investments in preparation for the post-COVID economy.
Specifically, we have set four concrete targets for investment: 1) Brand value and marketing; 2) Opening of PALETTE stores; 3) IT systems and DX; and 4) Human resources. By drawing on the capabilities of the YONDOSHI HOLDINGS Group to the greatest possible degree, we will continue to provide products and services that exceed customer expectations.
In April 2022, the Tokyo Stock Exchange will reorganize its market segments into three: Prime Market, Standard Market, and Growth Market. YONDOSHI HOLDINGS has selected the top “Prime Market” segment, which is expected to comprise companies with high levels of market capitalization and liquidity, and high standards of governance. Going forward, YONDOSHI HOLDINGS will pursue sustainable management, implementing measures to help achieve a sustainable world, and continued increase in corporate value.
We would like to express our appreciation to all shareholders, and ask for your continued support.

President and Representative Director Hidetoshi Masuda