YONDOSHI HOLDINGS INC.

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To Our Shareholders

Start of Fiscal 2021

YONDOSHI HOLDINGS held its 71st Annual General Meeting of Shareholders at Osaki Bright Core Hall on Thursday, May 27. All resolutions were approved and adopted smoothly, and we would like to express our sincere appreciation to all shareholders for their support.
YONDOSHI HOLDINGS Group launched its 6th Medium-Term Management Plan from this fiscal year. This new plan aims to respond to the sudden changes in the business environment by utilizing the strengths of the corporate group to the fullest extent to offer products and services that exceed customer expectations, and achieve continued growth. Over the next three years, for the mainstay jewelry business we will make investments to enhance the value of the 4°C brand, while in the apparel business we will pursue expanded openings of PALETTE locations, establishing the business as a second earnings pillar for the corporate group. In addition, we will build a more robust business portfolio in an effort to enhance stability and achieve sustainable growth.

Overview of the First Quarter of Fiscal 2021

Despite the difficult business environment due to the COVID-19 crisis, YONDOSHI HOLDINGS Group managed to achieve year-on-year increases in both revenue and earnings for the first quarter of fiscal 2021 (March 1 to May 31, 2021). Consolidated net sales amounted to ¥8,717 million (up 11.0% from the same period of the previous fiscal year), with operating income of ¥321 million (up 42.6%), ordinary income of ¥499 million (up 40.2%) and profit attributable to owners of parent to ¥258 million (up 95.3%).
By business segment, the F.D.C. Products Group, which manages the Jewelry Business, posted a sales gain from the same period of the previous fiscal year. Despite wide-ranging store closures and shortened operating hours implemented in response to the Japanese government’s State of Emergency, the areas subject to these measures were limited compared to the same period of the previous fiscal year. Operating income, however, declined year on year as a result of a rebound increase in personnel costs, a portion of which had been recorded as an extraordinary loss in the same period of the previous fiscal year.
In the Apparel Business, age Co., Ltd., operator of the everyday fashion brand PALETTE, continued to record positive business results. Net sales and operating income both rose from the same period of the previous fiscal year on the effect of new store openings, an expanded product range, and strengthening of sales promotion strategies. The AS’TY Group continued its efforts to improve operational efficiency amid scaled back events and sluggish demand due to the COVID-19 situation.

Full-year Results and Dividend Forecast

The full-year results forecasts for fiscal 2021 announced on April 12, 2021, were premised on the assumption that since the second State of Emergency issued on January 7, 2021, was lifted on March 21, 2021, that for the present business conditions would gradually improve, despite still being subject to the effects of the COVID-19 crisis.
However, a renewed outbreak in mid-April led to a sudden increase in reported coronavirus cases, and on April 25, 2021, Japan’s government issued a third State of Emergency applicable for areas where infections were rising. As a result, the mainstay Jewelry Business suffered a sharp decline in customer traffic, with operations suspended at up to 65 stores. The Company revised its results forecasts accordingly.
The revised full-year forecast anticipates year-on-year increases in both revenue and earnings, with net sales amounting to ¥40,500 million (up 2.7% YoY), operating income of ¥2,800 million (up 1.2%), ordinary income of ¥3,300 million (up 3.3%), and profit attributable to owners of parent of ¥2,200 million (up 35.6%). In terms of dividends, YONDOSHI HOLDINGS maintains its policy of commitment to continuous dividend increases, aiming to reach 100 yen per share in the future. The Company plans to pay a full year dividend of 83 yen per share, comprising an interim dividend of 41.5 yen, and a year-end dividend of 41.5 yen. This represents an eleventh consecutive fiscal year of dividend increase.

Left: CEO Saishi Kimura
Right: COO Hidetoshi Masuda