Slide 1: Financial Results for FY2/24 and Medium-term Management Plan 2027
Financial Results for FY2/24 and Medium-term Management Plan 2027 April 2, 2024 1
Slide 2: Contents
Contents 1. FY2/24 Financial Results P. 3 - 12 2. FY2/25 Business Forecasts P. 14 - 16 3. Medium-term Management Plan P. 18 - 52 Medium-term Management Plan 2024 Review The New Medium-Term Management Plan 2027 2
Slide 3: FY2/24 Summary
FY2/24 Summary ▽ Net sales and profits reached record highs despite continued severe weather for apparel sales. ▽ Gross profit and SG&A expenses were generally in line with plans, even in an environment of rising raw material costs. FY2/24 Consolidated Results ■Net sales ■Gross profit ■Operating inc
Slide 4: Consolidated Results: Income Statement
Consolidated Results: Income Statement ▽ Net sales: 635 billion yen (up 3.1% YoY). Record high for the full year. ▽ SG&A ratio: 25.9 %(+ 0.3pt YoY ). It was generally in line with the plan through effective cost control for the full year. ▽ Operating income: 55.3 billion yen (up 3.8% YoY). All profi
Slide 5: Sales by Business
Sales by Business ▽ Domestic sales increased by 2.9% YoY due to further enhancement of brand power, product lineup expansion, diversification of sales promotion methods, and enhancement of regional response. ▽ Sales of Si meng le (Taiwan) performed well, up 19.6% YoY, thanks to the expansion of PB a
Slide 6: Consolidated Results: SG&A Expenses
Consolidated Results: SG&A Expenses ▽ Personnel expenses: Up 5.9% YoY due to wage increases in spring. Large effect on eliminating labor shortages and lowering the turnover rate. ▽ Advertising expenses: Despite aggressive sales promotions such as the 70th anniversary sale, sales promotion expenses w
Slide 7: Consolidated Results: Balance Sheets
Consolidated Results: Balance Sheets ▽ Assets: Cash + Accounts receivable + investment securities up 3.6% YoY. Merchandise inventories increased by 5.3% YoY. ▽ Liabilities: Accounts payable-trade and asset-retirement obligations increased, and provision for bonuses decreased. (Million yen/%) Composi
Slide 8: Sales, Number of customers, Spending per customer YoY
Sales, Number of customers, Spending per customer YoY ▽ Growth in existing store sales (Shimamura) : Sales grew due to product lineups that are less susceptible to temperature and product planning. ▽ Customer numbers declined in all businesses: the number of customers slightly declined from the prev
Slide 9: Gross profit, Price reduction, Inventory YoY
Gross profit, Price reduction, Inventory YoY ▽ Gross profit: In Shimamura and Avail, the gross margin improved thanks to an improved markup rate due to the shift to a new price range and other factors. ▽ Price reduction: In each business, the price reduction rate was generally in line with the plan
Slide 10: Shimamura Business
Shimamura Business Strengthening product appeal and sales power ▽ Further enhancement of brands: PB ratio was 22.3%, and sales increased by 10.2% YoY. ・High-priced PB “CLOSSHI PREMIUM” sales increased by 37.7% YoY. Successful expansion of the high-priced range. ・JB ratio was 8.5%, and sales increase
Slide 11: Avail and Birthday Business
motivation Avail and Birthday Business Strengthening product appeal and sales power ▽ Avail: Sales increased by 2.8% YoY. JB sales increased by 17.0% YoY, and JB ratio was 43.9%. Strengthen trend and character proposals. Diversification of regional and individual store response. ▽ Birthday: Sales in
Slide 12: Chambre, Divalo, Si meng le and EC Business
Chambre, Divalo, Si meng le and EC Business Strengthening product appeal and sales power ▽ Chambre Business: Outerwear of JB drove sales. Strengthening digital sales promotion leads to the acquisition of new customers. ▽ Divalo Business: Strengthen proposals for “shoes and clothes” coordinates and d
Slide 13: Contents
Contents 1. FY2/24 Financial Results P. 3 - 12 2. FY2/25 Business Forecasts P. 14 - 16 3. Medium-term Management Plan P. 18 - 52 Medium-term Management Plan 2024 Review The New Medium-Term Management Plan 2027 13
Slide 14: Consolidated Business Forecasts for FY2/25
Consolidated Business Forecasts for FY2/25 ▽ Net sales: Up 3.9% YoY, Operating income: up 1.9% YoY (plan) ▽ SG&A: Up 4.8% YoY. Personnel expenses increased by 6.2% YoY, and repair expenses due to renovations of existing stores are planned to rise. ▽ Dividend per share: Annual dividend is expected to
Slide 15: FY2/24 Management Policy
FY2/24 Management Policy A unified theme “Next Challenge 1st: Changing the Obvious” ▽ We will change the way we think about all things “Obvious" and take on new challenges in all departments, including product creation, sales floor presentation, organization and human resource development, systems,
Slide 16: FY2/25 Stores Opening/Closing and Renovation Plan
FY2/25 Stores Opening/Closing and Renovation Plan ▽ Group total: open 43 new stores, close 16 stores. (net increase of 27 stores) Improve store profitability by expanding relocation and fashion mall format store openings. Plan to open stores in central Tokyo and strengthen surveys of store opening l
Slide 17: Contents
Contents 1. FY2/24 Financial Results P. 3 - 12 2. FY2/25 Business Forecasts P. 14 - 16 3. Medium-term Management Plan P. 18 - 52 Medium-term Management Plan 2024 Review The New Medium-Term Management Plan 2027 17
Slide 18: Medium-Term Management Plan 2027 Contents
LéeG50T7U-TF _ Medium-Term Contents LG 32T7IL-—F Management Plan 2027 Cr: El Review of the Previous Medium-Term Management Plan 1-1 Domestic Results 1-2 Basic Policy 1-3 ESG Activities 1-4 Capital Policy 1-5 Challenges for the Next Medium-Term Management Plan LFGSOTA-T Medium-Term Management Plan 20
Slide 19: Review of Previous Plan: Assessment of KPIs
LéeG50T7U-TF Review of the Previous Medium-Term Management Plan Domestic Results Assessment of KPIs FY 2/2021 FY 2/2024 FY 2/2024 Results Targets Results Netsales 536.6 billion yen 595.0 bitlion yen 627.0 billion yen O Revised upward to 628.0 billion yen Operating a 49.3 billion yen eae profit 38.1
Slide 20: Assessment of Net Sales
Assessment of Net Sales Net Sales 558.5 pittion yen E 2018.2 539.8 billion yen 536.6n 516.0 Ses yen 2019.2 2020.2 2021.2 € Medium-Term Management Plan 2021 > Review of the Previous Medium-Term Management Plan Domestic Results 627.0 billion yen 609.3 billion yen 595.0 bittion yen 577.9 tittion yen 20
Slide 21: Assessment of Results by Business
Legs oTl-T Review of the Previous Medium-Term Management Plan Domestic Results Assessment of Results by Business (Net Sales Per Existing Store, Operating Income Margin) Net Sales Per Existing Store Operating Income Margin Net sales per existing store increased Shimamura maintained profit at high lev
Slide 22: Basic Policy
Basic Policy Basic Policy FY 2/2022 First Stage “Revitalization and Evolution” Review of the Previous Medium-Term Management Plan ae | Revitalize what cannot be changed Begin to evolve what should be changed Continue to evolve what should be changed Apply and implement evolution and revitalization m
Slide 23: Efforts to Address Key Challenges
Efforts to Address Key Challenges Policy Initiatives Strengthen Product Appeal Strengthen the product brand appeal Strengthen supply chain Strengthen individual store response according to store and regional characteristics Strengthen Sales Power Diversify sales promotion methods Improve sales floor
Slide 24: Assessment of ESG Activities
Assessment of ESG Activities Priority issues Review of the Previous Medium-Term Management Plan ESG Activities Indicator IES FY 2/2026 is Targets Results ssessme Complete recycling ratio of © Circular economy promotion hangers*" 60.0% 60.1% [>] Reducti f GHG issi Zero product disposal*? Zero 430 edu
Slide 25: Evaluation of ESG Activities by External Parties
Evaluation of ESG Activities by External Parties Review of the Previous Medium-Term Management Plan ESG Activities Legs oTl-T © Listed on four of six ESG indexes adopted by GPIF Listed on following ESG indexes MSCI Japan Empowering Women Index (WIN)* FTSE Blossom Japan Sector Relative Index S&P/JPX
Slide 26: Capital Policy: Assessment
Capital Policy Assessment of Capital Policy Review of the Previous Medium-Term Management Plan Capital Investment Targets and Results vw Targets Results LéeG50T7U-TF * Pre stock split dividends and EPS amounts ‘4 (Mitlion yen} 8.9 8.9 ; " Trg iad tat 31,870 aiererst tio saconias saci achiever rato 6
Slide 27: Challenges for the Next Medium-Term Management Plan
LéG5o7Fl-T Review of the Previous Medium-Term Management Plan Challenges for the Next Medium-Term Management Plan Major Challenges in the Next Medium-Term Management Plan © Reconstructing Our Business Portfolio Shift from an earnings structure rooted in the Shimamura business to a structure that sec
Slide 28: Contents
LéeG50T7U-TF _ Medium-Term Contents LG 32T7IL-—F Management Plan 2027 Cr: The New Medium-Term Management Plan: Next Challenge 2-1 Basic Policy of Medium-Term Management Plan 2027 2-2 Numerical Targets 2-3 Three Measures for Pursuing Growth Growth Strategy Reinforcement of the Business Base and Found
Slide 29: Basic Policy of Medium-Term Management Plan 2027
The New Medium-Term Management Plan: Next Challenge Basic Policy of Medium-Term Management Plan 2027 Basic policy he Next Challenge (Pursuing Further Growt © We will harness the creativity and ingenuity of our employees to build upon the strengths of the Shimamura Group. © We will expand our scale o
Slide 30: Numerical Targets
LéeG50T7U-TF The New Medium-Term Management Plan: Next Challenge Numerical Targets Numerical Targets (Consolidated) FY 2/2021 FY 2/2024 FY 2/2027 (Targets) Net sales 542.6 billion yen 635.0 billion yen 719.0 billion yen Operating profit 38.0 billion yen 55.3 billion yen 66.0 billion yen Operating pr
Slide 31: Overall Structure: Three Measures for Pursuing Growth
Overall Structure The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth LéeG50T7U-TF © Three Measures Aimed at Realizing Our Long-Term Vision @ Business portfolio reconstruction @ Elevation of sales in existing stores @ Product strategy, sales strategy @ Strategy for
Slide 32: Growth Strategy—Reconstruction of Business Portfolio
The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Growth Strategy—Reconstruction of Business Portfolio FY 2/2021 FY 2/2024 FY 2/2027 FY 2/2030 = To be fostered Driving growth Driving growth To be fostered Driving growth To be fostered Driving growth “Avail i ase
Slide 33: Growth Strategy—Elevation of Sales in Existing Stores
The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Growth Strategy—Elevation of Sales in Existing Stores Expand market share through continued emphasis on Shimamura’s strengths (high sen: igh qual and low prices) and low-cost operations Ongoing marketing polarizat
Slide 34: Growth Strategy—Strengthening of Product Appeal
Legs oTl-T The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Growth Strategy—Strengthening of Product Appeal Increase Brand Power Expand Product Lineup Enhance Product Development Boost brand power Broaden product Lineup to Utilize more sophisticated data and inc
Slide 35: Growth Strategy—Strengthening of Sales Power
Legs oTl-T The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Growth Strategy—Strengthening of Sales Power - (Mass marketing Bindivi jualized Weneniarhenny by segment marketing [ BI © Mass marketing 2asgs | 1 | Mass marketing 1p SegmentA SegmentB (©) Mass marketin
Slide 36: Expansion of Store Openings, Relocations, and Renovations
Legs oTl-T The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Growth Strategy—Expansion of Store Openings, Relocations, and Renovations Plans for Domestic Store Openings _ Medium-Ter aa ae a { j|anagement Plan and Renovations : (Targets) Number of st i we ayeat we
Slide 37: Ramp Up Store Openings in Urban Areas
LeG52T7L-TF The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Growth Strategy—Expansion of Store Openings, Relocations, and Renovations Ramp Up Store Openings in Urban Areas To date: Development of high-density stores using dominant strategy, with focus on suburb
Slide 38: Renovations and Relocations of Stores
The New Medium-Term Management Plan: Next Challenge Growth Strategy—Expansion of Store Openings, Relocations, and Renovations || atest (co Updated air lighting conditioners Renovate to Improve Store Loyalty To date: Renovation of stores with noticeable deterioration, focusing on stores with top sale
Slide 39: Growth Strategy—Expansion of E-Commerce Business
Legs oTl-T The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Growth Strategy—Expansion of E-Commerce Business ommerce Net Sales and Ratio © Product Strategy (Million yen) * Increase range of planned product appeal exclusive to 1 1 000 e-commerce Discover new infl
Slide 40: Expansion of E-Commerce Business [Domestic]
The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Growth Strategy—Expansion of E-Commerce Business [Domestic] E-commerce sites operated by each business segment lLéa5 Sch Avail “A vaw dovtewtes= BabyaKids Chambre ges E-commerce going forward: E-commerce to date:
Slide 41: Growth Strategy—Entrance into New Business Overseas
LFGWSOTA-T Medium-Term Management Plan 2027 Growth Strategy—Entrance into New Business Overseas © Establish Overseas Business via Cross-Border E-Commerce LéG527U-TF The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth < Cross-border e-commerce via agencies <q * Acqu
Slide 42: Medium-Term Human Resources Strategy
The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Reinforcement of the Business Base and Foundations—Implementation of Medium-Term Human Resources Strategy for a Good Company Maximize employee perfor e n that helps ac long-term management plans ® Realign organiza
Slide 43: Increase Productivity Through Digitalization
The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Reinforcement of the Business Base and Foundations—Increase Productivity Through Digitalization Utilization of Customer Management System Introduce system, begin data accurnulation Medium-Term Manag Accumulate and
Slide 44: Reconstruction of Supply Chain
Legs oTl-T The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Reinforcement of the Business Base and Foundations—Reconstruction of Supply Chain External Risks Internal Risks Risks that could obstruct Product procurement risks Domestic logistic capacity insufficien
Slide 45: Initiatives to Solve ESG Issues
LeG50T7L-TF The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Initiatives to Solve ESG Issues Management Mission The Shimamura Group will build a “good company” for employees, customers, business partners, society, and shareholders. Business partners Accomplishin
Slide 46: Initiatives to Solve ESG Issues: Priority Issues and Targets
LEG5OaTU-TF The New Medium-Term Management Plan: Next Challenge Three Measures for Pursuing Growth Initiatives to Solve ESG Issues Priority issues Initiative Items and Targets Applicable SDGs Complete recycling ratio of hangers 75.0%*! (>) Circular economy promotion Complete recycling ratio of plast
Slide 47: Capital Policy: KPIs and Allocation of Managerial Resources
LéeG50T7U-TF The New Medium-Term Management Plan: Next Challenge Capital Policy KPls and Allocation of Managerial Resources Capital Efficiency Shareholder Returns Financial Security ROE Dividend payout ratio DOE Liquidity-on-hand ratio Approx. 8.0% Approx. 35.0% Approx. 3.0% Approx. 4-6 months * Lev
Slide 48: Capital Policy: Growth Investment
The New Medium-Term Management Plan: Next Challenge Capital Policy Growth Investment wth Investment Policies © The Shimamura Group will expand investments in order to achieve continuous growth. © We will work toward improving performance and contributing to all stakeholders by elevating the quality
Slide 49: Capital Policy: Shareholder Returns
Capital Policy Shareholder Returns © The basis lies in continuous increase of dividends by ele- vating performance every term and stable returns to shareholders. [>] We will ensure stable returns even in the event of tempo- rary performance fluctuations by adopting DOE as an index. © KPis will be up
Slide 50: Internal Reserves and Capital Efficiency
The New Medium-Term Management Plan: Next Challenge LédsoFl-F Capital Policy Internal Reserves and Capital Efficiency Internal Reserves Policies . A intai ici Medium-Term Medium-Term © The Shimamura Group will maintain sufficient funds on hand Management Plan 2024 Management Plan 2027 for flexible r
Slide 51: Management Mindful of Capital Costs and Stock Prices
4 aOR a The New Medium-Term Management Plan: Next Challenge LédsoFl-F Capital Policy Measures to Conduct Management Mindful of Capital Costs and Stock Prices Medium-Term Management Plan 2024 @ Assessment Analysis of + The Company's return on capital have supported ROE of approx. 9.0%, exceeding capi
Slide 52: Initiatives to Maintain ROE That Exceeds Capital Costs
Implement Initiatives to Maintain ROE That Exceeds Capital Costs The New Medium-Term Management Plan: Next Challenge Capital Policy Legs oTl-T Profitability Profit Net Sales Increase operating income margin Reconstruction of business portfolio Develop profitable structure for non- Shimemura business
Slide 53: Information Disclosure
Information Disclosure Financial Results Materials (Disclosed on the corporate website) ▽ Financial Results Briefing Materials (with comments): April 2 (Tuesday) ▽ Summary of Financial Results (English): April 2 (Tuesday) ▽ Financial Results (Summary of Question and Answer Session): April 3 (Wednesd
Slide 54: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements, etc. The forward-looking statements, including business forecasts, contained in this document are based on judgments made in accordance with information available at the time of this document's release and are subject to a number of uncertai