United Arrows : Consolidated Financial Results for the Nine Months Ended December 31, 2025

February 5, 2026

Company name: UNITED ARROWS LTD.

Listing: The Prime Market of the Tokyo Stock Exchange Securities code: 7606

URL: https://www.united-arrows.co.jp/en/

Representative: Yoshinori Matsuzaki, Representative Director, President and CEO Inquiries: Takeo Nakazawa, Director, Executive Managing Officer and CFO Telephone: +81-3-6804-2820

Scheduled date to commence dividend payments: -

Preparation of supplementary material on financial results: Yes

Holding of presentation of financial results: Yes (for institutional investors and analysts)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the nine months ended December 31, 2025 (April 1, 2025 to December 31, 2025)
   1. Consolidated operating results (cumulative) (Percentages indicate year-on-year changes.)

      	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
      Nine months ended	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      December 31, 2025	123,638	9.4	8,764	9.1	8,922	1.7	6,696	32.2
      December 31, 2024	112,988	13.3	8,035	38.1	8,771	37.9	5,063	19.0

      Note: Comprehensive income	For the nine months ended December 31, 2025:	¥6,646 million	[31.6%]
      	For the nine months ended December 31, 2024:	¥5,049 million	[20.9%]

      	Basic earnings per share	Diluted earnings per share
      Nine months ended	Yen	Yen
      December 31, 2025	242.49	-
      December 31, 2024	183.44	-

      Note: Diluted earnings per share are not stated since there are no dilutive shares.

   2. Consolidated financial position

   	Total assets	Net assets	Equity-to-asset ratio	Net assets per share
   As of	Millions of yen	Millions of yen	%	Yen
   December 31, 2025	79,163	42,665	53.9	1,544.72
   March 31, 2025	70,142	37,821	53.9	1,369.92

   Reference: Equity

   As of December 31, 2025: ¥42,665 million As of March 31, 2025: ¥37,821 million

2. Cash dividends

   	Annual dividends per share
   	First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
   Fiscal year ended March 31, 2025 Fiscal year ending March 31, 2026	Yen	Yen	Yen	Yen	Yen
   	- -	17.00 20.00	- -	46.00	63.00
   Fiscal year ending March 31, 2026 (Forecast)				54.00	74.00

   Note: Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated financial result forecasts for the fiscal year ending March 31, 2026 (from April 1, 2025 to March 31, 2026)

(Percentages indicate year-on-year changes.)

Note: Revisions to the forecast of financial results most recently announced: None

1. Significant changes in the scope of consolidation during the period: None Newly included: ― Excluded: -

2. Adoption of accounting treatment specific to the preparation of the quarterly consolidated financial statements: None

3. Changes in accounting policies, changes in accounting estimates, and restatement

   1. Changes in accounting policies due to revisions to accounting standards and other regulations: None

   2. Changes in accounting policies due to other reasons: None

   3. Changes in accounting estimates: None

   4. Restatement: None

4. Number of issued shares (common shares)

   1. Total number of issued shares at the end of the period (including treasury shares)

      As of December 31, 2025	30,213,676 shares
      As of March 31, 2025	30,213,676 shares

   2. Number of treasury shares at the end of the period

      As of December 31, 2025	2,593,396 shares
      As of March 31, 2025	2,605,286 shares

   3. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

• Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: None

• Proper use of earnings forecasts, and other special matters

The forward-looking statements herein are based on information available to the Company and certain assumptions deemed reasonable as of the date of publication of this document. They are not intended as the Company's commitment to achieve such forecasts, and actual results may differ significantly from these forecasts due to a wide range of factors.

For the suppositions that form the assumptions for earnings forecasts and cautions concerning the proper use thereof, please refer to "Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information" on page 4 of (Attachments) Consolidated Financial Results.

Table of Contents - Attachments

1. Qualitative Information on Quarterly Financial Results 2

   1. Explanation of Operating Results 2

   2. Explanation of Financial Position 4

   3. Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information 4

2. Quarterly Consolidated Financial Statements and Principal Notes 5

   1. Quarterly Consolidated Balance Sheet 5

   2. Quarterly Consolidated Statements of Income and Comprehensive Income 7

      Quarterly Consolidated Statement of Income 7

      Quarterly Consolidated Statement of Comprehensive Income 8

   3. Quarterly Consolidated Statement of Cash Flows 9

   4. Notes to Quarterly Consolidated Financial Statements 10

(Notes on going concern assumption) 10

(Notes in case of significant changes in shareholders' equity) 10

(Segment information, etc.) 10

(Significant subsequent events) 10

1. Qualitative Information on Quarterly Financial Results

   1. Explanation of Operating Results

      During the nine months ended December 31, 2025, the Japanese economy was on a moderate recovery trend against the backdrop of improvements in the employment and income environments, among other factors. Nevertheless, the outlook remained uncertain, as concerns over the impact on the global economy of the U.S. policy trends and international affairs prevailed. The retail apparel industry, despite expectations for consumer spending expansion as a result of wage hikes, has been facing a harsh business environment due to rises in costs such as material costs and personnel costs and risks of a downturn in consumer sentiment due to persistent price increases, as well as the impact of unprecedented heat on sales of fall merchandise.

      Under such circumstances, the Company has formulated its long-term vision for 2032 (the fiscal year ending March 31, 2033)- "UNITED ARROWS, a Beautiful Company. We will continue to pursue truth, goodness, and beauty in order to contribute to the realization of a sustainable society and become a high-value-added group that continues to be loved by customers"-and as means to achieve the long-term vision, the Medium-Term Management Plan ending in the fiscal year ending March 31, 2026 with the slogan- "Providing excitement: connecting with customers widely and deeply." To this end, the Company will pursue three strategies.

      In the fiscal year ending March 31, 2026, which is the final year of the Medium-Term Management Plan, we upheld "To accelerate the provision of new value" as our management policy and we have been aiming to achieve the long-term vision and Medium-Term Management Plan through the promotion of the three strategies.

      The first strategy-UA CREATIVITY Strategy-promotes growth and expansion of the existing businesses, strengthening of brand appeal, and re-growth of COEN CO., LTD. In promoting the growth and expansion of the existing businesses, we adjusted our seasonal merchandising strategy based on the assumption of a long summer. In addition, we revised the product assortment to lessen reliance on winter outerwear. These and other initiatives proved effective, resulting in stable sales with year-on-year growth of 6.5% in non-consolidated retail and online existing store sales. The gross margin was affected by several factors, including an increase in sales from marked down products in spring and summer on a non-consolidated basis. However, the margin remained at the highest level since the nine months ended December 31, 2014 due to more appropriate pricing and strong full-price sales performance of fall and winter products as well as a reversal of the widening trend in inventory valuation losses seen in the previous fiscal year and other improvements at COEN CO., LTD. With regard to strengthening our brand appeal, we continued our advertising campaigns featuring celebrities in our core business. In addition, by opening new stores and renovating existing stores, we are increasing our brand recognition and enhancing our brand image to drive sales growth. As for COEN CO., LTD., although we were able to improve gross margin, net sales declined due to the impacts of unstable temperature fluctuations and closings of large-scale stores in the previous fiscal year, among other factors. As announced on January 29, 2026, we have resolved to transfer all shares of COEN CO., LTD. held by us to Gyet Co., Ltd., with the transfer scheduled for March 2, 2026.

      The second strategy-UA MULTI Strategy-aims to broaden the range of value that the Company offers and expand its customer base through business development and global development aiming for business expansion. To expand our customer base, embrace new customers, and solve the issues surrounding the fashion taste axis, we have opened physical stores in the Tokyo and Osaka areas of "NICE WEATHER," a South Korean lifestyle select shop. As for "OSOI," a handbag brand from South Korea, we have opened the first two stand-alone physical stores in Japan and expanded the availability of the brand's products in physical stores of our core business. For our global expansion, we plan to open our second store in mainland China in the Shenzhen area in March 2026, following the opening of a store in the Shanghai area in January 2025. In the same month, we also plan to open our 15th store in Taiwan and a second franchised store in Thailand, steadily advancing our global expansion efforts. In September 2025, we launched "UNITED ARROWS GLOBAL ONLINE," our own cross-border e-commerce site. We will aim to enhance our brand recognition and expand sales channels overseas.

      The third strategy-UA DIGITAL Strategy-promotes OMO (*) and optimizes the supply chain. In promoting OMO, our new membership system has continued to operate successfully, and sales by members posted double-digit year-on-year growth. Several other key indices have also shown stable upward trends, such as the increased ratio of members who made multiple purchases over the year, along with a steady increase in active members who made a purchase over the past year, leading to a stronger customer base. These results demonstrate that the new membership system has contributed to the strengthening of our customer base. In terms of efforts to optimize the supply chain, a new core product management system has been in operation since April 2025. We aim to reduce procurement costs by establishing an optimal production framework through centralized product cost data management. We also expect that improving the accuracy of inventory allocation to each store and online shopping website will reduce lost sales opportunities and lower logistics costs.

      (*) OMO: Acronym for Online Merges with Offline.

      As for store openings and closings, we opened 11 stores and closed one store in the trend-conscious market, opened eight stores in the basic trend-conscious market, and opened one outlet store. As a result, as of December 31, 2025, the number of retail stores was 229 and the total number of stores including outlets was 257.

      The status of consolidated subsidiaries was as follows: COEN CO., LTD. (fiscal year-end: January) reported revenue decrease and UNITED ARROWS TAIWAN LTD. (fiscal year-end: January) reported revenue increase. UNITED ARROWS SHANGHAI LTD. (fiscal year-end: December) has started to record sales in the fiscal year ending March 31, 2026. As for store openings and closings, COEN CO., LTD. opened three stores and closed one store for a total of 76 as of October 31, 2025, UNITED ARROWS TAIWAN LTD. opened four stores for a total of 14 stores as of October 31, 2025, and UNITED ARROWS SHANGHAI LTD. opened one store for a total of one store as of September 30, 2025. As a result of the above, the Group, as a whole, opened 28 stores and closed two stores, and as of December 31, 2025, the number of stores in the Group was 348.

      As a result, consolidated business performance for the nine months ended December 31, 2025 consisted of net sales of ¥123,638 million (up 9.4% year on year), gross profit of ¥66,070 million (up 10.3% year on year), and gross margin improved by 0.4 percentage points year on year to 53.4%. Selling, general and administrative expenses were ¥57,306 million (up 10.5% year on year), due to increases in advertising and sales promotion expenses as a result of enhanced advertising, personnel expenses as a result of wage hikes and an increase in the number of personnel, depreciation as a result of an increase in store openings and head office relocation, and amortization of systems, while the SG&A ratio increased by 0.4 percentage points to 46.4%. Consequently, for the nine months ended December 31, 2025, operating profit was ¥8,764 million (up 9.1% year on year), and ordinary profit was ¥8,922 million (up 1.7% year on year). As a result of the Company execution of a share transfer agreement with Gyet Co., Ltd. regarding all shares held by the Company in COEN CO., LTD., a consolidated subsidiary, deferred tax assets related to the subsidiary's retained losses were recognized. Accordingly, profit attributable to owners of parent was ¥6,696 million (up 32.2% year on year).

   2. Explanation of Financial Position

      Assets

      Current assets increased by ¥6,946 million (15.5%) from the end of the previous fiscal year to ¥51,763 million. This was mainly attributable to increases in merchandise of ¥4,478 million and accounts receivable - other of

      ¥2,806 million.

      Non-current assets increased by ¥2,074 million (8.2%) from the end of the previous fiscal year to ¥27,400 million. This was mainly attributable to increases in property, plant and equipment of ¥2,300 million as a result of store openings and deferred tax assets of ¥815 million, despite decreases in intangible assets of ¥612 million and guarantee deposits of ¥403 million.

      Liabilities

      Current liabilities increased by ¥3,898 million (14.0%) from the end of the previous fiscal year to ¥31,666 million. This was mainly attributable to an increase in short-term borrowings of ¥7,172 million, despite decreases in accounts payable - other of ¥1,929 million and income taxes payable of ¥1,583 million.

      Non-current liabilities increased by ¥279 million (6.1%) from the end of the previous fiscal year to ¥4,831 million. This was mainly attributable to an increase in asset retirement obligations of ¥233 million due to store openings.

      Net assets

      Total net assets increased by ¥4,844 million (12.8%) from the end of the previous fiscal year to ¥42,665 million. This was mainly attributable to an increase in retained earnings of ¥6,696 million due to the reporting of profit attributable to owners of parent, despite a decrease of ¥1,830 million due to the payment of dividends.

   3. Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information

   As a result of the planned transfer of all shares of COEN CO., LTD. to Gyet Co., Ltd., scheduled for March 2, 2026, the Company expects to record a loss on the transfer of such shares in the fourth quarter. However, as a certain amount of debt forgiveness to COEN CO., LTD. will arise in connection with the transfer, and the amount of net assets at the time the subsidiary is deconsolidated has not yet been finalized, the amount of the transfer loss is currently under review. Accordingly, there have been no changes to the consolidated financial results forecast for the fiscal year ending March 31, 2026, released on May 8, 2025.

2. Quarterly Consolidated Financial Statements and Principal Notes

(1) Quarterly Consolidated Balance Sheet

(Millions of yen)

As of March 31, 2025 As of December 31, 2025

Assets

Cash and deposits 6,665 6,271

Current assets

Merchandise 24,191 28,668

Notes and accounts receivable - trade 185 112

Supplies 539 587

Accounts receivable - other 12,301 15,107

Other 930 1,005

Short-term loans receivable from subsidiaries and associates

3 10

Non-current assets

Total current assets 44,816 51,763

Buildings and structures, net 5,919 7,362

Property, plant and equipment

Land 569 569

Machinery and equipment, net 469 1,166

Other, net 1,016 1,392

Construction in progress 230 14

Intangible assets

Total property, plant and equipment 8,205 10,506

Software in progress 4,113 64

Software 1,663 5,099

Total intangible assets 5,804 5,191

Other 28 27

Long-term loans receivable from subsidiaries and associates

23

18

Investments and other assets

Deferred tax assets 2,204 3,019

Guarantee deposits 7,624 7,221

Allowance for doubtful accounts (2) -

Other 1,464 1,442

Total non-current assets 25,325 27,400

Total investments and other assets 11,314 11,702

Total assets 70,142 79,163

Liabilities

(Millions of yen) As of March 31, 2025 As of December 31, 2025

Current liabilities

Notes and accounts payable - trade 11,636 11,974

Electronically recorded obligations - operating 929 1,771

Short-term borrowings 1,028 8,200

Accounts payable - other 7,133 5,205

Income taxes payable 2,633 1,050

Provision for bonuses for directors (and other

officers)

48

32

Provision for bonuses 2,043 1,054

Asset retirement obligations 211 191

Provision for share awards - 100

Total current liabilities 27,767 31,666

Other 2,103 2,086

Asset retirement obligations 4,407 4,640

Non-current liabilities

Other 53 160

Provision for share awards 92 30

Total liabilities 32,320 36,498

Total non-current liabilities 4,552 4,831

Shareholders' equity

Net assets

Capital surplus 4,538 4,538

Share capital 3,030 3,030

Treasury shares (7,040) (7,012)

Retained earnings 37,594 42,460

Accumulated other comprehensive income

Total shareholders' equity 38,122 43,015

Total accumulated other comprehensive income (300) (350)

Foreign currency translation adjustment (300) (350)

Total net assets 37,821 42,665

Total liabilities and net assets 70,142 79,163

Quarterly Consolidated Statement of Comprehensive Income

Nine months ended December 31

For the nine months ended December 31, 2024

(Millions of yen) For the nine months ended

December 31, 2025

Profit 5,063 6,696

Other comprehensive income

Foreign currency translation adjustment (14) (49)

Total other comprehensive income (14) (49)

Comprehensive income 5,049 6,646

Comprehensive income attributable to

Comprehensive income attributable to non-controlling

interests - -

1. Quarterly Consolidated Statement of Cash Flows

   For the nine months ended December 31, 2024

   (Millions of yen) For the nine months ended

   December 31, 2025

   Cash flows from operating activities

   Depreciation 932 1,327

   Profit before income taxes 7,833 8,187

   Amortization of long-term prepaid expenses 561 386

   Amortization of intangible assets 356 982

   Impairment losses 318 571

   Increase (decrease) in provision for bonuses (248) (989)

   Increase (decrease) in allowance for doubtful accounts 0 (2)

   Increase (decrease) in provision for bonuses for directors (and other officers)

   13 (15)

   Interest expenses 9 30

   Interest and dividend income (0) (5)

   Head office relocation expenses - 70

   Compensation for forced relocation (194) -

   Decrease (increase) in inventories (3,968) (4,502)

   Decrease (increase) in trade receivables (2,962) (2,608)

   Increase (decrease) in trade payables 1,735 1,172

   Decrease (increase) in other current assets 53 162

   Share of loss (profit) of entities accounted for using equity method

   (472)

   4

   Increase (decrease) in other current liabilities 773 (115)

   Other, net 27 (61)

   Loss on sales of shares of subsidiaries and associates 379 -

   Interest and dividends received 0 5

   Subtotal 5,147 4,596

   Proceeds from compensation for forced relocation 194 -

   Interest paid (9) (30)

   Income taxes paid (982) (3,776)

   Payments for head office relocation expenses - (124)

   Cash flows from investing activities

   Net cash provided by (used in) operating activities 4,351 670

   Payments for asset retirement obligations (37) (139)

   Purchase of property, plant and equipment (1,932) (5,262)

   Purchase of long-term prepaid expenses (248) (554)

   Purchase of intangible assets (2,261) (907)

   Proceeds from refund of guarantee deposits 45 697

   Payments of guarantee deposits (762) (296)

   Purchase of shares of subsidiaries and associates (70) -

   Net decrease (increase) in short-term loans receivable from subsidiaries and associates

   (5)

   (6)

   Collection of long-term loans receivable from subsidiaries and associates

   -

   0

   Payments of long-term loans receivable from subsidiaries and associates

   (45) -

   Net cash provided by (used in) investing activities (5,317) (6,468)

   Cash flows from financing activities
   Net increase (decrease) in short-term borrowings	2,856	7,172
   Purchase of treasury shares	(0)	(0)
   Dividends paid	(1,493)	(1,792)
   Net cash provided by (used in) financing activities	1,361	5,379
   Effect of exchange rate change on cash and cash equivalents	(0)	16
   Net increase (decrease) in cash and cash equivalents	395	(401)
   Cash and cash equivalents at beginning of period	6,486	6,655
   Cash and cash equivalents at end of period	6,882	6,253

2. Notes to Quarterly Consolidated Financial Statements

(Notes on going concern assumption) Not applicable.

(Notes in case of significant changes in shareholders' equity) Not applicable.

(Segment information, etc.) [Segment information]

1. For the nine months ended December 31, 2024 (from April 1, 2024 to December 31, 2024)

   Information is omitted, as the Group's reportable segment consists of the single retail apparel segment.

2. For the nine months ended December 31, 2025 (from April 1, 2025 to December 31, 2025)

   Information is omitted, as the Group's reportable segment consists of the single retail apparel segment.

   (Significant subsequent events) Transfer of shares in a subsidiary

   1. On January 29, 2026, the Company entered into a share transfer agreement with Gyet Co., Ltd. ("Gyet") to transfer all shares held by the Company in COEN CO., LTD. ("COEN"), a consolidated subsidiary.

   2. Reason for the share transfer

      The Company recognizes that the collaboration with Gyet, a company actively involved in M&A and brand restructuring within the apparel and wellness sectors, and with GF Holdings Inc., which has long-standing extensive expertise and strong execution capabilities in brand revitalization, with whom Gyet has formed a strategic alliance, will make it possible to realize the Company's policy of selection and concentration and improve COEN's profitability.

   3. Overview of the counterparty of the share transfer Gyet Co., Ltd.

   4. Schedule of the share transfer

      1. Date of the share transfer agreement: January 29, 2026

      2. Date of the share transfer: March 2, 2026 (Scheduled)

   5. Overview of the subsidiary to be transferred

      1. Name: COEN CO., LTD.

      2. Business description: Planning, manufacturing and sales of apparel

      3. Transactions with the Company: Four directors of the Company are serving as officers of COEN. The

         Company also engages in business consignment and other transactions with COEN.

   6. Number of shares to be transferred, transfer price, and status of shares held before and to be held after the transfer (Scheduled)

      1. Number of shares held before the transfer: 2,000 shares

         (Number of voting rights: 2,000) (Percentage of voting rights: 100%)

      2. Number of shares to be transferred: 2,000 shares

         (Number of voting rights: 2,000)

      3. Transfer price: 200 million yen

      4. Number of shares to be held after the transfer: 0 shares

         (Number of voting rights: 0)

   7. Future outlook

Upon completion of the share transfer, COEN will no longer be included within the scope of consolidated subsidiaries. The impact of the share transfer on the Company's full-year consolidated financial results for the fiscal year ending March 31, 2026 is currently under review as a certain amount of debt forgiveness to COEN will arise in connection with the share transfer, and the amount of net assets of COEN at the time of its deconsolidation has not yet been finalized.