United Arrows : Consolidated Financial Results for the Six Months Ended September 30, 2025

November 7, 2025

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 of reporting date: November 13, 2025

Scheduled date to commence dividend payments: December 5, 2025 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 six months ended September 30, 2025 (April 1, 2025 to September 30, 2025)
   1. Consolidated operating results (cumulative) (Percentages indicate year-on-year changes.)

      	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
      Six months ended	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      September 30, 2025	73,713	8.0	2,378	(19.5)	2,508	(26.2)	1,127	(40.6)
      September 30, 2024	68,265	11.9	2,953	66.4	3,397	55.6	1,898	33.1

      Note: Comprehensive income	For the six months ended September 30, 2025:	¥1,061 million	[(44.9)%]
      	For the six months ended September 30, 2024:	¥1,926 million	[39.6%]

      	Basic earnings per share	Diluted earnings per share
      Six months ended	Yen	Yen
      September 30, 2025	40.84	-
      September 30, 2024	68.77	-

      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
   September 30, 2025	71,992	37,634	52.3	1,362.57
   March 31, 2025	70,142	37,821	53.9	1,369.92

   Reference: Equity

   As of September 30, 2025: ¥37,634 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
   	Yen	Yen	Yen	Yen	Yen
   Fiscal year ended March 31, 2025	-	17.00		46.00	63.00
   Fiscal year ending March 31, 2026	-	20.00
   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 semi-annual 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 September 30, 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 September 30, 2025	2,593,349 shares
      As of March 31, 2025	2,609,152 shares

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

• The financial statements for the second quarter (interim period) are not subject to review by a certified public accountant or auditing firm.

• 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 Semi-annual 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. Semi-annual Consolidated Financial Statements and Principal Notes 5

   1. Semi-annual Consolidated Balance Sheet 5

   2. Semi-annual Consolidated Statements of Income and Comprehensive Income 7

      Semi-annual Consolidated Statement of Income 7

      Semi-annual Consolidated Statement of Comprehensive Income 8

   3. Semi-annual Consolidated Statement of Cash Flows 9

   4. Notes to Semi-annual Consolidated Financial Statements 10

(Notes on going concern assumption) 10

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

(Segment information, etc.) 10

1. Qualitative Information on Semi-annual Financial Results

   1. Explanation of Operating Results

      During the six months ended September 30, 2025, the Japanese economy was making a moderate recovery 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 slow sales of fall merchandise due to unprecedented heat.

      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, from the second half of the summer through early autumn, we launched multiple advertising and sales promotion campaigns across all our brands in coordination with efforts to enhance our high-summer and late-summer merchandise lineup. These and other initiatives proved effective, resulting in stable sales with year-on-year growth of 5.1% in non-consolidated retail and online existing store sales.

      The gross margin declined year on year on a non-consolidated basis primarily due to an increase in sales from marked down products in the second quarter. However, the margin remained at the highest level since the six months ended September 30, 2014 due to the contribution of more appropriate pricing in sale strategies 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.

      In order to strengthen 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 today, we have resolved to enter into a basic agreement with COEN CO., LTD. to proceed with concrete discussions on the transfer of all shares held by us to Gyet Co., Ltd.

      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 and limited-time stores 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. Both brands have been contributing to the expansion of our reach to new customer segments, including younger demographics.

      For our global expansion, sales at our first directly-operated store in mainland China, which opened in

      January 2025, have been strong and exceeding the plan. We will continue to prepare to open stores, primarily in Tier-1 cities in China. 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. Several key indices have shown favorable trends. For example, sales by members posted double-digit year-on-year growth, and the ratio of members who made multiple purchases over the year also increased. The usage of our in-house ecommerce app, which was renewed in the previous fiscal year, has also continued to increase, and growth in the number of active users and products views has led to higher sales through the app.

      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 ten stores and closed one store in the trend-conscious market and opened four stores in the basic trend-conscious market. As a result, as of September 30, 2025, the number of retail stores was 224 and the total number of stores including outlets was 251.

      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 two stores for a total of 76 as of July 31, 2025, UNITED ARROWS TAIWAN LTD. opened three stores for a total of 13 stores as of July 31, 2025, and UNITED ARROWS SHANGHAI LTD. opened one store for a total of one store as of June 30, 2025.

      As a result of the above, the Group, as a whole, opened 20 stores and closed one store, and as of September 30, 2025, the number of stores in the Group was 341.

      As a result, consolidated business performance for the six months ended September 30, 2025 consisted of net sales of ¥73,713 million (up 8.0% year on year), gross profit of ¥38,821 million (up 8.0% year on year), and gross margin remained at the same level year on year at 52.7%. Selling, general and administrative expenses were ¥36,443 million (up 10.4% 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 1.1 percentage points to 49.4%.

      Consequently, for the six months ended September 30, 2025, operating profit was ¥2,378 million (down 19.5% year on year), ordinary profit was ¥2,508 million (down 26.2% year on year), and profit attributable to owners of parent was ¥1,127 million (down 40.6% year on year).

   2. Explanation of Financial Position

      Assets

      Current assets increased by ¥868 million (1.9%) from the end of the previous fiscal year to ¥45,685 million. This was mainly attributable to an increase in merchandise of ¥6,130 million, despite decreases in cash and deposits of ¥3,721 million and accounts receivable - other of ¥2,359 million.

      Non-current assets increased by ¥981 million (3.9%) from the end of the previous fiscal year to ¥26,306 million. This was mainly attributable to an increase in property, plant and equipment of ¥2,211 million as a result of store openings, despite decreases in intangible assets of ¥328 million, guarantee deposits of ¥516 million, and deferred tax assets of ¥358 million.

      Liabilities

      Current liabilities increased by ¥1,787 million (6.4 %) from the end of the previous fiscal year to ¥29,555 million. This was mainly attributable to increases in notes and account payable - trade of ¥ 3,831 million and short-term borrowings of ¥2,872 million, despite decreases in accounts payable - other of ¥2,149 million, income taxes payable of ¥1,929 million, and provision for bonuses of ¥704 million.

      Non-current liabilities increased by ¥249 million (5.5%) from the end of the previous fiscal year to ¥4,801 million. This was mainly attributable to an increase in asset retirement obligations of ¥169 million due to store openings.

      Net assets

      Total net assets decreased by ¥186 million (0.5%) from the end of the previous fiscal year to ¥37,634 million. This was mainly attributable to a decrease of ¥1,275 million due to the payment of dividends, despite an increase in retained earnings of ¥1,127 million due to the reporting of profit attributable to owners of parent.

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

   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. Semi-annual Consolidated Financial Statements and Principal Notes

1. Semi-annual Consolidated Balance Sheet

   (Millions of yen)

   As of March 31, 2025

   As of September 30, 2025

   Assets
   Current assets
   Cash and deposits	6,665	2,944
   Notes and accounts receivable - trade	185	187
   Merchandise	24,191	30,320
   Supplies	539	560
   Accounts receivable - other	12,301	9,942
   Short-term loans receivable from subsidiaries and associates	3	5
   Other	930	1,726
   Total current assets	44,816	45,685
   Non-current assets
   Property, plant and equipment
   Buildings and structures, net	5,919	7,119
   Machinery and equipment, net	469	1,224
   Land	569	569
   Construction in progress	230	71
   Other, net	1,016	1,430
   Total property, plant and equipment	8,205	10,416
   Intangible assets
   Software	1,663	4,843
   Software in progress	4,113	605
   Other	28	27
   Total intangible assets	5,804	5,476
   Investments and other assets
   Long-term loans receivable from subsidiaries and associates	23	20
   Guarantee deposits	7,624	7,108
   Deferred tax assets	2,204	1,846
   Other	1,464	1,440
   Allowance for doubtful accounts	(2)	(2)
   Total investments and other assets	11,314	10,414
   Total non-current assets	25,325	26,306
   Total assets	70,142	71,992

   (Millions of yen)

   As of March 31, 2025		As of September 30, 2025
   Liabilities
   Current liabilities
   Notes and accounts payable - trade	11,636	15,467
   Electronically recorded obligations - operating	929	877
   Short-term borrowings	1,028	3,900
   Accounts payable - other	7,133	4,985
   Income taxes payable	2,633	703
   Provision for bonuses	2,043	1,339
   Provision for bonuses for directors (and other officers)	48	22
   Provision for share awards	-	90
   Asset retirement obligations	211	140
   Other	2,103	2,029
   Total current liabilities	27,767	29,555
   Non-current liabilities
   Asset retirement obligations	4,407	4,576
   Provision for share awards	92	27
   Other	53	198
   Total non-current liabilities	4,552	4,801
   Total liabilities	32,320	34,357
   Net assets
   Shareholders' equity
   Share capital	3,030	3,030
   Capital surplus	4,538	4,538
   Retained earnings	37,594	37,446
   Treasury shares	(7,040)	(7,012)
   Total shareholders' equity	38,122	38,002
   Accumulated other comprehensive income
   Foreign currency translation adjustment	(300)	(367)
   Total accumulated other comprehensive income	(300)	(367)
   Total net assets	37,821	37,634
   Total liabilities and net assets	70,142	71,992

2. Semi-annual Consolidated Statements of Income and Comprehensive Income Semi-annual Consolidated Statement of Income

   Six months ended September 30

   ‌(Millions of yen)

   For the six months ended September 30, 2024		For the six months ended September 30, 2025
   Net sales	68,265	73,713
   Cost of sales	32,312	34,891
   Gross profit	35,953	38,821
   Selling, general and administrative expenses	32,999	36,443
   Operating profit	2,953	2,378
   Non-operating income
   Interest income	0	5
   Foreign exchange gains	-	124
   Rental income	6	4
   Share of profit of entities accounted for using equity method	300	-
   Compensation for forced relocation	194	-
   Other	63	53
   Total non-operating income	566	187
   Non-operating expenses
   Interest expenses	5	15
   Foreign exchange losses	92	-
   Rental expenses	6	0
   Share of loss of entities accounted for using equity method	-	2
   Other	17	38
   Total non-operating expenses	121	57
   Ordinary profit	3,397	2,508
   Extraordinary losses
   Loss on retirement of non-current assets	178	61
   Impairment losses	209	426
   Head office relocation expenses	-	70
   Total extraordinary losses	388	558
   Profit before income taxes	3,009	1,949
   Income taxes - current	985	462
   Income taxes - deferred	125	359
   Total income taxes	1,110	821
   Profit	1,898	1,127
   Profit attributable to owners of parent	1,898	1,127

   Semi-annual Consolidated Statement of Comprehensive Income

   Six Months Ended September 30

   ‌(Millions of yen)

   For the six months ended September 30, 2024		For the six months ended September 30, 2025
   Profit	1,898	1,127
   Other comprehensive income
   Foreign currency translation adjustment	28	(66)
   Total other comprehensive income	28	(66)
   Comprehensive income	1,926	1,061
   Comprehensive income attributable to
   Comprehensive income attributable to owners of parent	1,926	1,061
   Comprehensive income attributable to non-controlling interests	-	-

3. Semi-annual Consolidated Statement of Cash Flows

   ‌(Millions of yen)

   For the six months ended September 30, 2024		For the six months ended September 30, 2025
   Cash flows from operating activities
   Profit before income taxes	3,009	1,949
   Depreciation	565	846
   Amortization of intangible assets	228	633
   Amortization of long-term prepaid expenses	372	254
   Impairment losses	209	426
   Increase (decrease) in provision for bonuses	123	(703)
   Increase (decrease) in provision for bonuses for directors (and other officers)	(0)	(25)
   Increase (decrease) in allowance for doubtful accounts	0	-
   Interest and dividend income	(0)	(5)
   Interest expenses	5	15
   Compensation for forced relocation	(194)	-
   Head office relocation expenses	-	70
   Decrease (increase) in trade receivables	1,403	2,305
   Decrease (increase) in inventories	(5,556)	(6,136)
   Decrease (increase) in other current assets	(65)	(379)
   Increase (decrease) in trade payables	4,422	3,778
   Increase (decrease) in other current liabilities	(722)	(938)
   Share of loss (profit) of entities accounted for using equity method	(300)	2
   Other, net	72	(81)
   Subtotal	3,573	2,012
   Interest and dividends received	0	5
   Interest paid	(5)	(15)
   Proceeds from compensation for forced relocation	194	-
   Payments for head office relocation expenses	-	(124)
   Income taxes paid	(455)	(2,345)
   Net cash provided by (used in) operating activities	3,308	(467)
   Cash flows from investing activities
   Purchase of property, plant and equipment	(911)	(4,101)
   Payments for asset retirement obligations	(28)	(114)
   Purchase of intangible assets	(1,410)	(806)
   Purchase of long-term prepaid expenses	(115)	(353)
   Payments of guarantee deposits	(615)	(174)
   Proceeds from refund of guarantee deposits	15	688
   Net decrease (increase) in short-term loans receivable from subsidiaries and associates	-	(1)
   Collection of long-term loans receivable from subsidiaries and associates	-	0
   Net cash provided by (used in) investing activities	(3,066)	(4,861)
   Cash flows from financing activities
   Net increase (decrease) in short-term borrowings	2,698	2,872
   Purchase of treasury shares	(0)	-
   Dividends paid	(1,052)	(1,274)
   Net cash provided by (used in) financing activities	1,645	1,597
   Effect of exchange rate change on cash and cash equivalents	2	4
   Net increase (decrease) in cash and cash equivalents	1,889	(3,727)
   Cash and cash equivalents at beginning of period	6,486	6,655
   Cash and cash equivalents at end of period	8,376	2,927

4. Notes to Semi-annual 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 six months ended September 30, 2024 (from April 1, 2024 to September 30, 2024)

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

2. For the six months ended September 30, 2025 (from April 1, 2025 to September 30, 2025)

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