1. Consolidated results for the second quarter of the fiscal year ending May 2024 (May 16, 2023 to November 15, 2023)

(2) Consolidated financial position

2. 2. Dividend status

(Note) Whether or not there is any revision from the recently announced dividend forecast:Nothing

3. Consolidated earnings forecast for the fiscal year ending May 2024 (May 16, 2023 to May 15, 2024)

(Note) Whether or not there is any revision from the latest announced business forecast:Nothing

* Notes

(1) Changes in significant subsidiaries during the current quarterly consolidated cumulative period (changes in specified subsidiaries due to changes in the scope of consolidation):Nothing

(2) Application of accounting treatment specific to the preparation of quarterly consolidated financial statements:Yes

(3) Changes in accounting policies, changes in accounting estimates, and restatements of revisions

① Changes in accounting policies due to revisions to accounting standards, etc .:Nothing

(2) Changes in accounting policies other than (1):Nothing

③ Change of accounting estimateNothing

④ Correction redisplayNothing

(4) Number of issued shares (common stock)

* Quarterly financial statements are not subject to quarterly reviews by certified accountants or audit corporations.

* Explanation of proper use of business forecasts and other special notes

The forecast figures contained in this document are forecasts based on currently available information and contain many uncertainties. Actual results may differ from the above figures due to changes in business conditions. Please refer to page 3 of the attached materials for matters related to the above forecasts.

○ Contents of attached materials

1. Qualitative information on quarterly financial results

(1) Explanation of operating results

The economic situation during the current second quarter consolidated cumulative period (May 16, 2023 to November 15, 2023) is that the economy is slowly recovering as movement restrictions are lifted due to the transition of the new coronavirus infection to Category 5. This is a trend. However, the outlook remains uncertain due to rising prices, persistently high energy costs, and the risk of economic recession due to global financial tightening.

In the drugstore industry, although the competitive environment remains fierce as companies expand their store openings, many companies are seeing strong business performance as cosmetics and food products are growing amid a recovery in the flow of people and inbound demand. You can In addition, demands from the capital market for efforts to improve corporate value are becoming stronger, and moves toward M&A to expand scale continue.

Under these circumstances, our group aims to achieve the new medium-term management plan by improving the accuracy of store openings and promoting renovations, and by expanding the number of affiliated stores, securing the number of prescriptions by using online, and promoting PB (PB). Under the private brand strategy, we have been working on increasing the sales composition ratio by developing new products and promoting sales of existing products, and under the DX strategy, we have been working on introducing our own payment service, utilizing customer data for sales promotions, and developing IT systems. Additionally, in terms of performance management, we have worked to improve profitability and reduce selling, general and administrative expenses by strengthening forecast and actual analysis functions.

Regarding store development, we are working to further strengthen our dominance in existing areas, as well as renovating and closing unprofitable stores to strengthen our competitiveness.From the beginning of the fiscal year, we have opened 69 new stores, taken over the business of one store, and closed 44 stores. . As a result, the number of directly managed Group stores at the end of the fiscal year was 2,615. Regarding our group stores in Thailand, we have opened one new store and closed one store, bringing the number of stores in Thailand to 18 as of November 15, 2023.

The store openings and closings of the Group are as follows (unit: store)

In addition to the above, we have 18 overseas stores and 7 franchise stores.

*From the beginning of the current fiscal year, we have revised the counting standards for the number of stores such as EC stores and FC stores, and the number of stores at the beginning of the fiscal year is partially different from the number of stores at the end of the previous fiscal year.

There is a difference.

As a result, our business results for the second quarter of the current consolidated cumulative period were as follows: Sales of 515,713 million yen (up 6.5% year on year), operating income of 27,147 million yen (up 9.9% year on year), and ordinary income of 275 million yen. Net income attributable to owners of parent amounted to 16,071 million yen (up 9.8%).

(2) Explanation of financial position

(Status of assets, liabilities and net assets)

Total assets at the end of the current second quarter consolidated accounting period increased by 10,833 million yen compared to the end of the previous consolidated fiscal year, to 550,663 million yen. The main reason was the acquisition of tangible fixed assets associated with new store openings.

Total liabilities increased by 8,628 million yen from the end of the previous fiscal year to 244,314 million yen. The main reason was an increase in accounts payable due to new store openings, etc.

Total net assets increased by 2,204 million yen from the end of the previous fiscal year to 306,348 million yen.

As a result of the above, the equity ratio decreased by 0.1 point to 51.1%.

(Cash flow situation)

Cash and cash equivalents (hereinafter referred to as "funds") for the second quarter of the current consolidated cumulative period amounted to 65,820 million yen, a decrease of 13,096 million yen compared to the end of the previous fiscal year.

The status of each cash flow and their factors in the current second quarter consolidated cumulative period are as follows.

(Cash flow from operating activities)

Funds obtained as a result of operating activities during the second quarter of the current consolidated cumulative period amounted to 30,602 million yen (compared to 19,710 million yen used in the same period of the previous year). This was mainly due to positive factors such as quarterly net income before taxes and other adjustments of 27,058 million yen, an increase in trade payables of 8,274 million yen, and depreciation and amortization of 6,328 million yen. This was due to negative factors such as corporate taxes paid of 8,239 million yen and an increase in inventories of 6,116 million yen.

(Cash flow from investment activities)

Funds used in investment activities during the second quarter of the current consolidated cumulative period amounted to 20,126 million yen (23.5% increase compared to the same period last year). This was mainly due to expenditures of 16,920 million yen for the acquisition of property, plant and equipment associated with new store openings, and expenditures of 2,375 million yen for the acquisition of software.

(Cash flow from financing activities)

Funds used in financing activities during the second quarter of the current consolidated cumulative period amounted to 23,573 million yen (171.1% increase compared to the same period last year). This was mainly due to expenditures of 11,768 million yen for the acquisition of subsidiary shares that did not involve a change in the scope of consolidation, 6,974 million yen in dividend payments, and 3,600 million yen in expenditures for repayment of long-term loans. there is.

(3) Explanation of future forecast information such as consolidated earnings forecasts

There are no changes to the full-year business forecast announced on June 23, 2023.

2. 2. Quarterly consolidated financial statements and main notes

(2) Quarterly consolidated income statement and quarterly consolidated income statement

(Quarterly consolidated income statement)

(Quarterly Consolidated Comprehensive Income Statement)