Isetan Mitsukoshi : Business Results Explanation Meeting Second Quarter of the Fiscal Year Ending March 31, 2024

Isetan Mitsukoshi Group

Business Results Explanation Meeting

Second Quarter of the

Fiscal Year Ending March 31, 2024

November 10, 2023

1. Results for the Second Quarter of the Fiscal Year Ending March 2024

1. Full Year Plan for the Fiscal Year Ending March 2024

1. Progress of Medium-term Management Plan

1. Results for the Second Quarter of the Fiscal Year Ending March 2024

1. Full Year Plan for the Fiscal Year Ending March 2024

1. Progress of Medium-term Management Plan

Consolidated Financial Results (Second Quarter)

・Strong Gross sales: Significant increase in sales due to "High sensitivity, fine quality" strategy and CRM strategy that connects with individual customers

・Continued control of SG & A expenses: Continued steady cost control

・Operating income and recurring income doubled from a year ago: Highest profit in the first half after the business integration of Isetan and Mitsukoshi.

(0.1 billions of yen)	2Q Cumulative	YoY	YoY difference
(April-September)
Gross sales	5,614	113.3%	+657
Net sales	2,485	111.5%	+256
Gross profit	1,478	112.1%	+159
Selling, general and	1,276	103.8%	+46
administrative expenses
Operating income	201	225.7%	+112
Recurring income	229	240.1%	+133
Net income	148	191.3%	+70

1

Sales Trends of Isetan Mitsukoshi Existing Stores Compared to FY 2018

・Monthly sales excluding inbound and inbound rose further into the second quarter

・In both cases, steady progress over the full-year plan (109% excluding inbound, 80% inbound) as of disclosure forecast at August continued

Monthly Net Sales Growth Rate of Isetan

Mitsukoshi Compared to FY 2018

September 2022 to September 2023

109% compared

to FY 2018

80% compared to

FY 2018

*	Excludes Isetan Sagamihara, Isetan Fuchu and Ebisu Mitsukoshi	2
*	Before adoption of revenue recognition standards, based on gross sales

Domestic Major department stores

(gross sales for the first half of the fiscal year by stores/each company)

・Isetan Shinjuku Main Store sales for the first half were the highest ever following the first quarter ・Regional companies increased sales thanks to the successful implementation of strategies.

Implementation of base network initiatives

(0.1 billions of yen) Gross sales	YoY	YoY	(0.1 billions of yen) Gross sales	YoY	YoY
difference	difference
Isetan Shinjuku	1,703	115.5%	+228	Sapporo Marui	275	113.3%	+32
Main Store	Mitsukoshi
Mitsukoshi	699			Sendai	128
Nihombashi Main	110.5%	+66	102.2%	+2
Mitsukoshi
Store
Ginza Mitsukoshi	471	142.9%	+141	Nagoya	288	108.7%	+22
Mitsukoshi
Isetan Tachikawa	148	108.6%	+11	Niigata	168	102.2%	+3
Store	Mitsukoshi Isetan
Isetan Urawa	178	106.2%	+10	Iwataya	561	112.9%	+64
Store	Mitsukoshi

Total Isetan	3,201				Total of five	1,422
116.7%	+458		major regional	109.7%	+125
Mitsukoshi
				companies

3

Increase (decrease) in consolidated SG & A expenses (first half of the fiscal year)

・Cost structure reform: -3.2 billion yen as of the end of Q2, running exceeding -4 billion yen (disclosure forecast at August)

・Price increase: + 1.7 billion yen, falling below expectations, mainly in utilities

				Breakdown of year-on-year changes
					Change in the current year
	2Q
(0.1 billions of yen)	Cumulative Year-on-Year		Cost Structure	Sales Linked	Price Increase	New	Other
(April-	Changes		Reform	Consolidation
	September)
Personnel	445	+4		(18)		+9	+12	+1
expenses
Advertising	48	+7			+7
expenses
Lease payments	162	+3		(4)	+1		+5	+2
Business
consignment	146	+3		(5)		+4	+2	+2
expenses
Depreciation and	114	(2)					+1	(4)
amortization
Utilities	50	+2		(3)		+4	+1
Other	309	+28		(2)	+19		+9	+1
Total	1,276	+46		(32)	+27	+17	+31	+3

4

Results by Segment (The first half of the fiscal year)

• Department store business : Substantial increase in sales due to the recovery of consumption and the successful promotion of strategies.
  Operating income increased sharply due to cost control.
• Credit and finance business : External transaction volume was steady. Operating income fell temporarily due to

	investments.
・ Real estate business	: Construction and interiors business sales were strong. Operating income declined due to a
	decrease in rental income.
(0.1 billions of yen)	Gross sales	YoY	Net sales	Operating	YoY difference
income
Department store	5,215	112.6%	2,085	167	+116
business
Credit & finance
business/ Customer	171	105.7%	156	14	(3)
organization
management business
Real estate business	110	121.5%	110	12	(8)

Other businesses *

116

165.3%

133

7

+7

Total

5,614

113.3%

2,485

201

+112

* Other businesses include adjustments.	5

1. Results for the Second Quarter of the Fiscal Year Ending March 2024

1. Full Year Plan for the Fiscal Year Ending March 2024

1. Progress of Medium-term Management Plan

Assumptions for Full Year Plan

• Gross sales werefurther revised up from the initial plan by implementing the "High sensitivity, fine quality" strategy and "CRM Strategy to Connect with Individual Customers" and promoting individual marketing to foreign customers in addition to Japanese customers.
• The initial plan for SG & A expenses was kept unchanged, as expenses were controlled by "Scientific analysis of department stores", despite the increase in expenses due to sales linkage and price increases.

Operating income of 48 billion yen and recurring income of

50 billion yen are planned.

Both plans are revised upward to substantially exceed maximum profit after the business integration of Isetan and Mitsukoshi.

6