Yoshitsu Co., Ltd Price & Performance (TKLF)

With that, I will now turn the call over to Ms. Cixi Wang, the company's representative. Please go ahead.

Thank you, operator, and everyone for joining Tokyo Lifestyle's 1st 6 months of fiscal year 2025 earnings conference call today. On our call today, I will give an overall of our performance of the 1st 6 months of fiscal year 2025, followed by a detailed financial review of the company's results. In the 1st 6 months of fiscal year 2025, we are pleased to report significant success in our business transformation and expansion in key markets like Hong Kong, South Asia, Europe and North America. Our total revenue saw a significant growth of 22.1 percent to $98,000,000 for the 6 months ended September 30, 2024. As a result of the robust performance of our extensive customer base, particularly the expanding franchise network and dedicated wholesale customer base. As of September 30, 2024, we have adjusted our business strategies to optimize resource allocation, enhance operational efficiency and drive profitability. In response to market trends and increased competitive in Japan and Hong Kong, we have continued to transition underperforming directly operated physical store into franchise stores, close underperforming online stores and refine our product offering. Meanwhile, our global market expansion has progressively notably renewing from our 5 directly operated store in the United States and Canada has partially offset and revenue decline in Japan and Hong Kong.

On the other hand, our franchise and wholesale business line have demonstrated significant growth with the revenue increasing by 53.8 percent accounting for 88.7% of our total revenue during this period. We believe that our continued focus on exploring new opportunities while strengthening loyalty among existing customers through high quality products and services has contributed to a steadily expanding customer base and strong financial performance. Our growth strategy and optional achievements have been recognized by both the market and industry. Notably, we are honored to have received a Gold Steve Award in the Company of the Year Retail Medium Size category at 21st Annual International Business Award in September 2024. Behind the milestone achievement lies yet Abbation's growth strategy and the solid financial performance. We are grateful that our efforts and innovation over the years had garnered recognition both domestically and internationally. Looking ahead, we remain committed to driving sustainable growth and exploring new opportunities while strengthening loyalty among our existing customers. In Asian markets, we are strengthening collaboration with existing franchises and actively seeking new partnerships to drive further development. We have supported our partners in opening new franchise stores and established strategic cooperation aimed at building a robust franchise distribution network.

We believe these efforts will enhance our profitability and brand recognition alongside continued expansion. At the same time, we are actively exploring opportunities in global markets and new business sectors. Recently, we opened a new Lewatake store at Fashion Show Mall in Las Vegas, launched online platform for the Lewatakeya brand in the U. K. And Canada, and formed a joint venture to develop the trending car retail business. This strategy initiatives reflect our efforts to further strengthen our global business presence and in house brand recognition worldwide. We remain focused on strategic priorities, strengthening our current market footprint closely monitoring market trends and customer preferences, improving operational efficiency and profitability, optimizing our distribution network and commercial outlets and exploring new partnership opportunities. We are confident that these efforts will contribute to a bright future and deliver greater value for our company and shareholders. Now, I would like to share our financial results highlights for the 1st 6 months of fiscal year 2025. Our total revenue is increased by 32.1% from $74,200,000 to $98,000,000 for the 6 months ended September 30, 2024. During the period, our directly operated store and online sales channels contributed $11,000,000 in revenue. Despite challenging market conditions, notably revenue from franchised stores and wholesale customers grew by 53.8% to $86,900,000 Meanwhile, the number of wholesale customers and franchises increased by 30 from 171 as of March 31, 2024 to 201 as of September 30, 2024.

This growth results from our continuous efforts to expand product offering with the total stock keeping units rising from approximately 141,500 to 165,200 during the period. In addition, the increase was also due to the increased revenue generated from franchised stores, which previously was recognized on their physical stores as mentioned above, as well as the increased revenue from the new wholesale customers because we continue to develop our customer base by entering into business relationships with new wholesale customers during the 6 months ended September 30, 2024. Thanks to our robust and flexible strategies, income from operations significantly by 867.8 percent to 3 point 6 months ended September 30, 2024. Gross profit was $12,100,000 for the 6 months ended September 30, 2024, increased by 28.4 percent from $9,500,000 for the same period of last year. Operating expenses down by 2.2% to $8,900,000 reflecting our cost control measures even as we increased the headcount to support rapid expansion. Net income decreased by 31.6 percent to $1,300,000 mainly due to increased loss from foreign currency exchange as well as change in fair value of warrant liabilities. Basic and diluted earnings per share was $0.03 compared to $0.05 for the same period of last year.

As of September 30, 2024, the company had cash of $3,100,000 $104,300,000 accounts receivable balance due from 3rd parties. Approximately 28.3% of balance has been subsequently collected. The collection of such receivable made cash available for use in our operational as working capital if necessary. As of September 30, 2024, the company's merchandise inventories balance amounted to approximately $7,400,000 which the company believes can be sold quickly based on the analysis of the current trend in demand for our products. For the 6 months ended September 30, 2024, net cash used in operating activities was $2,000,000 net cash used in investing activities was $600,000 net cash provided by financing activities was $2,500,000 Looking ahead, we remain committed to enhancing financial performance through robust business strategies, disciplined cost management and strategic investments. We will remain focused on identifying new revenue streams and are confident that these efforts will drive sustainable long term values for our shareholders. Thank you so much for joining this conference call today. If you have any questions, please contact us through e mails at irystbk.co.jp or reach our IR counsel, Ascent Investor Relations, at investorsascentir.com. Management will respond to your question as soon as possible. We appreciate your interest and support in Tokyo Life This concludes our call today, and we thank you all for listening in.

We This concludes our call today and we thank you all for listening in. Goodbye and have a wonderful day.