To Our Shareholders

I would like to thank all of you very much for your continued support.

During the fiscal year ended March 2026, the domestic economy showed signs of a gradual recovery against the backdrop of improving employment and income conditions; however, the outlook remains uncertain due to soaring crude oil prices and supply chain disruptions driven by escalating international tensions, as well as volatile exchange rates. In the furniture and interior design industry, the business environment remained challenging due to soaring raw material prices and logistics costs, as well as intensifying sales competition. However, the B2C e-commerce market for furniture and interior design, in which our company operates, continues to expand steadily. As such, the business environment surrounding our company is one in which significant changes and opportunities for growth coexist.

Regarding LOWYA, our core business, we actively expanded our network of physical stores to expand customer touchpoints as we work toward building an OMO-style D2C business, while drawing on the strengths that we have cultivated over the years: our ability to attract customers, product design capabilities, and pricing advantages. This fiscal year, we opened five new stores: one in Anjo City, Aichi Prefecture, in April 2025; one in Musashimurayama City, Tokyo, in June 2025; one in Misato City, Saitama Prefecture, in November 2025; and one each in Kasuya District, Fukuoka Prefecture, and Shibuya City, Tokyo, in December 2025. Combined with the physical stores opened in the previous fiscal year, this brings the total number of stores as of the end of the fiscal year to 13. As a result, our OMO strategy, which seamlessly integrates the three touchpoints of social media, physical stores, and LOWYA’s own e-commerce site, has made smooth progress. We will continue to diversify our channels for connecting with customers, improve brand recognition, and respond flexibly to various customer needs.

In terms of profit and loss, although we incurred one-time costs associated with opening new physical stores, we maintained stable control over our cost-to-sales ratio through measures such as entering into foreign exchange forward contracts. As a result of our continued efforts in company-wide cost management, primarily focused on optimizing marketing expenses, we achieved a significant increase in profit compared to the previous fiscal year.

Regarding our DOKODEMO business, while total transaction volume showed a slight downward trend due to factors such as the impact on US distribution following the abolition of the US de minimis rule, the number of members and app downloads has been steadily increasing thanks to generative AI-driven improvements in translation accuracy and the implementation of measures to enhance usability. We will also continue our efforts to increase total transaction volume.

We sincerely appreciate your continued understanding and support.

OMO:Online Merges with Offline
D2C: Direct to Consumer

Tomokazu Ukishiro
President and CEO
June 2026