Full Year 2024 Yoshitsu Co Ltd Earnings Call

Operator: Welcome to Yoshitsu's fiscal year 2024 earning conference call. During today's presentation, all parties will be enabled in an only mode. This conference is being recorded today on July 16, 2024.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to Yoshitsu's Fiscal Year 2024 Earnings Conference Call.

Operator: to Yoshitsu's fiscal year 2024 earnings conference call. During today's presentation, all parties will be in a listen-only mode.

During today's presentation, all parties will be in a listen-only mode.

Operator: This conference is being recorded today, July 16, 2024. If you have any objections, you may disconnect at this time. Joining us from Yoshitsu are the company's principal executive officer, Mr. Mike Kaniyama, the company's principal accounting and financial officer, Mr. Yuchiro Haga, and the company's representative, Ms. Sissy Wong. Ms. Wong will deliver the remarks of the company's chief executive officer and the company's principal accounting and financial officer in English. Before we continue, I would like to remind you that some of the information discussed on this call will contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended and as defined in the U.S. Private Securities Litigation Reform Act of 1995.

This conference is being recorded today, July 16, 2024. If you have any objections, you may disconnect at this time.

Operator: If you have any objections, you may disconnect at this time.

Operator: Joining us from Yoshitsu are the company's Principal Executive Officer, Mr. Mai Kanyama. The company's principal accounting and financial officer, Mr. Yuchiro Haga, and the company's representative, Mrs. Yuang.

Speaker Change: Joining us from Yoshitsu are the company's principal executive officer, Mr. Mai Kaniyama, the company's principal accounting and financial officer, Mr. Yuichiro Haga, and the company's representative, Ms. Sissy Wong.

Mrs. Yuang: Mrs. Yuang will deliver the remarks of the company's principal executive officer and company's principal accounting and financial officer in English.

Speaker Change: Ms. Sissy Wong will deliver the remarks of the Company's Principal Executive Officer and Company's Principal Accounting and Financial Officer in English.

Mrs. Yuang: Before we continue, I would like to remind you that some information discussed on this call will contain forward-looking statements within the meaning of Section 21-E of the Securities and Change Act of 1934, as amended, and as defined in the U.S. private securities litigation reform act of 1995. These four looking statements involve known and unknown risks and uncertainties.

Operator: These forward-looking statements involve known and unknown risks and uncertainty. The company undertakes no obligation to update forward-looking statements to reflect subsequent events or circumstances or changes in its expectations, except as may be required by law. Although the company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the company's registration statement and in its other filings with the SEC. With that, I will now turn the call over to Sissy Wong, the company Miss Wong, please go ahead.

Speaker Change: Before we continue, I would like to remind you that some information discussed on this call will contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995.

Mrs. Yuang: The company undertakes no obligation to update four looking statements to reflect subsequent occurring events or circumstances or changes in its expectations, except as may be required by law. Although the company believes that the expectations expressed in these four looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct.

Speaker Change: These forward-looking statements involve known and unknown risks and uncertainties.

Speaker Change: The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law.

Speaker Change: Although the company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct.

Mrs. Yuang: And the company causes investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the company's registration statement and in its other findings with the SEC.

Speaker Change: And the company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the company's registration statement and in its other filings with the SEC.

Mrs. Yuang: With that, I will now turn the call over to Sissy Wong, the company's representative. This long, please go ahead.

Speaker Change: With that, I will now turn the call over to Sissi Wong, the company's representative. Miss Wong, please go ahead.

Mrs. Yuang: Thank you, operator, and everyone for joining us to the fiscal year 2024 earnings conference call today. On our call today, I will give an overall of our performance for fiscal year 2024 and then share the details of the company's financial review. In fiscal year 2024, we are pleased that we have achieved the remarkable success in our newly launched luxury products, as well as our extension in key markets like Japan and Hong Kong, the United States and Canada. Our total revenue surge by 50.3% to $195.7 million in fiscal year 2024. Our strategic extension into North America, incorporating several new subsidiaries and opening new stores in the US and Canada, which has made a significant contribution to our revenue growth.

Sissy Wong: Thank you, operator, and everyone, for joining Yushidu's fiscal year 2024 earnings conference call today. On our call today, I will give an overview of our performance for fiscal year 2024 and then share the details of the company's financial review. In fiscal year 2024, we are pleased that we have achieved remarkable success with our newly launched luxury products, as well as our expansion in key markets like Japan and Hong Kong, the United States, and Canada.

Sissy Wong: Thank you, Operator and everyone for joining UC2's Fiscal Year 2024 Earnings Conference call today. On our call today, I will give an overall of our performance for Fiscal Year 2024 and then share the details of the company's financial review.

Sissy Wong: In fiscal year 2024, we are pleased that we have achieved remarkable success in our newly launched luxury products.

Sissy Wong: as well as our expansion in key markets like Japan and Hong Kong, the United States and Canada. Our total revenue surged by 50.3% to $195.7 million in fiscal year 2024.

Sissy Wong: Our total revenue surged by 50.3% to $195.7 million in fiscal year 2024. Our strategic expansion into North America, including several new subsidiaries and opening new stores in the U.S. and Canada, which has made a significant contribution to our revenue growth. We also introduced luxury products, significantly boosting sales in our directly operated physical stores, franchise stores, and among wholesale customers. Furthermore, we decided to concentrate our management resources on core businesses and improve operation efficiency. To mitigate online sales volatility, we strengthened our wholesale and franchise store network. These measures have enhanced our adaptability and resilience, and enabled us to withstand economic winds in the current market.

Speaker Change: Our strategic expansion into North America, incorporating several new subsidiaries and opening new stores in the U.S. and Canada, which has made significant contribution to our revenue growth.

Mrs. Yuang: We also introduced the luxury products, significantly boosting sales in our directly operated physical stores, franchise stores, and amount wholesale customers. Furthermore, we decided to concentrate our management to resolve this on core businesses and improve operation efficiently. To mitigate online sales, the volatility with grants are wholesale and franchise stores. Network. These measures have enhanced our adaptability and resilience, enable us to withstand economic at wins in the current market environment.

Sissy Wong: We also introduced luxury products, significant boosting sales in our directly operated physical stores, franchise stores, and among wholesale customers.

Sissy Wong: Furthermore, we decided to concentrate our management resources on core businesses and improve operation efficiency.

Sissy Wong: To mitigate online sales volatility, we strength our wholesale and franchise store networks.

Sissy Wong: These measures have enhanced our adaptability and resilience, enable us to withstand economic wins in the current market environment.

Mrs. Yuang: Looking ahead, we are dedicated to driving sustainable growth and creating long-term value for our shareholders. We believe in our re-bossing strategy and concerns in the verse to execute the dedication of our employees and unwilling support and trust from our partners and shareholders. We are continuing our efforts to explore self-opportunities. We also continue exploring new markets while enhancing our current presence. By analyzing customer trends in different regions, focusing on improving customer install experience, further expanding our distribution network, and exploring new partnership opportunities.

Sissy Wong: Looking ahead, we are dedicated to driving sustainable growth and creating long-term value for our shareholders. We believe in our revolutionary strategy and constant endeavors to execute the dedication of our employees and unwavering support and trust from our partners and shareholders. We are continuing our efforts to explore self-opportunity. We also continue exploring new markets while enhancing our current presence by analyzing customer trends in different regions, focusing on improving the customer installation experience, further expanding our distribution network, and exploring new partnership opportunities.

Sissy Wong: Looking ahead, we are dedicated to driving sustainable growth and creating long-term value for our shareholders.

Sissy Wong: We believe in our revolting strategy and constant endeavors to execute dedication of our employees and unwavering support and trust from our partners and shareholders.

Sissy Wong: We are continuing our efforts to explore self-opportunities.

Sissy Wong: We also continue exploring new markets while enhancing our current presence.

Sissy Wong: by analyzing customer trends in different regions, focusing on improving customer in-store experience, further expanding our distribution network, and exploring new partnership opportunities.

Mrs. Yuang: In particular, during the next three years, we intend to open 10 additional directly operated physical stores in Hong Kong and 50 new franchise stores in the US, Canada, Australia, New Zealand, the UK, Singapore, Malaysia, Thailand, and Taiwan. Furthermore, we strive to improve our profitability by saving operating expenditure and transforming some of the directly operated physical stores into franchise stores. In addition, we continue expanding our product offering by cooperating with beauty products and other product suppliers to develop our new private label products. We believe this can help us attract new customers and encourage repeat visits, which will eventually support our revenue growth.

Sissy Wong: In particular, during the next three years, we intend to open 10 additional directly-operated physical stores in Hong Kong and 50 new franchise stores in the US, Canada, Australia, New Zealand, the UK, Singapore, Malaysia, Thailand, and Taiwan. Furthermore, we strive to improve our profitability by saving operating expenditure and transforming some of the directly operated physical stores into franchise stores. In addition, we continue expanding our product offering by cooperating with beauty products and other product suppliers to develop our new private label products.

Sissy Wong: In particular, during the next three years, we intend to open 10 additional directly-operated physical stores in Hong Kong and 50 new franchise stores in the US, Canada, Australia, New Zealand, the UK, Singapore, Malaysia, Thailand and Taiwan.

Sissy Wong: Furthermore, we strive to improve our profitability by saving operating expenditure and transforming some of the directly operated physical stores into franchise stores.

Sissy Wong: In addition, we continue expanding our product offering by cooperating with beauty products and other product suppliers to develop our new private label products.

Sissy Wong: We believe this can help us attract new customers and encourage repeat visits, which will eventually support our revenue growth. Next, I will turn to a closer review of our financials for fiscal year 2024 on behalf of the management team. Our total revenue increased by 50.3% to $195.7 million for fiscal year 2024. Our revenue from directly operated physical stores was upped by double digital growth of 28.8% to $15 million for fiscal year 2024.

Sissy Wong: We believe this can help us attract new customers and encourage repeat visits, which will eventually support our revenue growth.

Mrs. Yuang: Next, I will turn to a closer review of our financials of fiscal year 2024 on behalf of the management team. Our total revenue increased by 50.3% to $195.7 million for fiscal year 2024. Our revenue from directly operated physical store was up by a double digital growth of 28.8% to $15 million for fiscal year 2024. During fiscal year 2024, we started to offer lottery products, which contributed a significant portion of increased directly operated stores sales in fiscal year 2024. The increase in directly operated stores sales was also due to revenue contributed from our newly opened physical stores in the United States and Canada, which was partially offset of the decreased revenue as a result of the transformation of full physical stores in Japan during fiscal year 2024.

Sissy Wong: During fiscal year 2024, we started to offer luxury products, which contributed a significant portion of increased directly-operated stores sold in fiscal year 2024. The increase in directly operated source cells was also due to revenue contributed from our newly opened physical source in the United States and Canada, which was partially offset by decreased revenue as a result of the transformation of full physical sources in Japan during fiscal year 2024. The transformation of the physical source in Japan was because this source was underperforming, and we transformed this source into a franchise source to improve our cash flow and working capital.

Speaker Change: Next, I will turn to a closer review of our financials of fiscal year 2024 on behalf of the management team.

Sissy Wong: After the change, this physical source purchased the products from us, like other franchise stores, and hence this portion of revenue was recorded on their franchise stores and wholesale costs. Revenue from franchise stores and wholesale customers was up by 23.7% to $117 million for fiscal year 2024. The increase was mainly due to the expansion of the product offering as we started to offer luxury products and electronic products that have higher unit selling prices. Meanwhile, the increase was also due to increased revenue generated from franchise sales, which previously was recognized under physical sources, as mentioned above, as well as increased revenue from some new wholesale customers whom we attended and with whom we entered into business relationships during fiscal year 2024. The increase was partially offset by decreased sales of beauty products to wholesale customers as the demand for Japanese beauty products declined in China.

Speaker Change: Our total revenue increased by 50.3% to $195.7 million for fiscal year 2024.

Speaker Change: Our revenue from directly operated physical store was upped by a double digital growth of 28.8% to $15 million for fiscal year 2024.

Speaker Change: During fiscal year 2024, we started to offer luxury products, which contributed a significant portion of increased directly-operated store sales in fiscal year 2024.

Speaker Change: The increase in directly operated store sales was also due to revenue contributed from our newly opened physical stores in the United States and Canada.

Speaker Change: which was partially offset of the decreased revenue as a result of the transformation of full physical stores in Japan during fiscal year 2024.

Mrs. Yuang: The transformation of the physical store in Japan was because this source has been under performance, and we transformed the stores into franchise stores to improve our cash flow and working. After the change, this physical source purchased the product from us like other franchise stores, and hence this portion of revenue was reported on their franchise stores and wholesale customers. Revenue from franchise stores and wholesale customers was applied 23.7% to $117 million for fiscal year 2024. The increase was mainly due to expansion of products offering as we started to offer luxury products and electronic products that have higher unit selling prices.

Speaker Change: The transformation of the physical store in Japan was because this store has been underperforming and we transformed this store into franchise store to improve our cash flow and working capital.

Speaker Change: After the change, this physical source purchased the products from us, like other franchise stores, and hence this portion of revenue was recorded on their franchise stores and wholesale customers.

Speaker Change: Revenue from franchise stores and wholesale customers was up by 23.7% to $117 million for fiscal year 2024.

Speaker Change: The increase was mainly due to expansion of products offering as we started to offer luxury products and electronic products that have higher unit selling price.

Mrs. Yuang: Meanwhile, the increase was also due to increase the revenue generated from franchise stores when previously was recognized on their physical stores, as mentioned above. As well as increase the revenue from some new wholesale customers whom we attended and whom we entered into business relationship during fiscal year 2024. The increase was partially applied by the decrease sales of beauty products to wholesale customers as the demand of Japanese beauty products declined in the China market. Growth profit was 23.4 million dollars for fiscal year 2024. Growth margin was 11.9% for fiscal year 2024. Operating expenses down by 38.4% to 17.6 million dollars for fiscal year 2024.

Speaker Change: Meanwhile, the increase was also due to increase the revenue generated from franchise sales which previously was recognized under physical source as mentioned above.

Speaker Change: As well as increased revenue from some new wholesale customers whom we attended and whom we entered into business relationship during fiscal year 2024.

Speaker Change: The increase was partially offset by the decreased sales of beauty products to wholesale customers as the demand of Japanese beauty products declined in China market.

Sissy Wong: Gross profit was $23.4 million for fiscal year 2024, and gross margin was 11.9%. Operating expenses decreased by 38.4% to $17.6 million for fiscal year 2024. The decrease in operating expenses was primarily attributable to a decrease in allowance for credit loans, shipping expenses, promotion and advertising expenses, payroll for event expenses, and bonus expenses, and Transaction Commission, which was partially offset by an increase in professional service fees. Net income increased to $7.5 million for fiscal year 2024 from a net loss of $8 million for fiscal year 2023. Basic and diluted earnings per share were $0.2 for fiscal year 2024, compared to a loss per share of $0.22 for fiscal year 2023.

Speaker Change: Gross profit was $23.4 million for fiscal year 2024. Gross margin was 11.9% for fiscal year 2024.

Speaker Change: Operating expenses down by 38.4% to $17.6 million for fiscal year 2024. The decrease in operating expenses was primarily attributable to decrease in allowance for credit loss. Shipping expenses...

Mrs. Yuang: The decrease in operating expenses was primarily uptriballed to decrease in allowance for credit lose, shipping expenses, promotion and advertising expenses, payroll, info events, expenses, and bonus expenses. And transaction commission, which was personally applied by an increase in professional service fees. That income increased to $7.5 million for fiscal year 2024 from that loss of $8 million for fiscal year 2023. Basic and diluted earnings per year was $0.2 for fiscal year 2024. Compared to a loss per share of $0.22 for fiscal year 2023. As of March 31, 2024, the company had cash of $2.5 million. As of March 31, 2024, the company had $105.4 million accounts receivable balance due from third parties.

Speaker Change: promotion and advertising expenses, payroll employee benefits expenses and bonus expenses, and transaction commission which was partially offset by an increase in professional service fees.

Speaker Change: Net income increased to $7.5 million for fiscal year 2024 from a net loss of $8 million for fiscal year 2023.

Speaker Change: Basic and diluted earnings per share was $0.2 for FY2024 compared to a loss per share of $0.22 for FY2023.

Sissy Wong: As of March 31, 2024, the company had cash of $2.5 million. Additionally, as of March 31, 2024, the company had $105.4 million accounts receivable balance due from a third party. Approximately 35.4% of the March 21, 2024 balance has subsequently been collected, and the majority of the remaining balance is expected to be collected by December 31, 2024. The collection of such receivables made cash available for use in the operation as working capital. As of March 31, 2024, the company had a merchandise inventory of $4.4 million, which it believes can be sold quickly based on its analysis of the current trend in demand for its product. For fiscal year 2024, net cash provided by operating activities was $1.9 million, and net cash provided by investing activities amounted to $2.7 million. The net cash used in financing activities was $1.7 million.

Speaker Change: As of March 31, 2024, the company had cash of $2.5 million.

Speaker Change: As of March 31, 2024, the company had $105.4 million accounts receivable balance due from third parties.

Mrs. Yuang: Approximately 35.4% of the March 21, 2024, balance has subsequently been collected. And the majority of the remaining balance is expected to be collected by December 31, 2024. The collection of such receivable made cash available for use in operation as working capital. As of March 31, 2024, the company had merchandise in virtually of $4.4 million, which we believe can be sold quickly based on its analysis of current trend in demand for its products. So, fiscal year 2024, net cash provided by operating activities was $1.9 million. Net cash provided by investing activities amounted to $2.7 million. Net cash use in financing activities was $1.7 million.

Speaker Change: Approximately 35.4% of the March 21, 2024 balance has subsequently been collected, and the majority of the remaining balance is expected to be collected by December 31, 2024.

Speaker Change: The collection of such receivables makes cash available for use in operations as working capital if necessary.

Speaker Change: As of March 31, 2024, the company had merchandise

Speaker Change: invertory of 4.4 million dollars which we believe can be sold quickly based on its analysis of current trend in demand for its products.

Speaker Change: For fiscal year 2024, net cash provided by operating activities was $1.9 million.

Speaker Change: Net cash provided by investing activities amounted to $2.7 million. Net cash used in financing activities was $1.7 million.

Mrs. Yuang: We are pleased to see substantial improvements in our financial performance for fiscal year 2024. This positive outcome is a result of our focused efforts on cost management, strategic investments, and revenue growth. We also achieve a notable reduction in interest expenses. Thanks to our strategy that management and favorable loan conditions, and we saw a significant increase in other income, mainly from the disposal of property and equipment.

Sissy Wong: We are pleased to see a substantial improvement in our financial performance for fiscal year 2024. This positive outcome is a result of our focused efforts on cost management, strategic investment, and revenue growth. We also achieved a notable reduction in interest expenses.

Speaker Change: We are pleased to see substantial improvement in our financial performance for fiscal year 2024. This positive outcome is a result of our focused efforts on cost management.

Speaker Change: strategic investment and revenue growth. We also achieved a notable reduction in interest expenses.

Sissy Wong: Thanks to our strategy that management and favorable loan conditions, and we saw a significant increase in other income, mainly from the disposal of property and equipment. Looking forward, we will continue to focus on enhancing our financial performance through discipline, cost management, strategic investment, and exploring new revenue streams. We are confident that these efforts will drive long-term value for our shareholders and stakeholders.

Speaker Change: Thanks to our strategy debt management and favorable loan conditions, and we saw a significant increase in other income, mainly from the disposal of property and equipment.

Mrs. Yuang: Looking forward, we will continue to focus on enhancing our financial performance through disciplined cost management, strategy investment, and exploring new revenue strengths. We are confident that these efforts will drive long-term value for our shareholders and stakeholders.

Speaker Change: Looking forward, we will continue to focus on enhancing our financial performance through discipline cost management.

Speaker Change: Strategy Investment and Exploring New Revenue Streams. We are confident that these efforts will drive long-term value for our shareholders and stakeholders.

Mrs. Yuang: Thank you so much for joining this conference call. If you have any questions, please contact us through email at irsytbek.co.jp. We will reach our IR council attend investor relations at investors at accents-IR.com. Management will respond to your questions as soon as possible. We appreciate your interest and support in UChicu and look forward to stick with you again next time. Thank you for attending UChicu's fiscal year 2024 earnings conference call.

Sissy Wong: Thank you so much for joining this conference call. If you have any questions, please contact us through email at ir at y-i-s-t-b-e-k dot c-o dot j-p. I'll reach our IR Council, Ascent Investor Relations, at investors at ascent-ir dot com. Management will respond to your questions as soon as possible. We appreciate your interest and support in Yushitsu and look forward to speaking with you again next time.

Operator: Thank you for attending Yoshitsu's fiscal year 2024 earnings conference call. This concludes our call today, and we thank you all for listening in. Goodbye.

Speaker Change: Thank you so much for joining this conference call. If you have any questions, please contact us through email at ir at y-i-s-t-b-e-k dot c-o dot j-p. I'll reach our IR Council Ascent Investor Relations at investors at ascent-ir.com

Speaker Change: Management will respond to your questions as soon as possible. We appreciate your interest and support in Yushitsu and look forward to speak with you again next time.

Speaker Change: Thank you for attending Yoshitsu's fiscal year 2024 earnings conference call. This concludes our call today, and we thank you all for listening in. Goodbye.

Operator: This concludes our call today, and we thank you all for listening in. Goodbye. Thank you.