Full Year 2025 Tokyo Lifestyle Co Ltd Earnings Call

Operator: Good day, ladies and gentlemen. Thank you for standing by, and welcome to Tokyo Lifestyle's Fiscal Year 2025 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode.

Good day, ladies and gentlemen.

Thank you for standing by and welcome to Tokyo lifestyle fiscal year, 'twenty 25 earnings Conference call.

During todays presentation, all parties will be in a listen only mode.

Operator: This conference is being recorded today, Thursday, July 10, 2025. If you have any objections, you may disconnect at this time.

This conference is being recorded today Thursday July 2025.

If you have any objections you may disconnect at this time.

Operator: Joining us today from Tokyo Lifestyle is the company's representative, Sissy Wang. Before we continue, I would like to remind you that some information discussed on this call will contain forward-looking statements within the meeting 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. These forward-looking statements invoke known and unknown risks and uncertainties. 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. 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: Joining us today from Tokyo lifestyle is the companies represented 51.

Speaker Change: Before I continue I would like to remind you that some information discussed on this call will contain forward looking statements within the meeting of section 21 E of the Securities Exchange Act of 1934.

Speaker Change: As amended and as defined in the U S. Private Securities Litigation Reform Act of 1995.

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.

Speaker Change: What changes in its expectations.

Speaker Change: 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 and the company cautions investors that actual results may differ materially from the anticipated results encourages investors to review other factors.

Operator: 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 statements and in its other filings with the SEC.

Speaker Change: Its future results and the company's registration statements and there's other filings with the S E C.

Sissy Wang: With that, I would now turn the call over to Ms. Sissy Wang, the company's representative. Please go ahead. Thank you, operator, and everyone for joining Tokyo Lifestyle's Fiscal Year 2025 Earnings Conference call today. On our call today, I will give an overall of our performance for the fiscal year ended March 31, 2025, followed by a detailed financial review of the company's results. In Fiscal Year 2025, we are pleased to report steady progress in our business growth and expansion in key markets like Hong Kong and North America. Our total revenue saw a robust growth of 7.4% for Fiscal Year 2025, mainly driven by the own performance of our directly operated physical stores, franchise stores, and wholesale customers.

Steve: With that I would now turn the call over to Steve All the companies represented please go ahead.

Speaker Change: Thank you operator, and everyone for joining Tokyo lifestyles fiscal year, 'twenty 25 earnings conference call today.

Speaker Change: Our call today, I will get that over all of our performance for the fiscal year ended March 31, 2020 five followed by a detailed financial review of the company's results.

Speaker Change: In fiscal year, 2020 five we are pleased to report steady progress in our business growth and expansion in key markets like Hong Kong and North America.

Speaker Change: Our total revenue saw a robust growth of seven 4% for fiscal year, 2020 five mainly.

Speaker Change: Mainly driven by the strong performance of our directly operated physical stores franchise stores and wholesale customers.

Sissy Wang: During fiscal year 2025, we continue to adjust our business layout to enhance resource allocation, improve operational efficiency, and drive profitability. In response to market trends and increased competition in Japan, we optimized local operation by converting some directly operated physical stores into franchise stores to enhance cash flow and working capital, while also refining our product offering. Consequently, our total stock keeping units increased to 201,300 SKUs during FY 2025. from approximately 151,700 SKUs during Fiscal Year 2024, underscoring a significant growth in our product offering. In addition, revenue from new wholesale customers increased as the company continues to expand its customer base by establishing business relationships with new wholesale customers during fiscal year 2025.

Speaker Change: During fiscal year 2025, we continue to adjust our business to lay out to enhance resource allocation improve operational efficiency and drive profitability.

Speaker Change: Response to market trends and increased competition in Japan, we optimize local operation by converting from directly operated physical stores into our franchise store to enhance cash flow and working capital.

Speaker Change: While also refining our product offerings.

Speaker Change: Consequently, our total stock keeping units increased to 201300 sku's during fiscal year, 2020 five.

Speaker Change: From a proxy mentally 151700 skus during fiscal year 'twenty 'twenty four.

Speaker Change: Underscoring our significant girls in our product offering.

Speaker Change: In addition revenue from your wholesale costumers increase as the company continues to expand its customer base by establishing business relationships with new wholesale customers during fiscal year, 2020 five.

Sissy Wang: Meanwhile, our global market expansion progressed steadily. Notably, we successfully opened five new directly operated stores in the United States, Canada, and Hong Kong, reinforcing our business footprint and enhancing brand recognition in this key market. Overall, our revenue from directly operated physical stores increased by 14.4%. The expansion of our franchise and wholesale business lines also demonstrated steadily growth. We added three franchise stores and 54 new wholesale customers. with revenue increasing by 9.1%, accounting for 88.3% of our total revenue during this period. We also remain steadfast in exploring new opportunities in emerging sectors such as collectible cards and trending toys.

Speaker Change: Meanwhile, our global market expansion progressed steadily.

Speaker Change: Notably we successfully opened five new directly operated stores in the United States, Canada and Hong Kong.

Speaker Change: We are forcing our business footprint and enhance name brand recognition in this K markets.

Speaker Change: Overall, our revenue from directly operated physical stores increased by 14.4 present.

Speaker Change: The expansion of our franchise and wholesale business lines also demonstrated sadly growth.

Speaker Change: We added three franchise stores and 54, new wholesale customers.

Speaker Change: With revenue increasing by nine 1% accounting for 88 points right <unk> of our total revenue during this period.

Speaker Change: We also remain steadfast in exploring new opportunities in emerging factors such has collapsed ball card and the training twice atrium.

Sissy Wang: patron products like Pokemon cards and Bear Bricks. which reflect the latest fashion and consumption trends among younger generations. Our offering in this new category has grown to over 1,300 SKUs. And for the fiscal year 2025, our revenue from collectible cars and training toys totaled $11.4 million, representing 5.4% of our total revenue.

Speaker Change: Atrium products like pokemon cars and their break.

Speaker Change: Which reflects the latest fashion and consumption trends among younger generations.

Speaker Change: Our offering in this new categories have grown to over 1300 S. K U.

Speaker Change: And for the fiscal year, 2020 five our revenue from collectible cars and training twice.

Speaker Change: To $11.4 million, representing 5.4% of our total revenue.

Sissy Wang: During the past year, we were honored to receive a Gold Stephen Award in the Company of the Year Retail Medium Size category at the 21st Annual International Business Awards in September 2024, underscoring market recognition of our long-term efforts and innovation. Looking ahead, we remain committed to driving sustainable growth and exploring new opportunities while strengthening loyalty among our existing customers. In the Asian and ocean markets, we are deepening collaboration with existing franchises and actively seeking new partnerships to drive further development. Recently, we established new subsidiaries in Australia and plan to open new stores in Vietnam and Australia, laying strong foundation for our business expansions in these new territories.

Speaker Change: During the past year, we were honored to receive a gold Stevie Award in a company of the year retail medium sized category at a 21st and your International business Awards in September 'twenty 'twenty four.

Speaker Change: Their scoring market recognition of our long term efforts and innovations.

Speaker Change: Looking ahead, we remain committed to driving sustainable growth and exploring new opportunities, while strengthening loyalty among our existing costumers.

Speaker Change: In Asia and Ocean markets, we are deepening collaboration with existing franchises and actively seeking new partnerships to drive in further development.

Speaker Change: Recently, we established a new sub style race in Australia, and the plan to open new stores in Vietnam and Australia.

Speaker Change: Laying a strong foundation for our business expansions in this new territory.

Sissy Wang: We also plan to enter the Middle East market by preparing a new store in Riyadh, Saudi Arabia. We believe these efforts will strengthen our global strategic layout and establish a more balanced market presence. We remain focused on our 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 brighter future and deliver greater value for our company and shareholders.

Speaker Change: We also plan to enter the Mito as the market by pairing our new star in Riyadh, Saudi Arabia.

Speaker Change: We believe this effort will strengthen our global strategic layout and establish a more balanced market presents.

Speaker Change: We remain focused on our strategic priorities strengthening our current market footprint closely monitoring market trends and customer preferences.

Speaker Change: Improving operational inversion fee and profitability.

Speaker Change: Optimizing our distribution network and commercial outlets and exploring new partnership opportunities.

Speaker Change: We are confident that these efforts will contribute to a brighter future and deliver greater value for our company and shareholders.

Sissy Wang: Now I would like to share our financial results highlights of fiscal year 2025. Our total revenue increased by 7.4% from $195.7 million to $210.1 million for fiscal year 2025. During the period, our directly operated store contributed $17.1 million in revenue, representing a year-over-year growth of 14.4%. Revenue from franchise stores and wholesale customers grew by 9.1% to $185.5 million. This increase was mainly driven by our continued efforts in expanding product offerings. In addition, revenue for new wholesale customers increased as we continued to develop our customer base by establishing business relationships with new wholesale clients during fiscal year 2025.

Speaker Change: Now I'd like to share our financial results highlights of fiscal year, 2020 five.

Speaker Change: Our total revenue increased by seven point fall presents from 190 $527 million to 200 time point $1 million for fiscal year, 2020 five.

Speaker Change: During the period, our directly operated store contributed $17 $1 million in revenue.

Speaker Change: Representing a year over year girls, all 14 point fall presents.

Speaker Change: Revenue from franchise stores, and wholesale costumers girl by 9.1% to 185 plus $5 million.

Speaker Change: This increase was mainly driven by our continued efforts in expanding product offerings.

Speaker Change: In addition revenue from your wholesale costumers increase as we continued to develop our costumer base by establishing business relationships with new wholesale clients during fiscal year, 2020 five.

Sissy Wang: Income from operations was $4.7 million for fiscal year 2025 compared to $5.8 million for fiscal year 2024. Growth profit was $23.9 million for FY 2025, representing an increase of 2.3% from $23.4 million in the period year. Girls' margin remains relatively stable at 11.4%. operating expenses increased by 9.1% to $19.2 million. primarily attribute to increase in payroll, employee benefits, and bonus expenses associated with business expansion, as well as higher lease expenses for directly operated physical stores. Net incomes were $6.6 million compared to $7.5 million for fiscal year 2024, primarily due to loss from foreign currency exchange and a change in fair value of warrants.

Speaker Change: Income from operations was $4.7 million for fiscal year, 'twenty 25, compared to $5.8 million for fiscal year 'twenty 'twenty four.

Speaker Change: Gross profit was $23.9 million for fiscal year, 2020, five representing an increase of 2.3% from $23.4 million in the period year.

Speaker Change: Gross margin remained relatively stable at 11.4 present.

Speaker Change: Operating expenses increased by 9.1% to $19.2 million.

Speaker Change: Primarily a trait attribute to increase in payroll employee benefits and bonus expenses associated with business expansion as well as higher lease expenses four directly operated physical stores.

Speaker Change: Net income was $6.6 million compared to $7.5 million for fiscal year 'twenty 'twenty four.

Speaker Change: Primarily due to lose from foreign currency exchange and the change in fair value of warrants.

Sissy Wang: Basic earnings per share was $0.16 for fiscal year 2025 compared to $0.2 for fiscal year 2024. Diluted earnings per share was $0.19 for fiscal year 2025 compared to $0.2 for fiscal year 2024. As of March 31, 2025, the company had cash of $4.8 million and an account receivable balance of $107.3 million due from third parties. Approximately 31.9% of this balance has been subsequently collected. The collection of such receivable has made cash available for use in our operational as working capital if necessary. As of March 31, 2025, the company's merchandise inventory balance amounted to approximately $4.4 million, which the company believes can be sold quickly based on analysis of the current trends in demand for our products.

Speaker Change: Basic earnings per share was 0.1 $6 for fiscal year, 2020 five.

Speaker Change: Compared to 0.2 dollars full fiscal year 'twenty 'twenty four.

Speaker Change: <unk> earnings per share was 0.1 $9 for fiscal year, 'twenty 25, compared to 0.2 dollars for fiscal year 'twenty 'twenty four.

Speaker Change: As of March 31, 2025, the company had cash of $4.8 million and accountable.

Speaker Change: <unk> receivable balance of $107.3 million Ju from third parties.

Speaker Change: Proximately 31 point and I present, all stays balanced has been subsequently collected.

Speaker Change: Action of such receivable has made the cash available for use in our operational working capital if necessary.

Speaker Change: As of March 31, 2025, the company merchandize inventory balance amounted to approximately $4.4 million, which the company believes can be sold quickly based on the analyzed dance of the current trends in demand for our products.

Sissy Wang: For fiscal year 2025, net cash used in operating activities was $0.6 million, net cash used in investing activities was $1 million, and net cash provided by financing activities was $4 million.

Speaker Change: For fiscal year 2025, net cash using operating activities was zero point $6 million.

Speaker Change: Net cash used in investing activities was $1 million and net cash provided by finite financing activities was $4 million.

Sissy Wang: Looking ahead, we remain committed to enhancing financial performance through robust business strategies, disciplined cost management, and strategic investment. We will remain focused on identifying new revenue streams and are confident that these efforts will drive sustainable long-term value for our shareholders.

Speaker Change: Looking ahead, we remain committed to enhancing financial performance through re Boston business strategies disciplined cost management and strategic investments. We will remain focused on identifying new revenue streams and are confident that this effort will drive sustainable.

Speaker Change: Some value for our shareholders.

Sissy Wang: Thank you so much for joining this conference call.

Speaker Change: Thank you so much for joining today's conference call. If you have any questions. Please contact us through E mail at I R. S Y S. T B K Dot Fe old Dow J P. A rage, our IR counsel ascent investor relations at investors at a sense Dash I R.

Sissy Wang: If you have any questions, please contact us through email at ir at ystbek.co.jp. Or reach our IR Council Ascent Investor Relations at investors at ascent-ir.com.

Speaker Change: Calm.

Sissy Wang: Management will respond to your questions as soon as possible.

Speaker Change: Management will respond to questions as soon as possible.

Sissy Wang: We appreciate your interest and support in Tokyo Lifestyle and look forward to speaking with you again next time. Thank you again for attending Tokyo Lifestyle's Fiscal Year 2025 Earnings Conference Call. This concludes our call today, and we thank you all for listening in. Goodbye.

Speaker Change: We appreciate your interest and support in Tokyo lifestyle and look forward to speaking with you again next time.

Speaker Change: Thank you again for attending Tokyo lifestyles fiscal year 2025 earnings conference call. This.

Speaker Change: This concludes our call today and we thank you all for listening and goodbye.

Speaker Change: Yeah.

Speaker Change: [music].