Interim report
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Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. August 18, 2026 Consolidated Financial Results for the Fiscal Year Ended June 30, 2026 [Japanese GAAP] Company name: Pan Pacific International Holdings Corporation Listing: Tokyo Stock Exchange Securities code: 7532 URL: https://ppih.co.jp/en/ir/ Representative: Hideki Moriya, President and CEO, Representative Director Inquiries: Yuji Ishii, Director, Managing Executive Officer and CAO Telephone: +81-3-6416-0418 Scheduled date of annual general meeting of shareholders: September 29, 2026 Scheduled date to commence dividend payments: September 30, 2026 Scheduled date to file annual securities report: September 25, 2026 Preparation of supplementary material on financial results: Yes Holding of financial results briefing: Yes (for institutional investors, analysts, and financial institutions) (Yen amounts are rounded to the nearest million, unless otherwise noted.) 1. Consolidated financial results for the fiscal year ended June 30, 2026 (July 1, 2025 to June 30, 2026) (1) Consolidated operating results (Percentages indicate year-over-year changes.) Net sales Operating income Ordinary profit Profit attributable to owners of parent Fiscal year ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % June 30, 2026 2,445,260 8.8 174,842 7.7 177,509 12.0 110,088 21.6 June 30, 2025 2,246,758 7.2 162,296 15.8 158,542 6.6 90,512 2.0 Note: Comprehensive income Fiscal year ended June 30, 2026: ¥ 127,340 million [41.0%] Fiscal year ended June 30, 2025: ¥ 90,329 million [(4.2)%] Basic earnings per share Diluted earnings per share Return on equity Ratio of ordinary profit to total assets Ratio of operating income to net sales Fiscal year ended Yen Yen % % % June 30, 2026 36.84 36.71 16.8 11.4 7.2 June 30, 2025 30.32 30.19 15.8 10.5 7.2 Reference: Share of profit (loss) of entities accounted for using equity method For the fiscal year ended June 30, 2026: ¥347 million For the fiscal year ended June 30, 2025: ¥615 million Notes: The Company conducted a 5-for-1 stock split of its common shares, effective October 1, 2025. Assuming that this stock split had been effective at the beginning of the previous fiscal year, basic earnings per share and diluted earnings per share have been calculated accordingly.
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(2) Consolidated financial position (Percentages indicate year-over-year changes.) Total assets Net assets Equity-to-asset ratio Net assets per share As of Millions of yen Millions of yen % Yen June 30, 2026 1,602,386 736,425 44.0 235.79 June 30, 2025 1,511,445 624,045 40.1 202.84 Reference: Equity As of June 30, 2026: ¥ 705,211 million As of June 30, 2025: ¥ 605,754 million Notes: 1. The Company conducted a 5-for-1 stock split of its common shares, effective October 1, 2025. Assuming that this stock split had been effective at the beginning of the previous fiscal year, net assets per share have been calculated accordingly. 2. The provisional accounting treatment for the business combination was finalized during the fiscal year ended June 30, 2026. Accordingly, the figures for the fiscal year ended June 30, 2025 reflect the finalization of the provision accounting treatment. (3) Consolidated cash flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period Fiscal year ended Millions of yen Millions of yen Millions of yen Millions of yen June 30, 2026 160,939 (62,287) (81,812) 218,505 June 30, 2025 131,968 (61,080) (75,914) 175,837 Notes: The provisional accounting treatment for the business combination was finalized during the fiscal year ended June 30, 2026. Accordingly, the figures for the fiscal year ended June 30, 2025 reflect the finalization of the provision accounting treatment. 2. Cash dividends Annual dividends per share Total cash dividends (Total) Payout ratio (Consolidated) Ratio of dividends to net assets (Consolidated) First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Millions of yen % % Fiscal year ended June 30, 2025 – 9.00 – 26.00 35.00 20,903 23.1 3.7 Fiscal year ended June 30, 2026 – 3.00 – 6.50 9.50 28,406 25.8 4.3 Fiscal year ending June 30, 2027 (Forecast) – 3.50 – 6.50 10.00 – Notes: The Company conducted a 5-for-1 stock split of its common shares, effective October 1, 2025. For the fiscal year ended June 30, 2025, the actual dividend amount before the stock split is presented. 3. Consolidated earnings forecasts for the fiscal year ending June 30, 2027 (July 1, 2026 to June 30, 2027) (Percentages indicate year -over-year changes.) Net sales Operating income Ordinary profit Profit attributable to owners of parent Basic earnings per share Six months ending December 31, 2026 Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen 1,337,500 10.5 94,500 0.5 92,100 (4.5) 59,100 (7.3) 19.58 Full year ending June 30, 2027 2,687,000 9.9 179,000 2.4 175,300 (1.2) 110,500 0.4 36.61 Notes: The Company and Olympic Group Corporation resolved on April 6, 2026 to enter into a share exchange agreement and conducted a share exchange with an effective date of July 1, 2026 with the Company as the wholly owning parent company resulting from a share exchange and Olympic Group as the wholly owned subsidiary resulting from a share exchange. Basic earnings per share have been calculated taking into 27,105,063 shares of treasury shares held by the Company delivered through a share exchange.
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Notes (1) Significant changes in the scope of consolidation during the period: None Newly included: None Excluded: None (2) Changes in accounting policies, changes in accounting estimates, and restatement (i) Changes in accounting policies due to revisions to accounting standards and other regulations: None (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (iv) Restatement: None (3) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) As of June 30, 2026 3,177,296,700 shares As of June 30, 2025 3,176,766,700 shares (ii) Number of treasury shares at the end of the period As of June 30, 2026 186,453,825 shares As of June 30, 2025 190,367,105 shares (iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year) Fiscal year ended June 30, 2026 2,988,298,063 shares Fiscal year ended June 30, 2025 2,985,366,170 shares Note: The Company conducted a 5-for-1 stock split of its common shares, effective October 1, 2025. Assuming that this stock split had been effective at the beginning of the previous fiscal year, “total number of issued shares at the end of the period,” “number of treasury shares at the end of the period,” and “average number of shares outstanding during the period” have been calculated accordingly. [Reference] Overview of non-consolidated financial results Non-consolidated financial results for the fiscal year ended June 30, 2026 (July 1, 2025 to June 30, 2026) (1) Non-consolidated operating results (Percentages indicate year-on-year changes.) Net sales Operating income Ordinary profit Profit Fiscal year ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % June 30, 2026 121,403 21.3 51,299 29.7 52,753 46.2 52,834 43.8 June 30, 2025 100,069 27.9 39,567 35.7 36,088 (2.4) 36,745 8.5 Basic earnings per share Diluted earnings per share Fiscal year ended Yen Yen June 30, 2026 17.68 17.62 June 30, 2025 12.31 12.26 Note: The Company conducted a 5-for-1 stock split of its common shares, effective October 1, 2025. Assuming that this stock split had been effective at the beginning of the previous fiscal year, basic earnings per share and diluted earnings per share have been calculated accordingly.
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(2) Non-consolidated financial position Total assets Net assets Equity-to-asset ratio Net assets per share As of Millions of yen Millions of yen % Yen June 30, 2026 708,824 195,330 27.3 64.70 June 30, 2025 697,943 163,209 23.1 53.95 Reference: Equity As of June 30, 2026: ¥193,495 million As of June 30, 2025: ¥161,129 million Note: The Company conducted a 5-for-1 stock split of its common shares, effective October 1, 2025. Assuming that this stock split had been effective at the beginning of the previous fiscal year, net assets per share have been calculated accordingly. Notes: - Financial results reports are exempt from audit conducted by certified public accountants or an audit firm. - Proper use of earnings forecasts, and other special matters Cautionary statement regarding forward-looking information This document contains forward-looking statements, including the Company’s outlook for business results. These statements are based on information currently available to the Company and on certain assumptions that the Company considers reasonable; however, they are not intended to constitute a guarantee of performance. Actual results may differ materially due to various factors. For the assumptions underlying the Company’s forecasts and important notes regarding the use of such projections, please refer to page 7 of the Attachments, “1. Overview of Consolidated Operating Results — (4) Business outlook.” Method of obtaining supplementary materials and contents of the financial results briefing The Company plans to hold a financial results briefing for institutional investors and securities analysts on Tuesday, August 18, 2026. The briefing presentation materials will be made available on the Company’s website.
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1 Table of Contents — Attachments 1. Overview of Consolidated Operating Results ............................................................................................... 2 (1) Consolidated operating results ..................................................................................................................... 2 (2) Consolidated financial position .................................................................................................................... 5 (3) Cash flows .................................................................................................................................................... 6 (4) Business outlook .......................................................................................................................................... 7 2. Basic approach to the selection of accounting standards ............................................................................. 7 3. Consolidated Financial Statements and Material Notes Thereto ................................................................ 8 (1) Consolidated balance sheets ......................................................................................................................... 8 (2) Consolidated statements of income and consolidated statements of comprehensive income .................... 10 Consolidated statements of income ............................................................................................................ 10 Consolidated statements of comprehensive income ....................................................................................11 (3) Consolidated Statement of changes in net assets ....................................................................................... 12 (4) Consolidated statements of cash flows ....................................................................................................... 14 (5) Notes to the consolidated financial statements ........................................................................................... 16 Notes on the going concern assumptions ................................................................................................... 16 Significant matters forming the basis for preparing consolidated financial statements ............................ 16 Notes to consolidated balance sheets ......................................................................................................... 20 Notes to consolidated statements of income ............................................................................................... 22 Notes to consolidated statements of comprehensive income ...................................................................... 25 Notes to consolidated statements of changes in net assets ......................................................................... 26 Notes to consolidated statements of cash flows .......................................................................................... 29 Business combination and related matters ................................................................................................. 31 Per share information ................................................................................................................................ 37 Significant subsequent events ..................................................................................................................... 38
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2 1. Overview of Consolidated Operating Results (1) Consolidated operating results During the fiscal year ended June 30, 2026, Japan’s economy recovered moderately, supported by improvements in the employment and income conditions. However, the outlook remained uncertain due to the deterioration of Japan–China relations, the prolonged situation in Ukraine, and rising geopolitical risks in the Middle East. In the retail sector, Japan’s market expanded due to growing demand from overseas visitors, but the operating environment remained highly challenging, as price competition intensified amid: rising logistics and utility costs driven by higher crude oil prices and yen depreciation; rising personnel expenses reflecting labor shortages and minimum wage increases; and rising consumer value-seeking behavior following repeated price increases for daily necessities. Amid these challenging conditions, the Group formulated a new long-term management plan “Double Impact 2035” in August 2025 to ensure continued growth. Since then, the Group has been advancing various measures to achieve its objectives. In April 2026, the Group opened Robin Hood Jimokuji Store, the first store under its new food-focused retail format “Robin Hood, the Astonishingly Fun Store.” Robin Hood is a new food-focused retail format designed for everyday shopping within local living areas. It combines UNY Co., Ltd.’s strengths in fresh‑food procurement with Don Quijote Co., Ltd.’s expertise in optimizing non-food assortments based on trends and customer needs, together with its “astonishingly affordable” DNA. Robin Hood meets customers’ needs for a more efficient and cost-effective shopping experience amid changing lifestyles, while making shopping easier than at a conventional supermarket and offering the fun shopping experience typical of Don Quijote, creating an entirely new retail format under the concept of “Supermarket? Not quite.” Robin Hood opened 5 stores by the end of the fiscal year under review and aims to expand to 200 to 300 stores by 2035. In April 2026, the Group entered into a share exchange agreement with Olympic Group Corporation (“Olympic Group”), which operates a range of retail business in the Tokyo metropolitan area, including specialty stores, discount stores, and supermarkets. Subsequently, the share exchange became effective on July 1, 2026, resulting in Olympic Group becoming a consolidated subsidiary of the Group. Olympic Group joining the Group is expected to generate a wide range of synergies—including the expansion of store networks and acceleration of new format development and store openings, enhanced competitive edge in non-food and other categories through the combination of both groups’ strengths, and cost reductions through the consolidation of purchasing and other operations. Leveraging these synergies, the Group aims to achieve further growth. With respect to ESG initiatives, the Group is taking measures to address environmental issues and realize a decarbonized society by expanding the use of renewable energy at its stores, introducing energy-efficient equipment, and improving operational efficiency. In addition, the Group positions the expansion of its PB/OEM products and food offerings as one of its growth strategies. As the importance of nature capital in the production and procurement of raw materials has increased, the Group is advancing initiatives to address nature-related issues with reference to the TNFD (Taskforce on Nature-related Financial Disclosures) framework. Furthermore, to reduce plastic consumption, the Group is taking measures to lessen its environmental impact, including reducing the use of materials for in-store services such as shopping bags and cutlery, reviewing product packaging, and utilizing recycled raw materials. To address social issues, the Group is promoting initiatives based on its Supply Chain Code of Conduct to achieve responsible sourcing that respects human rights and the environment, in line with the strategic expansion of its PB/OEM product offerings. In addition, following the signing of the Women’s Empowerment Principles (WEPs), the Group is further strengthening diversity initiatives, including women’s participation and advancement, and fostering a rewarding workplace to establish a diverse and inclusive organization where a wide range of talent can thrive. Furthermore, the Group issued its first digital bond, with the proceeds allocated to initiatives supporting young people and contributing to local communities, thereby promoting its social contribution activities. Through its business activities as a comprehensive retailer, the Group seeks to address environmental and social issues and contribute to the achievement of a sustainable society, while enhancing corporate value over the medium- to long- term.
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3 During the period under review, the Group opened 25 stores under the domestic business, all operated by Don Quijote Co., Ltd. The store openings by region were as follows: - Kanto region: Don Quijote Oizumi (Tokyo); Don Quijote Togoshi Ginza Store (Tokyo); Don Quijote Asakusa EKIMISE Store (Tokyo); Kira Kira Donki Mits Kokubunji Store (Tokyo); Kirakira Donki Ebina Vinawalk (Kanagawa); Don Quijote Kohoku Northport Store (Kanagawa); Don Quijote (Kirakira Donki) Chiba Fujimi (Chiba); Don Quijote Ichikawa Eki Kitaguchi Store (Chiba); Don Quijote Hamano Store (Chiba); and Re:Price Kumagaya NITTOH MALL (Saitama) - Hokkaido region: Mega Don Quijote Kitami Store (Hokkaido) - Tohoku region: KiraKira Donki the Mall at Sendai Nagamachi (Miyagi) and MEGA Don Quijote MAX Fukushima Store (Fukushima) - Chubu region: Don Quijote Matsumoto Store (Nagano); Don Quijote Niitsu Store (Niigata); Don Quijote Takayama (Gifu): and Don Quijote Gifu Hashima Store (Gifu) - Kinki region: MEGA Don Quijote Katano Store (Osaka); Don Quijote Shijodori (Kyoto); and Don Quijote Apita Matsusaka Mikumo (Mie) - Chugoku region: Don Quijote Hatchobori Nishi (Hiroshima) and Don Quijote Hofu Store (Yamaguchi) - Shikoku region: Don Quijote Yashima (Kagawa) - Kushu region: Don Quijote Tenjin Nishidori Store (Fukuoka) and Omiyage Donki 730 COURT Store (Okinawa) In the overseas business, the Group opened 4 stores in California, U.S.—Tokyo Central Irvine, Tokyo Central Emeryville, Gelson’s Toluca Lake, and Sushi Restaurant El Dorado Hills—along with one store in Thailand, DON DON DONKI Central Westgate. Meanwhile, the Group closed 4 stores in the domestic business, 1 store in the North America business, and five stores in the Asia business. As a result, the Group operated a total of 799 stores worldwide as of June 30, 2026, comprising 676 domestic stores and 123 overseas stores, compared with 779 stores as of June 30, 2025. As a result of the above, the Group achieved higher net sales and profits, with consolidated results for the fiscal year under review as follows. Net sales ¥2,445.260 billion (up 8.8% year‑over‑year) Operating income ¥174.842 billion (up 7.7% year‑over‑year) Ordinary profit ¥177.509 billion (up 12.0% year‑over‑year) Profit attributable to owners of parent ¥110.088 billion (up 21.6% year‑over‑year) (i) Consolidated financial results (Unit: Millions of yen; amounts are rounded to the nearest million yen.) Fiscal year ended June 30, 2025 Fiscal year ended June 30, 2026 Change Change (%) Net sales 2,246,758 2,445,260 198,502 8.8 Operating income 162,296 174,842 12,546 7.7 Ordinary profit 158,542 177,509 18,967 12.0 Profit attributable to owners of parent 90,512 110,088 19,576 21.6 (ii) Net sales by business Operating results by segment are as follows. Effective from the fiscal year under review, the segment previously titled “Domestic Business (General Merchandise Store)" has been renamed “Domestic Business (UNY business),” and the product categories have been revised accordingly. This change has been applied retroactively, and the figures for the fiscal year ended June 30, 2025 have been restated accordingly.
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4 (Unit: Millions of yen; amounts are rounded to the nearest million yen.) Fiscal year ended June 30, 2025 Fiscal year ended June 30, 2026 Change Change (%) Domestic Business 1,896,113 2,068,195 172,082 9.1 Discount store Home electrical appliances 92,391 93,241 850 0.9 Miscellaneous household goods 393,490 428,832 35,342 9.0 Foods 613,713 654,814 41,101 6.7 Watches and fashion merchandise 182,209 200,876 18,667 10.2 Sporting goods and leisure goods 92,288 105,243 12,955 14.0 Others 21,998 22,322 324 1.5 UNY business Home electrical appliances 6,153 7,544 1,391 22.6 Miscellaneous household goods 44,192 45,439 1,247 2.8 Foods 313,871 336,289 22,418 7.1 Watches and fashion merchandise 52,146 50,719 (1,427) (2.7) Sporting goods and leisure goods 8,806 9,583 777 8.8 Others 986 202 (784) (79.5) Others Other revenue 73,869 113,092 39,223 53.1 North America Business 259,437 277,936 18,499 7.1 Asia Business 91,209 99,129 7,920 8.7 Total 2,246,758 2,445,260 198,502 8.8 Performance by reportable segment is as follows. Domestic Business Net sales increased by ¥172.082 billion, or 9.1% year over year, to ¥2,068.195 billion, and operating income was ¥165.829 billion, up 4.9% year‑over‑year in the Domestic Business segment. Amid growing consumer value- seeking behavior and selective spending, the Group bolstered pricing strategies and sales promotion initiatives in response to changes in consumer behavior, resulting in higher customer traffic at existing stores. Moreover, amid increasingly selective consumer spending, sales of the Group’s customer-favored IP content products and trend products, which are key strengths of the Group, remained strong and contributed to net sales growth. Tax‑free sales reached a record high as the Group’s inbound strategies—not reliant on any single country—drove an increase in customers from Southeast Asia, North America, and Europe. The openings of 25 new stores also contributed to net sales growth. For the new retail format Robin Hood, the first store opened in April 2026, and a total of 5 stores had been opened by June 2026 as planned. This format has attracted significant attention, including extensive media coverage, and initial net sales have been trending above plan. Operating income increased as improved labor productivity helped curb the rise in selling, general, and administrative (SG&A) expenses, despite higher SG&A expenses associated with new store openings and conversion to the new retail format, both of which are undertaken as strategic investments, higher personnel expenses resulting from ongoing remuneration revisions and minimum wage increases, and an increase in the number of subsidiaries subject to factor‑based tax.
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5 North America Business Net sales increased by ¥18.499 billion, or 7.1% year over year, to ¥277.936 billion, and operating income was ¥3.497 billion, up 53.2% year‑over‑year in the North America Business segment. Net sales and SG&A expenses increased due to new store openings in California, the consolidation of Mikuni Restaurant Group, Inc. as a subsidiary, and foreign exchange impacts. These increases were partly offset by decreases resulting from store losses caused by wildfires and the closure of an unprofitable store. Operating income increased supported by an improvement in gross margin and higher productivity in Guam, and a rebound following inventory disposals resulting from a system failure in Hawaii in the previous fiscal year, partly offset by higher costs associated with strategic new store openings and higher personnel expenses. Asia Business Net sales increased by ¥7.920 billion, or 8.7% year over year, to ¥99.129 billion, and operating income was ¥5.517 billion, up 186.0% year over year in the Asia Business segment. Net sales increased as customer traffic grew, driven by enhanced price competitiveness resulting from a review of merchandise mix in each area—such as the introduction of new products, expanded product offerings, and strengthened merchandise procurement leveraging local distribution channels. In addition, operating income increased significantly, driven by improved SG&A efficiency through the closure of unprofitable stores, a lower disposal ratio resulting from sophisticated inventory management, progress in personnel development centered on local talents, and improved labor productivity. (2) Consolidated financial position In the previous fiscal year, the Group applied provisional accounting treatment to the business combination with Mikuni Restaurant Group, Inc. executed on April 1, 2025, and finalized this treatment during the fiscal year under review. Following this finalization, the Group conducted a comparative analysis for the previous fiscal year using figures reflecting the retrospective application. (Unit: Millions of yen; amounts are rounded to the nearest million yen.) As of June 30, 2025 As of June 30, 2026 Change Total assets 1,511,445 1,602,386 90,941 Total liabilities 887,401 865,961 (21,440) Total net assets 624,045 736,425 112,380 Cash flows from operating activities 131,968 160,939 28,971 Cash flows from investing activities (61,080) (62,287) (1,207) Cash flows from financing activities (75,914) (81,812) (5,898) Cash and cash equivalents at end of period 175,837 218,505 42,668 Assets, liabilities, and net assets At the end of the fiscal year ended June 30, 2026, total assets increased by ¥90.941 billion from the end of the previous fiscal year to ¥1,602.386 billion. This increase was mainly due to increases in cash and deposits of ¥41.335 billion, merchandise and finished goods of ¥24.112 billion, property, plant and equipment of ¥14.155 billion, and intangible assets of ¥9.232 billion, partly offset by a decrease in investment securities of ¥10.036 billion. Total liabilities decreased by ¥21.440 billion from the end of the previous fiscal year to ¥865.961 billion. This decrease was mainly due to increases in notes and accounts payable – trade of ¥18.697 billion and bonds payable of ¥9.402 billion, partly offset by a decrease in borrowings of ¥56.561 billion. Total net assets increased by ¥112.380 billion from the end of the previous fiscal year to ¥736.425 billion. This increase was mainly due to an increase in retained earnings of ¥85.543 billion—mainly reflecting the dividends paid and recording of profit attributable to owners of parent—an increase in foreign currency translation adjustment under accumulated other comprehensive income of ¥12.777 billion, and an increase in non‑controlling interests of ¥13.170 billion.
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6 (3) Cash flows At the end of the fiscal year ended June 30, 2026, cash and cash equivalents increased by ¥42.668 billion from the end of the previous fiscal year to ¥218.505 billion. The cash flows from each activity and their underlying factors were as follows. Cash flows from operating activities Net cash provided by operating activities was ¥160.939 billion, up ¥28.971 billion year over year. This increase was mainly due to profit before income taxes of ¥163.578 billion, depreciation of ¥53.599 billion, an increase in trade payables of ¥13.935 billion, and impairment losses of ¥11.492 billion, partly offset by an increase in inventories of ¥20.915 billion and income taxes paid of ¥50.443 billion. Cash flows from investing activities Net cash used in investing activities was ¥62.287 billion, up ¥1.207 billion year over year. This increase was mainly due to purchase of property, plant and equipment of ¥47.820 billion and the purchase of intangible assets of ¥16.028 billion. Cash flows from financing activities Net cash used in financing activities was ¥81.812 billion, up ¥5.898 billion year over year. This increase was mainly due to cash outflows resulting from repayments of long‑term borrowings of ¥56.796 billion, dividends paid of ¥24.495 billion and redemption of bonds payables of 20.650 billion, partly offset by a cash inflow resulting from proceeds from issuance of bonds of ¥29.924 billion. Trends in the Group’s cash flow indicators are as follows. Fiscal year ended June 30, 2022 Fiscal year ended June 30, 2023 Fiscal year ended June 30, 2024 Fiscal year ended June 30, 2025 Fiscal year ended June 30, 2026 Equity-to-asset ratio (%) 28.3 30.6 35.8 40.1 44.0 Equity-to-asset ratio based on market value (%) 93.3 103.6 150.0 196.0 153.6 Interest-bearing debt to cash flow ratio (years) 6.2 4.2 3.1 3.1 2.2 Interest coverage ratio (times) 12.2 17.8 20.6 19.9 24.2 Equity-asset ratio (%): Equity / total assets Equity-to-asset ratio based on market value (%): Market capitalization / total assets Interest-bearing debt to cash flow ratio (years): Interest-bearing debt / cash flows from operating activities Interest coverage ratio (times): Cash flows from operating activities / interest paid Notes: 1. All indicators are calculated based on consolidated financial data. 2. Market capitalization is calculated by multiplying closing share price at the end of the period by the total number of issued shares at the end of the period (excluding treasury shares). Cash flows from operating activities are those reported as cash flows from operating activities in the consolidated statements of cash flows. Interest-bearing debt comprises liabilities reported in the consolidated balance sheet on which interest is paid, excluding lease liabilities. In addition, interest paid is based on the amount of interest paid reported in the consolidated statements of cash flows. 3. During the fiscal year under review, the Company finalized the provisional accounting treatment for a business combination. Accordingly, the trends in the relevant cash flow indicators for the fiscal year ended June 30, 2025 are based on the amounts after reflecting a material revision to the initial allocation of the acquisition cost resulting from the finalization of the provisional accounting treatment.
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7 (4) Business outlook A highly challenging business environment is expected to continue due to increasing tensions in the international situations, soaring energy prices, and rising prices caused by the depreciation of yen. Amid this challenging environment, the Group formulated a new long-term business plan “Double Impact 2035” in August 2025 to achieve further growth. This plan targets net sales of ¥4,200 billion and operating income of ¥330 billion for the fiscal year ending June 30, 2035. To achieve these targets, the Group will pursue various initiatives based on its growth strategies. For the fiscal year ending June 30, 2027, the Group will strive to accelerate domestic store openings while revitalizing Olympic Group stores. In addition, the Group will pursue advancing information dissemination tailored to the needs of individual majica members, strengthening sales promotions through social networking services for foreign travelers, and strengthening supply chain management initiatives. The Group will continue to offer the joy of shopping while supporting the daily lives of local customers, thereby aiming for sustainable growth and the enhancement of corporate value. Growth policies of Group’s long-term plan (i) Store opening strategies The Group has opened stores in all prefectures across Japan and continues to see a significant room for further expansion. By leveraging its unique range of opening patterns, the Group is increasing market share while steadily filling untapped areas and accelerating new store openings in Japan. (ii) Existing store strategies In addition to overall retail market expansion and the rising share of discount store formats, the Group strengthens initiatives to encourage store visits among hesitant shoppers, promote purchases of products not typically purchased by existing customers, and increase their visit frequency, aiming to achieve phenomenal growth in net sales. (iii) Tax-free sales strategies To solidify the brand position that “people visit Japan because Don Quijote is there,” the Group will deepen its unique entertainment offerings that enable customers to experience Japanese culture beyond shopping and create a distinctive world unlike any other companies, thereby establishing tourist-oriented retail. (iv) Development of new formats By expanding into the limited catchment area for grocery needs, the Group aims to develop a new food-focused Don Quijote format that leverages various resources within the PPIH Group, combining Don Quijote’s merchandising expertise and UNY’s fresh procurement capabilities with discount pricing. Through this initiative, the Group seeks to establish a one-of-a-kind business model that delivers both strong customer traffic and high profitability. (v) M&A strategies In anticipation of further industry restructuring and market concentration in the retail industry, the Group positions M&A as one of its strategies going forward. Based on the management strategies outlined above, the Group forecasts the following financial results for the fiscal year ending June 30, 2027. Net sales ¥2,687.0 billion (up 9.9% year‑over‑year) Operating income ¥179.0 billion (up 2.4% year‑over‑year) Ordinary profit ¥175.3 billion (down 1.2% year‑over‑year) Profit attributable to owners of parent ¥110.5 billion (up 0.4% year‑over‑year) 2. Basic approach to the selection of accounting standards The Group has adopted Japanese generally accepted accounting principles (Japanese GAAP) to ensure comparability with other Japanese companies in the same industry. The Group will continue to consider the adoption of International Financial Reporting Standards (IFRS), taking into account trends in IFRS adoption among other Japanese companies in the same industry.
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8 3. Consolidated Financial Statements and Material Notes Thereto (1) Consolidated balance sheets (Millions of yen) As of June 30, 2025 As of June 30, 2026 Assets Current assets Cash and deposits *2 171,958 *2 213,293 Notes and accounts receivable - trade 18,956 24,246 Accounts receivable - installment 57,749 56,934 Operating loans 9,456 9,147 Merchandise and finished goods *2 224,902 *2 249,014 Prepaid expenses 9,476 10,661 Deposits paid 5,764 7,641 Other 35,367 43,458 Allowance for doubtful accounts (5,637) (4,902) Total current assets 527,990 609,491 Non-current assets Property, plant and equipment Buildings and structures : *2 559,008 *2 590,256 Accumulated depreciation (220,052) (245,312) Accumulated impairment (43,243) (50,808) Buildings and structures, net 295,714 294,136 Tools, furniture and fixtures 144,664 162,980 Accumulated depreciation (97,879) (110,418) Accumulated impairment (8,889) (11,798) Tools, furniture and fixtures, net 37,895 40,764 Other 3,102 3,401 Accumulated depreciation (1,535) (1,724) Accumulated impairment (2) (4) Other, net 1,565 1,672 Land *2 354,219 *2 364,809 Construction in progress 3,657 *2 4,948 Right-of-use assets 39,800 43,602 Accumulated depreciation (6,582) (8,184) Accumulated impairment (8,236) (9,560) Right-of-use assets, net 24,982 25,859 Total property, plant and equipment 718,033 732,188 Intangible assets Goodwill 63,224 64,700 Other 40,738 48,494 Total intangible assets 103,962 113,194 Investments and other assets Investment securities *1 37,901 *1 27,865 Long-term prepaid expenses 4,460 3,968 Retirement benefit asset 18,355 20,413 Deferred tax assets 28,042 25,227 Leasehold and guarantee deposits 68,226 67,691 Other *2 5,617 *2 3,351 Allowance for doubtful accounts (1,140) (1,001) Total investments and other assets 161,461 147,513 Total non-current assets 983,455 992,895 Total assets 1,511,445 1,602,386
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9 (Millions of yen) As of June 30, 2025 As of June 30, 2026 Liabilities Current liabilities Notes and accounts payable - trade 194,883 213,580 Current portion of long-term borrowings *7 56,375 32,998 Current portion of bonds payable 20,650 64,477 Accounts payable - other 57,757 57,887 Lease liabilities 2,853 3,437 Accrued expenses 29,540 33,334 Deposits received 13,396 11,476 Income taxes payable 29,299 30,798 Provision for point card certificates 1,598 1,571 Contract liabilities 20,055 19,144 Other *2 15,475 *2 15,427 Total current liabilities 441,881 484,130 Non-current liabilities Bonds payable 170,425 136,000 Long-term borrowings 156,929 123,745 Lease liabilities 35,501 37,338 Asset retirement obligations 32,077 33,161 Other *2 50,588 *2 51,586 Total non-current liabilities 445,520 381,831 Total liabilities 887,401 865,961 Net assets Shareholders’ equity Share capital 23,689 23,738 Capital surplus 17,810 14,822 Retained earnings 629,753 715,296 Treasury shares (80,957) (79,293) Total shareholders’ equity 590,294 674,563 Accumulated other comprehensive income Valuation difference on available-for-sale securities 3,161 5,270 Foreign currency translation adjustment 11,656 24,433 Remeasurements of defined benefit plans 643 945 Total accumulated other comprehensive income 15,460 30,648 Share acquisition rights 2,080 1,834 Non-controlling interests 16,210 29,380 Total net assets 624,045 736,425 Total liabilities and net assets 1,511,445 1,602,386
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10 (2) Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income (Millions of yen) Fiscal year ended June 30, 2025 (From July 1, 2024 to June 30, 2025) Fiscal year ended June 30, 2026 (From July 1, 2025 to June 30, 2026) Net sales 2,246,758 2,445,260 Cost of sales *1 1,530,025 *1 1,676,814 Gross profit 716,733 768,446 Selling, general and administrative expenses *2 554,437 *2 593,604 Operating income 162,296 174,842 Non-operating income Interest and dividend income 1,326 2,061 Share of profit of entities accounted for using equity method 615 347 Foreign exchange gains – 4,295 Other 6,307 4,008 Total non-operating income 8,249 10,711 Non-operating expenses Interest expenses on borrowings and bonds 6,403 6,411 Foreign exchange losses 4,619 – Other 981 1,634 Total non-operating expenses 12,002 8,045 Ordinary profit 158,542 177,509 Extraordinary income Gain on sale of non-current assets *3 216 *3 688 Reversal of provision for loss on store closings 798 – Gain on forgiveness of debts – 1,346 Gain on step acquisitions – 362 Gain on reversal of foreign currency translation adjustment – 704 Other 10 685 Total extraordinary income 1,023 3,785 Extraordinary losses Impairment losses *4 18,467 *4 11,492 Loss on retirement of non-current assets *5 1,507 *5 3,483 Loss on store closings *6 1,745 *6 296 Loss on valuation of investment securities 200 691 Loss on disaster 52 387 Other 684 1,366 Total extraordinary losses 22,655 17,716 Profit before income taxes 136,910 163,578 Income taxes - current 48,276 46,687 Income taxes - deferred (2,718) 4,799 Total income taxes 45,558 51,486 Profit 91,352 112,092 Profit attributable to non-controlling interests 840 2,004 Profit attributable to owners of parent 90,512 110,088
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11 Consolidated statements of comprehensive income (Millions of yen) Fiscal year ended June 30, 2025 (From July 1, 2024 to June 30, 2025) Fiscal year ended June 30, 2026 (From July 1, 2025 to June 30, 2026) Profit 91,352 112,092 Other comprehensive income Valuation difference on available-for-sale securities 1,315 2,006 Foreign currency translation adjustment (2,247) 12,915 Remeasurements of defined benefit plans, net of tax (164) 508 Share of other comprehensive income of entities accounted for using equity method 73 (181) Total other comprehensive income * (1,023) * 15,248 Comprehensive income 90,329 127,340 Comprehensive income attributable to Comprehensive income attributable to owners of parent 89,256 125,275 Comprehensive income attributable to non- controlling interests 1,073 2,065
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12 (3) Consolidated Statement of changes in net assets Fiscal year ended June 30, 2025 (from July 1, 2024 to June 30, 2025) (Millions of yen) Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Balance at beginning of period 23,538 17,659 559,538 (80,956) 519,778 Changes during period Issuance of new shares 151 151 302 Dividends of surplus (20,297) (20,297) Profit attributable to owners of parent 90,512 90,512 Purchase of treasury shares (1) (1) Capital increase of consolidated subsidiaries Decrease in consolidated subsidiaries - non- controlling interests Net changes in items other than shareholders’ equity Total changes during period 151 151 70,215 (1) 70,516 Balance at end of period 23,689 17,810 629,753 (80,957) 590,294 Accumulated other comprehensive income Share acquisition rights Non- controlling interests Total net assets Valuation difference on available- for-sale securities Foreign currency translation adjustment Remeasure- ments of defined benefit plans Total accumulated other comprehen- sive income Balance at beginning of period 2,126 13,857 733 16,716 1,442 9,066 547,003 Changes during period Issuance of new shares 302 Dividends of surplus (20,297) Profit attributable to owners of parent 90,512 Purchase of treasury shares (1) Capital increase of consolidated subsidiaries 6,120 6,120 Decrease in consolidated subsidiaries - non- controlling interests (86) (86) Net changes in items other than shareholders’ equity 1,036 (2,201) (90) (1,256) 638 1,111 492 Total changes during period 1,036 (2,201) (90) (1,256) 638 7,144 77,042 Balance at end of period 3,161 11,656 643 15,460 2,080 16,210 624,045
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13 Fiscal year ended June 30, 2026 (from July 1, 2025 to June 30, 2026) (Millions of yen) Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Balance at beginning of period 23,689 17,810 629,753 (80,957) 590,294 Changes during period Issuance of new shares 49 49 99 Dividends of surplus (24,495) (24,495) Profit attributable to owners of parent 110,088 110,088 Purchase of treasury shares (1) (1) Disposal of treasury shares (50) 1,665 1,615 Transfer of loss on disposal of treasury shares 50 (50) – Change in scope of consolidation Purchase of shares of consolidated subsidiaries (3,037) (3,037) Net changes in items other than shareholders' equity Total changes during period 49 (2,988) 85,543 1,664 84,269 Balance at end of period 23,738 14,822 715,296 (79,293) 674,563 Accumulated other comprehensive income Share acquisition rights Non- controlling interests Total net assets Valuation difference on available- for-sale securities Foreign currency translation adjustment Remeasure- ments of defined benefit plans Total accumulated other comprehen- sive income Balance at beginning of period 3,161 11,656 643 15,460 2,080 16,210 624,045 Changes during period Issuance of new shares 99 Dividends of surplus (24,495) Profit attributable to owners of parent 110,088 Purchase of treasury shares (1) Disposal of treasury shares 1,615 Transfer of loss on disposal of treasury shares – Change in scope of consolidation (153) (93) (246) 16,499 16,254 Purchase of shares of consolidated subsidiaries (5,093) (8,130) Net changes in items other than shareholders' equity 2,262 12,776 395 15,433 (246) 1,763 16,951 Total changes during period 2,109 12,776 302 15,187 (246) 13,170 112,380 Balance at end of period 5,270 24,433 945 30,648 1,834 29,380 736,425
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14 (4) Consolidated statements of cash flows (Millions of yen) Fiscal year ended June 30, 2025 Fiscal year ended June 30, 2026 Cash flows from operating activities Profit before income taxes 136,910 163,578 Depreciation 47,889 53,599 Impairment losses 18,467 11,492 Increase (decrease) in allowance for doubtful accounts 2,212 (907) Interest and dividend income (1,326) (2,061) Interest expenses on borrowings and bonds 6,403 6,411 Foreign exchange losses (gains) 4,162 (3,562) Share of loss (profit) of entities accounted for using equity method (615) (347) Loss (gain) on sale and retirement of non- current assets 1,322 2,849 Gain on forgiveness of debts – (1,346) Loss (gain) on step acquisitions – (362) Loss on store closings 1,745 296 Offset payments for house rental fee with lease and guarantee deposits 2,035 1,996 Decrease (increase) in trade receivables (1,958) (765) Decrease (increase) in inventories (26,931) (20,915) Increase (decrease) in trade payables (1,902) 13,935 Decrease (increase) in accounts receivable - installment (650) 589 Increase (decrease) in accounts payable - other (3,909) (3,326) Increase (decrease) in deposits received (602) (503) Decrease (increase) in other current assets (3,031) (6,699) Increase (decrease) in other current liabilities (637) (1,467) Increase (decrease) in other non-current liabilities (1,063) (145) Other, net 2,947 (978) Subtotal 181,467 211,362 Interest and dividends received 1,087 1,845 Interest paid (6,628) (6,664) Income taxes paid (48,129) (50,443) Income taxes refund 3,383 1,612 Proceeds from insurance income 1,043 3,320 Payments associated with disaster loss (434) (133) Dividends received from entities accounted for using equity method 179 39 Net cash provided by (used in) operating activities 131,968 160,939
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15 (Millions of yen) Fiscal year ended June 30, 2025 Fiscal year ended June 30, 2026 Cash flows from investing activities Purchase of property, plant and equipment (38,672) (47,820) Proceeds from sale of property, plant and equipment 3,160 2,464 Purchase of intangible assets (13,461) (16,028) Payments of leasehold and guarantee deposits (1,484) (1,582) Proceeds from refund of leasehold and guarantee deposits 673 1,571 Payment for store opening in progress (512) (414) Purchase of shares of subsidiaries and associates (387) – Purchase of shares of subsidiaries resulting in change in scope of consolidation *2 (10,331) *2 (274) Other, net (67) (204) Net cash provided by (used in) investing activities (61,080) (62,287) Cash flows from financing activities Proceeds from long-term borrowings 40,000 – Repayments of long-term borrowings (99,257) (56,796) Proceeds from issuance of bonds - 29,924 Redemption of bonds (650) (20,650) Dividends paid (20,297) (24,495) Proceeds from share issuance to non- controlling shareholders 6,120 – Purchase of shares of subsidiaries not resulting in change in scope of consolidation – (8,130) Other, net (1,830) (1,665) Net cash provided by (used in) financing activities (75,914) (81,812) Effect of exchange rate change on cash and cash equivalents (6,336) 7,964 Net increase (decrease) in cash and cash equivalents (11,362) 24,804 Cash and cash equivalents at beginning of period 187,199 175,837 Increase (decrease) in cash and cash equivalents resulting from change in scope of consolidation – *3 17,864 Cash and cash equivalents at end of period *1 175,837 *1 218,505
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16 (5) Notes to the consolidated financial statements Notes on the going concern assumptions Not applicable. Significant matters forming the basis for preparing consolidated financial statements 1. Scope of consolidation (1) Number of consolidated subsidiaries: 70 companies Names of consolidated subsidiaries Don Quijote Co., Ltd. UNY Co., Ltd. Nagasakiya Co., Ltd. UD Retail Co., Ltd. Japan Asset Marketing Co., Ltd. Pan Pacific International Financial Service Corporation UCS Co., Ltd. Japan Commercial Establishment Co., Ltd. Kanemi Co, Ltd. Pan Pacific Retail Management (Singapore) Pte. Ltd. Pan Pacific Retail Management (Hong Kong) Co., Ltd. Don Quijote (USA) Co., Ltd. Gelson's Markets MARUKAI CORPORATION QSI, Inc. Other consolidated subsidiaries: 55 companies During the fiscal year under review, Kanemi Co., Ltd., which had been an equity‑method associate of the Company, repurchased a portion of its issued shares as treasury shares resulting in the Company holding 40.3% of its voting rights. Accordingly, Kanemi Co., Ltd. was newly included in the scope of consolidation under the substantive control standard. In addition, 3 companies were excluded from the scope of consolidation due to their dissolution through absorption-type mergers, and 1 company was excluded following the completion of its liquidation. (2) Names of major non-consolidated subsidiaries and other matters All 8 non-consolidated subsidiaries are excluded from the scope of consolidation because each of them is small in size, and their total assets, net sales, profit or loss (attributable to the Group’s equity interest), and retained earnings (attributable to the Group’s equity interest) do not have a material impact on the consolidated financial statements. 2. Application of equity method (1) Number of associates accounted for using the equity method: 1 company Name of associates accounted for using the equity method Accretive Co., Ltd. (2) Non-consolidated subsidiaries and associates not accounted for using the equity method 8 non-consolidated subsidiaries and 5 associates are excluded from the scope of the equity method because the impact of such exclusion on the consolidated financial statements is immaterial, both individually and in aggregate, in terms of profit or loss (attributable to the Group’s equity interest), retained earnings (attributable to the Group’s equity interest), and other items. 3. Fiscal year of the consolidated subsidiaries and other matters The closing dates of Don Quijote (USA) Co., Ltd. and 25 other consolidated subsidiaries differ from the closing date of the consolidated financial statements. As the differences do not exceed three months, the financial statements of those subsidiaries are used in preparing the consolidated financial statements. However, necessary adjustments are made in the consolidation process for significant transactions occurring between the closing dates of those subsidiaries and the closing date of the consolidated financial statements.
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17 Kanemi Co., Ltd. and 7 other consolidated subsidiaries have closing dates that differ from the closing date of the consolidated financial statements, and the differences exceed three months. Accordingly, the Group uses financial statements prepared on the basis of a provisional settlement of accounts conducted in a manner similar to a regular settlement of accounts. The closing dates of Japan Asset Marketing Co., Ltd. and 13 other consolidated subsidiaries differ from the closing date of the consolidated financial statements. However, to obtain more timely management information, the Group uses financial statements prepared on the basis of a provisional settlement of accounts conducted as of the closing date of the consolidated financial statements. 4. Accounting policies (1) Valuation standards and methods for significant assets (i) Securities Shares of subsidiaries and associates Cost method based on the moving-average method. Available-for-sale securities Securities other than shares, etc. with no market prices Fair value method (Unrealized gains and losses are recognized directly in net assets, and the cost of securities sold is determined using the moving-average method.) Shares, etc. with no market prices Cost method based on the moving average method. (ii) Derivatives Fair value method. (iii) Inventories Mainly stated at cost based on the moving-average method. (The carrying amounts in the balance sheet are calculated by the write-down method based on a decline in profitability.) However, fresh food products are mainly stated at cost based on the last purchase cost method. (2) Depreciation and amortization methods for significant depreciable and amortizable assets (i) Property, plant and equipment (excluding leased assets and right-of-use assets) Declining-balance method is principally applied. However, the Company and its domestic consolidated subsidiaries apply the straight-line method to buildings (excluding facilities attached to buildings) acquired on and after April 1, 1998, and to facilities attached to buildings and structures acquired on and after April 1, 2016. In addition, UNY Co., Ltd. and 4 other consolidated subsidiaries, and foreign consolidated subsidiaries apply the straight-line method. Useful lives and residual values are determined in accordance with the provisions of the Corporation Tax Act. (ii) Intangible assets (excluding leased assets) Straight-line method is applied. Software for internal use is amortized by the straight-line method over a period of 5 years, which is the period available for internal use. (iii) Leased assets and right-of-use assets Straight-line method is applied using the lease period as the useful life and a residual value of zero. (iv) Long-term prepaid expenses Straight-line method is applied. (3) Accounting treatment of deferred assets (i) Share issuance costs Fully expensed when incurred. (ii) Bond issuance costs Fully expensed when incurred.
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18 (4) Recognition standards for significant allowances (i) Allowance for doubtful accounts To provide for losses on doubtful receivables, including trade receivables and loans receivables, the allowance for doubtful accounts is recorded for general receivables based on a prescribed standard that takes into account historical loss rates and other relevant factors. For specific receivables, including doubtful receivables, the estimated uncollectable amount is recorded based on an individual assessment of collectability. At foreign consolidated subsidiaries, the estimated uncollectible amount is recorded primarily for specific receivables. (ii) Provision for point card certificates To provide for future costs associated with the use of points granted to credit card members and others, provision for point card certificates is recorded for the estimated amount of points expected to be used based on historical use rates and other factors. (5) Accounting treatment of retirement benefits (i) Method of attributing projected retirement benefit obligations to periods In calculating retirement benefit obligations, the projected retirement benefit obligations are attributed to the periods through the end of the fiscal year under review using the benefit formula basis. (ii) Method of amortizing actuarial differences and prior service costs Prior service costs are recognized as expenses on a straight-line basis over a fixed period of years, primarily 10 years, within the average remaining service period of employees at the time such costs are incurred. Actuarial differences are amortized on a straight-line basis over a fixed period of years, primarily 10 years, within the average remaining service period of employees at the time of occurrence in each fiscal year, and are recognized as expenses from the fiscal year following the year in which they arise. As pension assets exceeded retirement benefit obligations as of the end of the fiscal year under review, the excess amount is presented as a retirement benefit asset under investments and other assets. (6) Recognition standards for significant revenue and expenses The following are the principal performance obligations arising from contracts with customers in the major businesses of the Company and its consolidated subsidiaries and the timing at which such performance obligations are generally satisfied (the timing of revenue recognition). (i) Sale of merchandise Revenue from the sale of merchandise in the Domestic Business, North America Business and Asia Business is recognized when control of the merchandise is transferred to customers through delivery of the merchandise. In addition, for transactions involving the sale of merchandise in which the Company and its consolidated subsidiaries are determined to be acting as an agent, revenue is recognized on a net basis, representing the amount received in exchange for goods provided by another party less the amount paid to such other party. (ii) Tenant leasing The Company and its consolidated subsidiaries lease portions of commercial complexes and stores in the Domestic Business, North America Business and Asia Business. Revenue from such leasing transactions is recognized in accordance with Accounting Statement No. 13, Accounting Standard for Lease Transactions, and related guidance. (iii) Financial revenue Financial revenue in the Domestic Business consists of credit commission fees and other revenue derived from financial services and is recognized in accordance with Accounting Statement No. 10, Accounting Standard for Financial Instruments, and related guidance.
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19 (7) Foreign currency translation standards for significant assets and liabilities into Japanese yen Foreign currency-denominated monetary receivables and payables are translated into Japanese yen at the spot exchange rates prevailing at the end of the fiscal year under review, and translation differences are recognized in profit or loss. The assets and liabilities of foreign consolidated subsidiaries are translated into Japanese yen at the spot exchange rates prevailing at the end of the respective fiscal years under review of such subsidiaries, while revenues and expenses are translated at the average exchange rates for the period. Translation adjustments are included in foreign currency translation adjustments under net assets. (8) Amortization methods and periods for goodwill Goodwill is amortized on a straight-line basis over the period during which its effect is expected to be realized, as reasonably estimated. (9) Scope of funds in the consolidated statements of cash flows Funds consist of cash on hand, demand deposits, and short-term investments with original maturities of three months or less that are readily convertible into cash and subject to an insignificant risk of changes in value.
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20 Notes to consolidated balance sheets 1. The item relating to non-consolidated subsidiaries and associates is as follows. (Millions of yen) As of June 30, 2025 As of June 30, 2026 Investment securities (shares) ¥18,245 ¥5,520 2. Assets pledged as collateral and secured liabilities Assets pledged as collateral are as follows. (Millions of yen) As of June 30, 2025 As of June 30, 2026 Cash and deposits ¥2,651 ¥3,219 Merchandise and finished goods 526 491 Buildings and structures 742 195 Land 2,190 1,190 Construction in progress – 204 Other 342 385 Total ¥6,451 ¥5,684 Secured liabilities are as follows. (Millions of yen) As of June 30, 2025 As of June 30, 2026 Current liabilities (other) ¥67 ¥91 Non-current liabilities (other) 797 797 Total ¥864 ¥888 3. Recourse obligations arising from securitization of receivables (Millions of yen) As of June 30, 2025 As of June 30, 2026 Recourse obligations arising from securitization of receivables ¥5,775 ¥5,820 4. The Company and its consolidated subsidiaries have overdraft agreements with 39 banks to efficiently procure working capital. The unused borrowing capacity under these agreements is as follows. (Millions of yen) As of June 30, 2025 As of June 30, 2026 Total overdraft facilities ¥36,910 ¥37,810 Outstanding borrowings – – Unused borrowing capacity ¥36,910 ¥37,810 5. The Company has entered into loan commitment agreements with three banks to efficiently procure working capital. The unused borrowing capacity under these agreements is as follows. (Millions of yen) As of June 30, 2025 As of June 30, 2026 Total loan commitment facilities ¥30,000 ¥30,000 Outstanding borrowings – – Unused borrowing capacity ¥30,000 ¥30,000
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21 6. UCS Co., Ltd., a consolidated subsidiary of the Company, engages in cash advance service s and other businesses incidental to its credit card business. The unused balance of loan commitments related to such services is as follows. (Millions of yen) As of June 30, 2025 As of June 30, 2026 Total loan commitment facilities ¥511,430 ¥479,446 Outstanding loans 9,219 8,857 Unused balance ¥502,211 ¥470,589 As most of these loan commitments are granted to members of UCS Co., Ltd. as part of the cash advance services associated with its credit card business, the entire unused amount of such loan commitments is not necessarily expected to be drawn down. 7. The Company had syndicated loan agreements with 16 financial institutions totaling ¥20,000 million in the fiscal year ended June 30, 2025. These agreements contain financial covenants based on certain financial indicators calculated from the amount of net assets reported in the consolidated balance sheet. The outstanding borrowings under these agreements are as follows. (Millions of yen) As of June 30, 2025 As of June 30, 2026 Outstanding borrowing under syndicated loan agreements ¥20,000 –
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22 Notes to consolidated statements of income 1. The balance of inventories at the fiscal year-end represents the amount after write-downs of book value due to a decline in profitability. The following inventory valuation losses are included in cost of sales. (Millions of yen) Fiscal year ended June 30, 2025 Fiscal year ended June 30, 2026 ¥1,776 ¥2,870 2. Major items and amounts of selling, general and administrative expenses are as follows. (Millions of yen) Fiscal year ended June 30, 2025 Fiscal year ended June 30, 2026 Payroll and allowances ¥202,974 ¥218,437 Rent expenses on land and buildings 63,212 66,250 Commission expenses 71,553 80,541 Depreciation 39,591 43,734 Provision for point card certificates 5,899 5,614 Amortization of goodwill 4,991 6,201 Retirement benefit expenses ¥1,650 ¥1,838 3. The components of gain on sale of non-current assets are as follows. (Millions of yen) Fiscal year ended June 30, 2025 Fiscal year ended June 30, 2026 Buildings and structures ¥179 ¥190 Tools, furniture and fixtures 3 22 Land 21 465 Other 13 10 Total ¥216 ¥688 4. Impairment losses The Group recognized impairment losses on the following asset groups. For the fiscal year ended June 30, 2025 (From July 1, 2024 to June 30, 2025) (Millions of yen) Region Usage Asset type Impairment losses Hokkaido Store facilities Buildings and structures; tools, furniture, and fixtures ¥546 Kanto Store facilities Buildings and structures; tools, furniture, and fixtures; land; and intangible assets (other); long-term prepaid expenses 1,063 Chubu Store facilities Buildings and structures; tools, furniture, and fixtures 138 Kinki Store facilities Buildings and structures; tools, furniture, and fixtures 736 Asia Store facilities Buildings and structures; tools, furniture, and fixtures; intangible assets (other) 1,029 North America Store facilities Buildings and structures; tools, furniture, and fixtures; property, plant and equipment (other); land; right-of-use assets; intangible assets(other) 14,955 Total ¥18,467
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23 The Group identifies asset groups principally by individual store or business division. For rental properties and idle assets, each property is regarded as the smallest cash-generating unit. During the fiscal year ended June 30, 2025, for stores whose profitability had declined or whose operating activities had continuously generated losses, the Group reduced the book value of the relevant assets to their recoverable amounts and recognized the resulting reductions as impairment losses. Impairment losses of ¥13,060 million for buildings and structures, ¥2,383 million for tools, furniture and fixtures, ¥2 million for property, plant and equipment (other), ¥109 million for land, ¥1,946 million for right-of-use assets, ¥962 million for intangible assets (other), and ¥6 million for long-term prepaid expenses were recorded as extraordinary losses. The recoverable amounts of these asset groups were determined as the higher of their net selling value or value in use. Net selling value was determined based on the appraisal values estimated by real estate appraisers and other related information. As for the value in use, asset groups whose value in use based on future cash flows was negative were measured at zero as their recoverable amount, while for other asset groups, value in use was calculated by discounting future cash flows at a rate of 5.1%. For the fiscal year ended June 30, 2025 (From July 1, 2025 to June 30, 2026) (Millions of yen) Region Usage Asset type Impairment losses Hokkaido Store facilities Buildings and structures; tools, furniture, and fixtures ¥491 Tohoku Store facilities Buildings and structures; tools, furniture, and fixtures 385 Kanto Store facilities Buildings and structures; tools, furniture, and fixtures 1,460 Chubu Store facilities Buildings and structures; tools, furniture, and fixtures 1,299 Kinki Store facilities Buildings and structures; tools, furniture, and fixtures 538 Chugoku Store facilities Buildings and structures; tools, furniture, and fixtures 74 Shikoku Store facilities Buildings and structures; tools, furniture, and fixtures 23 Kyushu Store facilities Buildings and structures; tools, furniture, and fixtures 291 Asia Store facilities Buildings and structures; tools, furniture, and fixtures 27 North America Store facilities Buildings and structures; tools, furniture, and fixtures; property, plant and equipment (other); construction in progress, right-of-use assets 6,905 Total ¥11,492 The Group identifies asset groups principally by individual store or business division. For rental properties and idle assets, each property is regarded as the smallest cash-generating unit. During the fiscal year ended June 30, 2026, for stores whose profitability had declined or whose operating activities had continuously generated losses, the Group reduced the book value of the relevant assets to their recoverable amounts and recognized the resulting reductions as impairment losses. Impairment losses of ¥6,981 million for buildings and structures, ¥2,707 million for tools, furniture and fixtures, ¥1 million for property, plant and equipment (other), ¥169 million for construction in progress, and ¥1,633 million for right-of-use assets were recorded as extraordinary losses. The recoverable amounts of these asset groups were determined as the higher of their net selling value or value in use. Net selling value was determined based on the appraisal values estimated by real estate appraisers and other related information. As for the value in use, asset groups whose value in use based on future cash flows was negative were measured at zero as their recoverable amount, while for other asset groups, value in use was calculated by discounting future cash flows at a rate of 4.5%.
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24 5. The components of loss on retirement of non-current assets are as follows. (Millions of yen) Fiscal year ended June 30, 2025 Fiscal year ended June 30, 2026 Buildings and structures ¥49 Buildings and structures ¥32 Furniture and fixtures 104 Furniture and fixtures 130 Property, plant and equipment (other) 2 Property, plant and equipment (other) 0 Construction in progress – Construction in progress 3 Intangible assets (other) 3 Intangible assets (other) 59 Removal expenses 1,349 Removal expenses 3,258 Total ¥1,507 Total ¥3,483 6. The components of loss on the closing of stores are as follows. Fiscal year ended June 30, 2025 Loss on store closures represents removal costs incurred in connection with store closures. Fiscal year ended June 30, 2026 Loss on store closures represents removal costs incurred in connection with store closures.
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25 Notes to consolidated statements of comprehensive income The reclassification adjustments, as well as income taxes and deferred tax effects, attributable to each component of other comprehensive income are follows. (Millions of yen) Fiscal year ended June 30, 2025 Fiscal year ended June 30, 2026 Valuation difference on available-for-sale securities Amount arising during the fiscal year ¥2,013 ¥2,925 Reclassification adjustment to profit (loss) – 1 Amount before tax 2,013 2,926 Tax effect (698) (920) Valuation difference on available-for-sale securities 1,315 2,006 Foreign currency translation adjustment Amount arising during the fiscal year (2,234) 13,619 Reclassification adjustment to profit (loss) (13) (704) Amount before tax (2,247) 12,915 Tax effect – – Foreign currency translation adjustment (2,247) 12,915 Remeasurements of defined benefit plans Amount arising during the fiscal year (166) 858 Reclassification adjustment to profit (loss) (111) (122) Amount before tax (277) 736 Tax effect 113 (228) Remeasurements of defined benefit plans (164) 508 Share of other comprehensive income of associates accounted for using equity method Amount arising during the fiscal year 73 (181) Total other comprehensive income ¥(1,023) ¥15,248
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26 Notes to consolidated statements of changes in net assets Fiscal year ended June 30, 2025 (From July 1, 2024 to June 30, 2025) 1. Class and total number of issued shares, and class and number of treasury shares (Thousands of shares) Number of shares as of July 1, 2024 Increase Decrease Number of shares as of June 30, 2025 Issued shares Common shares*1 635,029 325 – 635,353 Total 635,029 325 – 635,353 Treasury shares Common shares*2 38,073 0 – 38,073 Total 38,073 0 – 38,073 Notes 1. The increase of 325 thousand shares in the total number of issued common shares is attributable to the exercise of stock options. 2. The increase of 0 thousand shares in the number of treasury shares of common stock is attributable to the purchase of less-than-one-unit shares. 2. Share acquisition rights and treasury share acquisition rights Classification Details of share acquisition rights Class of shares subject to share acquisition rights Number of shares subject to share rights (shares） As of June 30, 2025 (millions of yen) Number of shares as of July 1, 2024 Increase Decrease Number of shares as of June 30, 2025 The Company Share-based compensation stock options – – – – – ¥246 The Company Paid-in stock options – – – – – 1,833 Total – － – – – 2,080 3. Dividends (1) Dividends paid Resolutions Class of shares Total dividends (millions of yen） Dividends per share (yen) Record date Effective date Ordinary General Meeting of Shareholders held on September 27, 2024 Common shares 14,924 25.0 June 30, 2024 September 30, 2024 Board of Directors meeting held on February 13, 2025 Common shares 5,374 9.0 December 31, 2024 March 25, 2025 Note: Dividends per share of ¥25.0 include a commemorative dividend of ¥9.0 per share to celebrate the achievement of consolidated net sales of ¥2 trillion.
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27 (2) Dividends with a record date in the fiscal year ended June 30, 2025, but with an effective date in the following fiscal year Resolution Class of shares Source of dividends Total dividends (millions of yen） Dividends per share (yen) Record date Effective date Ordinary General Meeting of Shareholders held on September 26, 2025 Common shares Retained earnings 15,529 26.0 June 30, 2025 September 29, 2025 4. Significant changes in net assets Not applicable. Fiscal year ended June 30, 2026 (From July 1, 2025 to June 30, 2026) 1. Class and total number of issued shares, and class and number of treasury shares (Thousands of shares) Number of shares as of July 1, 2025 Increase Decrease Number of shares as of June 30, 2026 Issued shares Common shares*1 635,353 2,541,943 – 3,177,297 Total 635,353 2,541,943 – 3,177,297 Treasury shares Common shares*2 *3 38,073 152,294 3,914 186,454 Total 38,073 152,294 3,914 186,454 Notes 1. The increase of 2,541,943 thousand shares in the total number of issued common shares is attributable to an increase of 2,541,837 thousand shares resulting from a stock split and an increase of 106 thousand shares resulting from the exercise of stock options. 2. The increase of 152,294 thousand shares in the number of treasury shares of common stock is attributable to an increase of 152,294 thousand shares resulting from a stock split and an increase of one thousand shares resulting from the purchase of less-than-one-unit shares. 3. The decrease of 3,914 thousand shares in the number of treasury shares of common shares is attributable to a decrease of 3,914 thousand shares resulting from the exercise of stock options. 4. The Company conducted a 5-for-1 stock split of its common shares, effective October 1, 2025. 2. Share acquisition rights and treasury share acquisition rights Classification Details of share acquisition rights Class of shares subject to share acquisition rights Number of shares subject to share rights (shares） As of June 30, 2026 (millions of yen) Number of shares as of July 1, 2025 Increase Decrease Number of shares as of June 30, 2026 The Company Share-based compensation stock options – – – – – ¥241 The Company Paid-in stock options – – – – – 1,593 Total – – – – – 1,834
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28 3. Dividends (1) Dividends paid Resolutions Class of shares Total dividends (millions of yen） Dividends per share (yen) Record date Effective date Ordinary General Meeting of Shareholders held on September 26, 2025 Common shares 15,529 26.0 June 30, 2025 September 29, 2025 Board of Directors meeting held on February 12, 2026 Common shares 8,966 3.0 December 31, 2025 March 23, 2026 Note: The Company conducted a 5-for-1 stock split of its common shares, effective October 1, 2025. The dividend per share approved by resolution at the Ordinary General Meeting of Shareholders held on September 26, 2025 is stated at the actual amount paid prior to the stock split. (2) Dividends with a record date in the fiscal year ended June 30, 2026, but with an effective date in the following fiscal year The Company plans to submit the following proposal to the Ordinary General Meeting of Shareholders scheduled to be held on September 29, 2026. Resolution Class of shares Source of dividends Total dividends (millions of yen） Dividends per share (yen) Record date Effective date Ordinary General Meeting of Shareholders held on September 29, 2026 Common shares Retained earnings 19,440 6.5 June 30, 2026 September 30, 2026 4. Significant changes in net assets Not applicable.
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29 Notes to consolidated statements of cash flows 1. The following table reconciles cash and cash equivalents at the end of the fiscal year with the corresponding amounts of accounts reported in the consolidated balance sheets. (Millions of yen) Fiscal year ended June 30, 2025 Fiscal year ended June 30, 2026 Cash and deposits ¥171,958 ¥213,293 Time deposits with original maturity of more than three months – (61) Deposits and time deposits pledged as collateral (494) (469) Cash equivalents included in deposits paid 4,373 5,742 Cash and cash equivalents ¥175,837 ¥218,505 2. Major classes of assets acquired and liabilities assumed upon the acquisition of shares of a company newly included in the scope of consolidation Fiscal year ended June 30, 2025 (From July 1, 2024 to June 30, 2025) As a result of the acquisition of shares, Mikuni Restaurant Group, Inc. became a consolidated subsidiary. The following table presents the major classes of assets acquired and liabilities assumed at the time of initial consolidation, as well as the relationship between the acquisition cost of the shares of Mikuni Restaurant Group, Inc. and the net cash outflow for the acquisition. (Millions of yen) Current assets 666 Non-current assets 3,499 Goodwill 10,422 Current liabilities (1,857) Non-current liabilities (1,864) Share acquisition cost 10,866 Accounts payable (other) related to the acquisition of shares (274) Cash and cash equivalents (261) Net cash outflow for the acquisition 10,331 The amounts reflect the significant revision of the initial allocation of the acquisition cost following the finalization of the provisional accounting treatment for the business combination. Fiscal year ended June 30, 2026 (From July 1, 2025 to June 30, 2026) “Purchase of shares of subsidiaries resulting in change in the scope of consolidation” for the fiscal year under review consisted of the payment of ¥274 million in outstanding amounts related to the acquisition of shares of Mikuni Restaurant Group, Inc., which became a consolidated subsidiary through the acquisition of its shares in the previous fiscal year.
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30 3. Significant non-cash transactions Fiscal year ended June 30, 2026 (From July 1, 2025 to June 30, 2026) During the fiscal year under review, Kanemi Co., Ltd., which had been an equity-method associate, became a consolidated subsidiary. The following table presents the assets acquired and the liabilities assumed following the consolidation. (Millions of yen) Current assets 25,035 Non-current assets 11,520 Total assets 36,555 Current liabilities 8,014 Non-current liabilities 895 Total liabilities 8,909 In addition, current assets include cash and cash equivalents of ¥17,864 million, which is recorded under “Increase (decrease) in cash and cash equivalents resulting from change in scope of consolidation.”
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31 Business combination and related matters Finalization of the provisional accounting treatment relating to a business combination The Group applied provisional accounting treatment to the business combination with Mikuni Restaurant Group, Inc., which was executed on April 1, 2025, in the previous fiscal year, and finalized such treatment during the fiscal year under review. Following this finalization of the provisional accounting treatment, significant revisions to the initial allocation of the acquisition cost are reflected in the comparative information included in the consolidated financial statements for the fiscal year under review. As a result of this finalized accounting treatment, the provisionally calculated goodwill of ¥10,050 million increased ¥371 million to ¥10,422 million. Moreover, the balances of the following balance sheet items as of the end of the previous fiscal year increased by the amounts described below: - Right-of-use assets: ¥48 million - Accounts payable – other: ¥274 million - Lease liabilities under current liabilities: ¥14 million - Lease liabilities under non-current liabilities ¥131 million - Foreign currency translation adjustment: ¥0 million - Non-controlling interests: ¥0 million There is no impact on the consolidated statements of income for the previous fiscal year ended June 30, 2025. Business combination through acquisition Kanemi Co., Ltd., which had been an equity-method associate of the Company, repurchased a portion of its issued shares as treasury shares as of August 20, 2025, resulting in the Company holding 40.3% of its voting rights. Accordingly, Kanemi Co., Ltd. was newly included in the scope of consolidation under the substantive control standard. (1) Overview of business combination (i) Name and business description of the acquired company Name of the acquired company: Kanemi Co., Ltd. Business description: Manufacture and sale of boxed lunches, sushi, rice balls, and prepared foods (ii) Primary reasons for business combination The prepared food business operated by Kanemi Co., Ltd. is expected to achieve strong growth in the future. Furthermore, it was concluded that leveraging the strengths of both companies would enhance the corporate value of both companies. (iii) Effective date of this business combination August 20, 2025 (deemed acquisition date: September 30, 2025) (iv) Legal form of business combination Acquisition of treasury shares by the acquired company (v) Names of the companies after the business combination No change (vi) Change in voting rights ratio Ratio of voting rights held immediately before the business combination: 39.4% Increase in ratio of voting rights changed on the acquisition date: 0.9% Ratio of voting rights held on the acquisition date: 40.3% (vii) Primary basis for determining the acquiree The ratio of the Company’s voting rights increased as a result of Kanemi Co., Ltd.’s acquisition of its own treasury shares. (2) Period for which the acquiree's operating results are included in the consolidated financial statements From October 1, 2025 to June 30, 2026
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32 (3) Measurement of the acquired company and related matters (i) Acquisition cost for the acquired company Fair value, as of business combination date, of the shares held immediately before the business combination date ¥12,846 million (ii) Difference between the acquisition cost of the acquiree and the aggregate acquisition cost of individual transactions leading to the acquisition Gain on step acquisitions ¥362 million (4) Major acquisition-related costs and amount No acquisition-related costs were incurred. (5) Amount of goodwill recognized, reason for its recognition, and the amortization method and period (i) Amount of goodwill recognized ¥1,699 million (ii) Reason for the recognition of goodwill As the acquisition cost exceeded the net amount of assets acquired and liabilities assumed, the difference was recognized as goodwill. (iii) Amortization method and period of goodwill Goodwill is amortized using the straight-line method over five years (6) Major components of assets acquired and liabilities assumed at the business combination date (Millions of yen ) Current assets 25,035 Non-current assets 11,520 Total assets 36,555 Current liabilities 8,014 Non-current liabilities 895 Total liabilities 8,909 (7) Estimated impact on the consolidated statement of income for the fiscal year under review, assuming that the business combination had been completed on the first day of the fiscal year, and the method of calculating such estimate (Millions of yen, unless otherwise note) Net sales 22,035 Operating income 999 Ordinary profit 1,028 Profit before income taxes 990 Profit attributable to owners of parent 664 Basic earnings per share (yen) 0.22 Method for calculating the estimated amount The estimated amount is the difference between information on net sales and profit calculated assuming that the business combination had been completed on the first day of the fiscal year and the information on net sales and profit reported in the consolidated statement of income of the acquiring company. Gain on step acquisitions and amortization of goodwill recognized in connection with the business combination have not been taken into account. The Company conducted a 5-for-1 stock split of its common shares, effective October 1, 2025. Basic earnings per share are calculated assuming that this stock split had been conducted at the beginning of the fiscal year under review. This note has not been audited.
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33 Notes on segment information and related disclosures [Segment information] 1. Overview of reportable segments The Company’s reportable segments are those for which separate financial information is available and which are regularly reviewed by the Board of Directors for the purpose of determining the allocation of management resources and evaluating performance. The Company is principally engaged in merchandise sales and has three reportable segments: Domestic Business, North America Business, and Asia Business. The Domestic Business segment operates stores primarily under the Don Quijote format, a big convenience and discount store; the MEGA Don Quijote and MEGA Don Quijote UNY formats, family-oriented general discount stores; and the Apita and Piago formats, general merchandise stores. The North America Business segment operates discount stores and supermarkets in Hawaii, California, and other areas in the United States. The Asia Business segment operates DON DON DONKI stores in Asia under a Japanese-brand specialty store concept. 2. Method of determining the amounts of net sales, profit or loss, assets, liabilities, and other items for each reportable segment Accounting treatment methods of reportable segments are the same as those described in Significant matters forming the basis for preparing consolidated financial statements. Segment profit is measured based on operating income. Intersegment sales or transfers are primarily determined based on market prices. 3. Information on the amounts of net sales, profit or loss, assets, liabilities, and other items for each reportable segment Fiscal year ended June 30, 2025 (From July 1, 2024 to June 30, 2025) (Millions of yen) Reportable segments Adjustment (Note 1) Amount recorded in consolidated financial statements (Note 2) Domestic Business North America Business Asia Business Total Net sales Sales to external customers 1,896,113 259,437 91,209 2,246,758 – 2,246,758 Intersegment sales or transfers 14,140 33 245 14,418 (14,418) – Total 1,910,253 259,470 91,454 2,261,176 (14,418) 2,246,758 Segment profit 158,084 2,283 1,929 162,296 – 162,296 Segment assets 1,181,856 202,022 27,944 1,411,822 99,624 1,511,445 Other items (Note 3) Depreciation 34,179 10,916 2,794 47,889 – 47,889 Increases in property, plant and equipment and intangible assets 43,199 7,995 1,517 52,711 – 52,711 Notes 1. The reconciliation of segment assets of ¥99,624 million includes ¥104,122 million of the Company’s surplus funds (cash and deposits and investment securities), which are classified as corporate assets, and ¥(4,498) million related to eliminations of receivables among reportable segments and other items. 2. Segment profit corresponds to operating income in the consolidated statements of income.
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34 3. Increases in property, plant and equipment and intangible assets include an increase in long-term prepaid expenses. Fiscal year ended June 30, 2026 (From July 1, 2025 to June 30, 2026) (Millions of yen) Reportable segments Adjustment (Note 1) Amount recorded in consolidated financial statements (Note 2) Domestic Business North America Business Asia Business Total Net sales Sales to external customers 2,068,195 277,936 99,129 2,445,260 – 2,445,260 Intersegment sales or transfers 13,971 – 296 14,267 (14,267) – Total 2,082,166 277,936 99,425 2,459,527 (14,267) 2,445,260 Segment profit 165,829 3,497 5,517 174,842 – 174,842 Segment assets 1,239,791 200,709 31,729 1,472,229 130,156 1,602,386 Other items (Note 3) Depreciation 39,077 12,349 2,173 53,599 – 53,599 Increases in property, plant and equipment and intangible assets 58,702 5,540 277 64,518 – 64,518 Notes 1. The reconciliation of segment assets of ¥130,156 million includes ¥133,220 million of the Company’s surplus funds (cash and deposits and investment securities), which are classified as corporate assets, and ¥(3,064) million related to eliminations of receivables among reportable segments and other items. 2. Segment profit corresponds to operating income in the consolidated statements of income. 3. Increases in property, plant and equipment and intangible assets include an increase in long-term prepaid expenses. 4. The segment information for the fiscal year ended June 30, 2025 is disclosed based on the amounts after reflecting significant revisions to the initial allocation of acquisition cost resulting from the finalization of the provisional accounting treatment described in Notes – Business combination and related matters. 4. Impairment losses, goodwill or other information related to non-current assets by reportable segment Significant changes in the amount of goodwill During the fiscal year under review, goodwill of ¥1,699 million was recognized in the Domestic Business segment as a result of the inclusion of Kanemi Co., Ltd. in the scope of consolidation. As the allocation of the acquisition cost for the business combination with Mikuni Restaurant Group, Inc., which was conducted on April 1, 2025, was incomplete, the amount of goodwill was calculated provisionally. However, during the fiscal year under review, such allocation of the acquisition cost was completed and the provisional accounting treatment was finalized. As a result, the amount of goodwill in the North America Business segment was revised.
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35 [Related information] Fiscal year ended June 30, 2025 (From July 1, 2024 to June 30, 2025) 1. Products and services The information is omitted, as the same information is presented in “1. Overview of Consolidated Operating Results, (1) Consolidated operating results, (ii) Net sales by business.” 2. Regions (1) Net sales (Millions of yen) Japan North America Asia Total 1,896,113 259,437 91,209 2,246,758 Note: Net sales are classified by country or region based on the location of customers. (2) Property, plant and equipment (Millions of yen) Japan North America Asia Total 633,540 76,792 7,701 718,033 3. Major customers This information is omitted because there were no external customers to whom sales accounted for 10% or more of net sales reported in the consolidated statement of income. Fiscal year ended June 30, 2026 (From July 1, 2025 to June 30, 2026) 1. Products and services The information is omitted, as the same information is presented in “1. Overview of Consolidated Operating Results, (1) Consolidated operating results, (ii) Net sales by business.” 2. Regions (1) Net sales (Millions of yen) Japan North America Asia Total 2,068,195 277,936 99,129 2,445,260 Note: Net sales are classified by country or region based on the location of customers. (2) Property, plant and equipment (Millions of yen) Japan North America Asia Total 647,605 78,338 6,245 732,188 3. Major customers This information is omitted because there were no external customers to whom sales accounted for 10% or more of net sales reported in the consolidated statement of income.
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36 [Impairment losses on non-current assets by reportable segment] Fiscal year ended June 30, 2025 (From July 1, 2024 to June 30, 2025) (Millions of yen) Reportable segments Adjustment Amount recorded in consolidated statements of income Domestic Business North America Business Asia Business Total Impairment losses 2,482 14,955 1,029 18,467 – 18,467 Fiscal year ended June 30, 2026 (From July 1, 2025 to June 30, 2026) (Millions of yen) Reportable segments Adjustment Amount recorded in consolidated statements of income Domestic Business North America Business Asia Business Total Impairment losses 4,561 6,905 27 11,492 – 11,492 [Goodwill amortization and unamortized balances by reportable segment] Fiscal year ended June 30, 2025 (From July 1, 2024 to June 30, 2025) (Millions of yen) Reportable segments Adjustment Amount recorded in consolidated financial statements Domestic Business North America Business Asia Business Total Amortization 228 4,763 – 4,991 – 4,991 Balance at the year-end 1,673 61,551 – 63,224 – 63,224 There were no amortization expenses or unamortized balances of negative goodwill arising from business combinations and other transactions conducted prior to April 1, 2010. Fiscal year ended June 30, 2026 (From July 1, 2025 to June 30, 2026) (Millions of yen) Reportable segments Adjustment Amount recorded in consolidated financial statements Domestic Business North America Business Asia Business Total Amortization 483 5,718 – 6,201 – 6,201 Balance at the year-end 2,889 61,810 – 64,700 – 64,700 There were no amortization expenses or unamortized balances of negative goodwill arising from business combinations and other transactions conducted prior to April 1, 2010. [Gains on bargain purchase by reportable segment] Fiscal year ended June 30, 2025 (From July 1, 2024 to June 30, 2025) Not applicable. Fiscal year ended June 30, 2026 (From July 1, 2025 to June 30, 2026) Not applicable.
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37 Per share information Fiscal year ended on June 30, 2025 (From July 1, 2024 to June 30, 2025) Fiscal year ended on June 30, 2026 (From July 1, 2025 to June 30, 2026) Net assets per share ¥202.84 Basic earnings per share 30.32 Diluted earnings per share 30.19 Net assets per share ¥235.79 Basic earnings per share 36.84 Diluted earnings per share 36.71 Notes 1. The Company conducted a 5-for-1 stock split of its common shares, effective October 1, 2025. Assuming that this stock split had been conducted at the beginning of the previous fiscal year, net assets per share, basic earnings per share, and diluted earnings per share have been calculated accordingly. 2. The following are the basis for calculating basic earnings per share and diluted earnings per share Fiscal year ended on June 30, 2025 (From July 1, 2024 to June 30, 2025) Fiscal year ended on June 30, 2026 (From July 1, 2025 to June 30, 2026) Basic earnings per share Profit attributable to owners of parent (million yen) 90,512 110,088 Amount not attributable to common shareholders (million yen) – – Profit attributable to owners of parents relating to common shares (million yen) 90,512 110,088 Average number of common shares outstanding during the fiscal year (share) 2,985,366,170 2,988,298,063 Diluted earnings per share Adjustments to profit attributable to owners of parent (million yen) – – Increase in the number of common shares (share) 12,733,575 10,637,540 [of which, share acquisition rights] [12,733,575] [10,637,540] Summary of potential shares not included in the calculation of diluted earnings per share due to the absence of a dilutive effect – –
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38 Significant subsequent events Business integration with Olympic Group Corporation through a share exchange agreement The Company and Olympic Group Corporation (hereinafter “Olympic Group,” and together with the Company, hereinafter the “Companies”) resolved at their respective Boards of Directors meetings on April 6, 2026 to conduct a business integration through a share exchange (hereinafter the “Share Exchange”) with the Company as the wholly owning parent company resulting from the Share Exchange and Olympic Group as the wholly owned subsidiary resulting from the Share Exchange. On the same day, the Companies entered into a share exchange agreement (hereinafter the “Share Exchange Agreement”) and conducted the Share Exchange with an effective date of July 1, 2026. (1) Overview of the Share Exchange (i) Name and business description of the wholly owned subsidiary resulting from the Share Exchange Name of the wholly owned subsidiary resulting from the Share Exchange: Olympic Group Corporation Business description: Formulation of business strategies for the Olympic Group as a whole, allocation of management resources, centralized management of indirect operations, and the management and operation of shopping centers, among others (ii) Primary reasons for implementing the Share Exchange Olympic Group operates stores primarily in the Tokyo metropolitan area, and by converting these stores into Don Quijote or MEGA Don Quijote formats, the Group expects to expand its store network. In addition, the new retail format Robin Hood is expected to enable comprehensive regional expansion centered around the Kanto region, and is anticipated to accelerate both the rollout of the new format and the pace of store openings. Furthermore, the Group expects to enhance its competitiveness in the non-food category by combining the price competitiveness in food products and daily necessities of the Group and the Olympic Group with the Olympic Group’s expertise in the non-food category. (iii) Effective date of the Share Exchange July 1, 2026 (iv) Legal form of business integration Share exchange (v) Names of the companies after the business integration No change (vi) Ratio of voting rights to be acquired Ratio of voting rights to be acquired through the Share Exchange 100% (vii) Primary basis for determining the acquiree Acquisition of the 100% voting rights of Olympic Group through the Share Exchange (2) Share exchange ratio by class of shares, the method for calculating such ratio, and the number of shares to be delivered (i) Share exchange ratio by class of shares 1.18 shares of the common shares of the Company were delivered per share of Olympic Group (ii) Method for calculating share exchange ratio To secure fairness and appropriateness, each of the Companies requested an independent third-party valuation institution to calculate the share exchange ratio, and determined the ratio through discussions between the parties based on the submitted reports. (iii) Number of shares to be delivered Treasury shares of the Company 27,105,063 shares (3) Details and amounts of major acquisition-related costs Fees, commissions, and other payments to advisors ¥581 million (estimated amount) (4) Amount of goodwill to be recognized, reasons for recognition, amortization methods and periods These items have not been determined at this time.
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39 (5) Amounts of assets acquired and liabilities assumed at the business combination date and their major components These items have not been determined at this time.