Bridge Report:（9278）BOOKOFF GROUP the First Half of Fiscal Year ending May 2026

President Yasutaka Horiuchi	BOOKOFF GROUP HOLDINGS LIMITED (9278)

Company Information

Stock Information

*The share price is the closing price on January 26. Figures are from 2Q of FY 5/26 financial results. ROE and BPS are previous results.

Consolidated Earnings Trends

* The forecasted values were provided by the company. Unit: million yen. Net income is profit attributable to the owners of the parent. The same applies hereafter.

We present this Bridge Report reviewing the first half of the fiscal year ending May 2026 financial results of BOOKOFF GROUP HOLDINGS LIMITED.

Table of Contents

Key Points
1. Company Overview
2. First Half of Fiscal Year ending May 2026 Financial Results
3. Fiscal Year ending May 2026 Financial Forecast
4. Mid-term Management Policy and its Progress
5. Message from President Horiuchi
6. Conclusions
<Reference: Corporate Governance>

Key Points

• In the first half of the fiscal year ending May 2026, sales grew, but profit declined. Sales increased 7.6% year on year to 61,104 million yen. Sales rose in all of the three business segments. Ordinary income dropped 15.1% year on year to 1,454 million yen. While gross profit increased only 7.0% year on year due to the growth of sales of trading cards and hobby goods, whose gross profit margins are low, their marketing activities and other corporate activities were normalized from the temporary restriction due to the investigation into the misconduct in the previous fiscal year, so expenses augmented. The premium services business posted a loss. In the cumulative second quarter, consolidated profit dropped, but in the second quarter (Sep. to Nov.), sales and profit grew year on year and quarter on quarter.

   

• The earnings forecast has been left unchanged. For the fiscal year ending May 2026, sales and profit are expected to grow, and all kinds of profits are projected to hit a record high. It is forecast that sales will increase 6.5% year on year to 127 billion yen, operating income will rise 10.2% year on year to 3.8 billion yen, and ordinary income will grow 2.5% year on year to 4 billion yen. In the BOOKOFF operations in Japan, they will continue the investment in business for developing a sustainable system while implementing initiatives for preventing misconduct. The forecast dividend amount is 30.00 yen/share, up 5.00 yen/share from the previous fiscal year. The expected payout ratio is 23.9%.

   

• We asked President Horiuchi to give a message to shareholders and investors. He said, “Our company aims to achieve sales of 135 billion yen and an ordinary income of 5 billion yen in the fiscal year ending May 2028. In the first half of this fiscal year, we reached the half-way point, and our initiatives have progressed steadily. The premium service business is inevitably struggling to some degree, but the implementation of strategies for this business from the viewpoint of reeling in a broader range of customers would contribute to our future business. Accordingly, we would like to realize a 100-store structure through various improvements as soon as possible. For the fiscal year ending May 2026, we aim to achieve an ordinary income of 4 billion yen, but our final target is 5 billion yen, so the important theme for the following fiscal years is the monetization of our reuse specialty shops and cleanout service in which we are currently investing. Our core business is performing well, and we plan to launch new businesses speedily, so we hope that shareholders and investors will have expectations for them.”

   

• The progress rate toward the full-year forecast as of the end of the first half was 48.1% for sales and 36.4% for ordinary income. These are almost as usual like in the first quarter. The procurement in the premium service business is recovering, but this is attributable to mainly precious metals, whose profit margins are low, so its contribution to profit seems to be minor. In Malaysia, it is taking some to improve the sales at existing stores, so we would like to expect the recovery this fiscal year. On the other hand, the sales at existing stores in the BOOKOFF operations in Japan, which is the mainstay, remain healthy, and enlarged stores have increased steadily, improving productivity. We would like to pay attention to how much they can make progress toward “an ordinary income of 4 billion yen,” which is the goal for this fiscal year.

1. Company Overview

The company runs a group of the largest reuse chain stores that has expanded its reuse business into various fields, including Books, CDs, DVDs, video games, apparel, sporting goods, baby goods, and miscellaneous goods. It has over 800 (directly managed + franchised) store networks covering all over the country. Also, they strengthen EC collaboration.

[1-1 Corporate Philosophies of the BOOKOFF Group]

・Contributing to society through our business activities.
・the pursuit of employees’ material and spiritual wellbeing.
With these corporate philosophies, the BOOKOFF Group has made efforts towards the reuse of assorted items, with a focus on the purchase and sale of “books.” By doing so, they have nurtured the brand, the store network, and human resources, which in turn have become the Group's strength. With their mission “Be a source of an enjoyable and prosperous life for as many people as possible,” they aim to be a leading “reuse” company, and a company that can continue to grow while enabling all employees to do their jobs with confidence and enthusiasm.

[1-2 Business Description]

Their three core businesses are the BOOKOFF operations in Japan, the premium services business, and the overseas business. Other businesses include the operation of the trading card shop Japan TCG Center and the provision of a personal service called " BOOKOFF cleanout service" that declutters customers' homes. The company is working on various new business development initiatives to achieve medium-term revenue growth.

(1) BOOKOFF operations in Japan
As the chain headquarter of the reuse stores “BOOKOFF” for books, software media, and more, the company operates the franchise (FC) system and directly managed stores. There are four types of directly managed stores; 1) “BOOKOFF” (Books, CDs, DVDs, video games, trading cards, hobby goods, home appliances and mobile phones, etc.), 2) “BOOKOFF PLUS” (a medium-sized complex BOOKOFF with Apparel accessories), and 3) “BOOKOFF SUPER BAZAAR” (a large-sized complex BOOKOFF with a wide variety of commodities; Books, CDs, DVDs, video games, trading cards, hobby goods, home appliances (audio and visual devices, computers, etc.), apparel, luxury-brand goods, sporting goods, baby goods, watches, tableware, household products etc.) and “ASO-VIVA” specializing in the sale and purchase of “enjoyable items,” such as trading cards, game software, and hobby-related products.
The number of stores means the sum of the number of directly managed stores and the number of franchised stores as of the end of November 2025.

Avg. floor space, Number of stores	About 429.8 m2 590 stores	Avg. floor space, Number of stores	About 3,140 m2 52 stores
Merchandise	Books, CDs, DVDs, video games, trading cards, hobby goods, home appliances, mobile phones, etc.	Merchandise	“BOOKOFF” + Apparel/luxury brand goods/household products/ sporting goods/kitchenware, etc.
Avg. floor space, Number of stores	About 992 m2 67 stores	Avg. floor space, Number of stores	About 132 m2 5 stores
Merchandise	“BOOKOFF”＋ Apparel/accessories, etc.	Merchandise	Trading cards, video games, hobby goods

(Source: the Company’s material)

“BOOKOFF” and “BOOKOFF PLUS,” which are conventional small and medium-sized stores of books software media, are important points of contact with customers and purchase sites, which cover the areas surrounding stations, downtown areas, and roadside areas.
“BOOKOFF SUPER BAZAAR (BSB),” a large-sized general store of reuse products with an area of 500-1,000 tsubo (1,650-3,300 m2), which deals in a variety of products, exerts unrivaled competitive advantages as a regional flagship store.

The sales and segment profit of the BOOKOFF operations in Japan in the fiscal year ended May 2025 were about 104.3 billion yen and 5.3 billion yen, respectively, accounting for about 90% of total sales and segment profit. “BOOKOFF” and “BOOKOFF PLUS” accounted for about 50%, and “BOOKOFF SUPER BAZAAR (BSB)” accounted for about 40% of the sales of the BOOKOFF operations in Japan.

The company is promoting the "One BOOKOFF" initiative, which aims to deliver unique, "once-in-a-lifetime encounters" with reused items to all customers in the most optimal way, utilizing the official smartphone app, the EC channel, and the nationwide store network. Efforts include expanding app members, operating an electronic purchasing system (reducing user reception time and increasing store operational efficiency), linking store inventory with e-commerce, implementing in-store pickup services for e-commerce products, and introducing cashless purchasing systems.

The number of app members was 9.87 million as of the end of November 2025.
Over 30% of our customers at the register are app members. App-based promotions have been effective in attracting customers, leading to an increase in the number of customers visiting the store.
The company shifts its focus to increase the frequency of store visits and sales per member in line with the increase in the number of members.
The company is enhancing CRM and enriching its loyalty program to visualize and reward customer engagement with BOOKOFF within the app. The company intends to closely connect with customers' daily lives and encourage them to return to the store and make purchases again.
At the same time, the company is also working on a large-scale development project to revamp its store POS and system.

(2) Premium Services Business
They aim to promote customers who own valuable items, to which BOOKOFF has not appealed enough, to use their reuse services with various brands.

The company operates “hugall” (18 shops), which purchases secondhand products from wealthy people in major department stores, “Rehello by BOOKOFF (formerly BOOKOFF Purchasing Consultation Desks)” (23 stores), which purchases anything, not just books, but also including watches, precious metals, apparel, luxury-brand goods, tableware, and sporting goods and “aidect” (13 shops) for offering comprehensive jewelry-related services, which buy and sell jewels, receive orders, repair and remake jewels. The total number of stores is 54 as of the end of November 2025.

The strengths of “hugall” include the rich know-how to operate shops in department stores, the swift recoupment of investment, and the purchase by a specialized team versed in various genres visiting each customer.
“Rehello by BOOKOFF” handles not only used products of luxury brands, but also used books and software media, to differentiate its service from competitors’ services.

In January 2023, the company substantially expanded the product lineup and functions of its e-commerce website, which had been operating under the name "hugall fashion," and newly opened it as "Rehello," a site handling the premium lines of the BOOKOFF Group.
The site aims to expand the breadth and depth of the customer experience by offering services such as ordering products from BOOKOFF Group stores (some stores), confirming products to be purchased, in-store pickup, fitting services, and accepting orders for refurbishing and repairing services through the site.
Accordingly, they renamed “BOOKOFF Purchasing Consultation Desk” “Rehello by BOOKOFF” (completed at all stores).
The premium services business supplies products to BOOKOFF SUPER BAZAAR, etc., contributing to the BOOKOFF group’s revenues, and opens shops in regions and places where it is difficult to open BOOKOFF stores, contributing to the brand development of the corporate group, and generates synergetic effects, such as the sale of apparel via the e-commerce website “Rehello.”

(3) Overseas Business
As for overseas business operations, BOOKOFF U.S.A. INC. runs “BOOKOFF” stores (18 directly managed stores) in the United States, BOK MARKETING SDN.BHD. runs "Jalan Jalan Japan" in Malaysia with 17 directly managed stores and 2 FC store for a total of 19 stores, J&K TRADING LLC operates 7 FC stores in Kazakhstan. In addition, the company has three FC stores in France.
They have established a position as a unique, highly entertaining retailer in each region, and give top priority to “the development of native employees.”
The number of stores is as of the end of November 2025.

* Malaysia
Entered in 2016. The business in Malaysia is profitable, and it not only contributes to earnings, but also serves as an exit strategy for the Group (it sells products that could not be sold at stores in Japan locally). Previously, unsold products in Japan were often discarded as industrial waste. However, the Malaysian operations have provided a solution, enabling us to significantly reduce disposal costs. Store operations require securing a large number of products and operations to deal with a large number of products, making it difficult for other companies to develop similar businesses. As a result, this business is unique to the company, which boasts the best sales in the industry. Local subsidiaries are managed by expatriate employees, and stores are operated by mainly store managers and local staff who have been hired in each region. They will keep concentrating on personnel development, and further enrich the store network.

* Kazakhstan
In October 2022, the Jalan Jalan Japan Zhetysu-Semirechye store was opened in Almaty, Kazakhstan, as a participating store, by a local company. Kazakhstan's capital, Almaty, is the largest city in Kazakhstan, located at roughly the same latitude as Hokkaido. By opening a store there, the company can develop it as an outlet for Japan's winter clothing and goods.
In order to increase directly managed stores, they established a joint venture company in April 2024, but in order to shift to a system for opening stores at an accelerated rate based on more flexible and swifter decision making, they terminated the joint venture contract in July 2025, and transferred their shares. From now on, they will make efforts to increase franchised stores.

* The U.S.
Made inroads into the U.S. market in 2000. The company purchase and sell books, software media, anime goods, hobby goods, etc. like BOOKOFF stores in Japan.
Like in Malaysia, local subsidiaries are managed by expatriate employees, and stores are operated by mainly local staff who have been hired in each region.

(4) Business development domain
Currently, they engage in mainly the following business development projects.

① Business of operating the shop specializing in trading cards “Japan TCG Center”
The trading card shop “Japan TCG Center” purchases and sells used cards, and deals in a wide array of brand-new packages and related goods. The shop has a “duel space” for playing trading cards and targets a broad range of customers, including beginners and experts. The number of shops was 6 as of the end of November 2025.

② Cleanout business
This service is for meeting the needs for cleaning out rooms at the time of inheritance, disposal of goods before death, relocation, etc. In this service, they clean out rooms by sorting, removing, disposing of, and purchasing unnecessary items. The items they have bought will be reused and recycled as much as possible, to reduce waste.

③ Business of recycling CD plastics
With the technology provided through partnership with an external enterprise, the company recycles plastics from about 1,700 tons of unsold CDs and DVDs at BOOKOFF stores. They sell them to makers, etc. to provide new value.

[1-3　Company strengths]

The company believes that its strengths in the reuse market are primarily in the following areas.

（1）Recognition No.1
The results of a survey of domestic reuse chain users indicate that the company has 96% awareness. Almost all respondents are familiar with the company.
The company's long track record of operation and nationwide expansion of brick-and-mortar stores are the reasons for this, and are strong barriers to entry that cannot be easily followed by other companies.

（2）Book inventory No.1
The number of books in stock exceeds 100 million. Books are core products of the company, which started its business with the purchase and sale of used books. Books are read by a broad range of people, so customers tend to start using the reuse-related service through books. Accordingly, it can be expected that customers will buy other products. Namely, books contribute significantly to the development of a stable customer base.

（3）Human Resource Development System
In order to realize its business mission of " Be a source of an enjoyable and prosperous life for as many people as possible," the company believes that human resource development, as well as brand power and store network mentioned above, is essential. Therefore, the company have established a human resource development system for all employees, including not only full-time employees but also part-time employees.
The company is focusing on human resource development to support store operations through a human resource development curriculum based on its management philosophy and other philosophies and various manuals, as well as a career development system for all employees.
In addition to improving customer satisfaction through "smiling, courteous, and speedy responses" at stores, the company is also working to raise the awareness of each employee to participate in improving operational efficiency at the distribution center.

（4）Creating stores that offer peace of mind
The company is working to create stores where users can sell goods with peace of mind by providing purchase services from the user's perspective and ensuring compliance with laws and regulations.
In particular, with regard to the appropriateness of purchase prices, which is of greatest concern to users, the company has established a purchase price database at its head office based on a vast amount of transaction data, which no other company has, and uses this database as the basis for purchases at each of its stores.

[1-4　Return to shareholders]

Considering profit allocation as one of the most important items, they will utilize internal reserve effectively for strategic investment and enhancement of the financial standing to improve corporate value.
Their basic policy is to keep paying dividends stably with a payout ratio of 20-30% with respect to consolidated net income.

[1-5 Sustainability]

(1) Fundamental Philosophy
Under the group's management philosophy, they treat sustainability as a crucial element of management. The company recognizes that their customers' activities of selling and buying at "BOOKOFF" contribute to the extension of product lifespans and waste reduction, aligning with the "vision of a circular society. "
In August 2023, the company articulated this stance by establishing a Basic Policy for Sustainability and a Human Rights Policy, reinforcing the dedication to ESG-focused management.

<Basic Sustainability Policy>

<Human Rights Policy>
We believe that the protection of fundamental human rights is a prerequisite for creating a sustainable world. Therefore, in order to understand human rights and fulfill their responsibility to respect human rights, they have established the following human rights policy.

1. Basic Stance on Human Rights
We understand that corporate activities can potentially and overtly affect human rights. This policy conforms to international standards and will be put into practice in accordance with the United Nations "Guiding Principles on Business and Human Rights. "

2. Scope of this Policy
This policy applies to all directors and all employees (including part-time employees) of group companies.

3. Commitment to Addressing Human Rights Issues in Corporate Activities
① Elimination of Discrimination
We respect individual human rights and diversity. We do not discriminate on any grounds including gender, age, nationality, race, religion, social background, employment status, marital status, pregnancy, health condition, gender identity, physical characteristics, or the presence or absence of disabilities.
② Appropriate Workplace Environment
We strive to provide a workplace environment where the human rights of all directors and employees of group companies are respected. This includes providing a healthy and safe workplace environment free from all forms of harassment, whether mental or physical, ensuring proper management of working hours, guaranteeing minimum wages, protecting privacy, and respecting freedom of association and the right to collective bargaining. We also do not tolerate any form of forced labor, child labor, or human trafficking.

4. Human Rights Due Diligence
In line with the United Nations "Guiding Principles on Business and Human Rights," we conduct human rights due diligence to identify, assess, prevent, and mitigate the negative impacts of corporate activities on human rights. Should it become evident that we are causing or contributing to human rights abuses, we will strive to correct these issues.

5. Remedial Measures
They provide a reporting system that allows all stakeholders to report human rights concerns without suffering any disadvantage. In the event of an allegation of human rights violations, they will promptly investigate, take remedial action to correct the negative impact on human rights, take steps to reduce future risks, and approach related people.

6. Education and Training
To ensure the effectiveness of this policy, they continually provide appropriate education and training to all directors and employees of group companies.

<Creation of value as a leading company in the reuse industry>
As a leading company in the reuse industry, the company pursues “continuous profit growth” and “improvement in social value of reuse” based on the strengthening of human capital, and strives to improve the sustainability of their business through the synergy between the above two and increase their corporate value.

(Source: the Company’s material)

(2) Main Initiatives
① E (environment)
In order to realize a recycling society, the company will enhance its approach to slow down and reduce the consumption of resources.
Through the domestic BOOKOFF chain, the company purchases about 410 million items per year and sells about 280 million items per year.
The reuse of CDs, DVDs, game software, and clothes is estimated to reduce CO2 emissions by about 550,000 tons per year.
In addition to the reuse (purchase and sale) of items, which is the mainstay, the company develops private-brand products by utilizing discarded books, recycles and sells plastics from discarded CDs and DVDs, and sells upcycled items through REMARKET, as activities for expanding reuse and recycling businesses.

In response to climate change issues, the company announced its support for the TCFD recommendations in August 2023.

(Source: the Company’s material)

② S (society)
◎ Human Capital Enhancement
The company believes that promoting diversity, which is the foundation for achieving well-being, is the most critical challenge.

Under the diversity policy, the following approaches will be taken.
1. Commitment from the management team
2. Cultivating an inclusive corporate culture that welcomes and respects diversity
3. Fair, equitable, and transparent system flow
4. Evaluation and confirmation
5. Employee participation and engagement

(Source: the Company’s material)

◎ Initiatives
The company will collaborate with government agencies, companies and organizations to solve a wide range of social problems. By forming partnerships with related parties, it will lead the way in promoting a recycling-oriented society.
In October 2024, they held “Reclothes Cup 2024,” one of Japan’s largest fashion contests with upcycled used clothes in Fukuoka Prefecture, for the purpose of increasing the value of used clothes by redesigning them freely and facilitating the recycling of materials. In November 2024, they conducted Sustainable Book Project, in which they would donate books to orphanages according to the donation amount calculated from the number of books purchased at 145 stores in 16 prefectures, and donated a total of 5,325 books to 50 orphanages, creating opportunities for children to read in municipalities with few bookstores.

③ G (governance)
The company is striving to enrich the dialogue with shareholders and investors, by enriching the website contents, holding briefing sessions for individual investors, streaming the videos of briefing sessions online, holding general meetings of shareholders on Saturdays, involving President Horiuchi in meetings for institutional investors, and disclosing information in English.
For their governance structure, they established a sustainability strategy committee in 2022.
The representative director and president serves as chair of the committee, and holds a meeting once or more times per six months. The committee identifies various risks and opportunities regarding climate change, etc., discusses policies and strategies, and monitors the progress of action plans in each section.

(3) Response to material issues
For sustainability-oriented business administration, they identified material issues based on the basic policy for sustainability and implemented initiatives for the environment, society, and governance (ESG).
Regarding material issues, they have extracted and identified business-related items and themes with a significant social impact based on “Sustainable Development Goals (SDGs) and targets” for attaining them, but currently, they extract and identify them from the viewpoints of importance for stakeholders and BOOKOFF under the basic sustainability policy.
Material issues regarding sustainability are as follows.

（Source: the Company’s material, etc.）

2. First Half of Fiscal Year ending May 2026 Financial Results

[2-1 Consolidated Results]

* Unit: million yen.

Sales increased, but profits decreased.
Sales increased 7.6% year on year to 61,104 million yen. Sales rose in all of the three business segments.
Ordinary income dropped 15.1% year on year to 1,454 million yen. Sales increased, but profitable books performed well. While gross profit increased only 7.0% year on year due to the growth of sales of trading cards and hobby goods, whose gross profit margins are low, their marketing activities and other corporate activities were normalized from the temporary restriction due to the investigation into the misconduct in the previous fiscal year, so expenses augmented. The premium services business posted a loss.
Profit dropped, but in the second quarter (Sep. to Nov.), sales and profit grew year on year and quarter on quarter.

◎ Number of Group stores
As of the end of November 2025, there were 732 stores in the BOOKOFF operations in Japan (373 directly managed stores and 359 FC stores), 54 stores in the premium services business, and 47 stores in the overseas business (35 directly managed stores and 12 FC stores).

Opening of new stores (direct)

Note: Since the account settlement periods of the overseas consolidated subsidiaries are different from the consolidated one, Jalan Jalan Japan is classified as a newly opened store in the period of April 2025 to September 2025, and BOOKOFF USA is classified as a newly opened store in the period between March 2025 and August 2025.

[2-2　Segment Trends]

* Unit: million yen. Composition ratio for segment income means the ratio of profit to sales.

(1) BOOKOFF operations in Japan
Sales increased, but profit decreased.
At existing directly managed stores, the sales of trading cards, hobby goods, apparel, precious metals, watches, brand-name bags, and books increased. The opening of new stores also contributed to this.
Profit declined, as SG&A expenses augmented due to the increase in system-related expenses caused by the upgrade of system devices and the revision of prices of tools, as well as the costs for operating stores, including personnel expenses. In the second quarter (Sep. to Nov.), profit grew, as the increase in gross profit exceeded the augmentation of costs.

◎ Existing Store Sales
The sales at existing stores in the first half and second quarter (Sep. to Nov.) were 106.5% and 109.1% of those in the same periods of the previous fiscal year, respectively. The numbers of customers in the first half and second quarter were 100.8% and 101.2% in the same periods of the previous fiscal year, respectively, indicating healthy performance. Both exceeded the forecasts as a whole.
While closing stand-alone stores strategically, they renovated 32 existing stores under the two themes: “making BOOKOFF entertaining” and “strengthening the line-up of trading cards and hobby goods.”

◎ Products
In the first half of this fiscal year, the sales of all products, excluding software media, such as music, videos, and games, at existing stores increased year on year. In the second quarter (Sep. to Nov.), the sales of software media grew year on year.
The sales of books increased year on year for the 8th consecutive quarter. The sales quantity of publications in the primary market is declining, but sales grew thanks to the rise in unit price. The revisions to purchase and selling prices according to market prices turned out to be effective.
By continuously relocating and renovating stores, they started handling more trading cards and hobby goods. The performance of hobby goods, including anime goods, remains healthy. The performance of brand-new and used trading cards is favorable, thanks to the rise in market prices of Pokémon cards.
The sales of precious metals, watches, and brand-name bags increased from the previous year, due to the skyrocketing of market prices of precious metals, the continuous demand from foreign visitors to Japan, etc.
Regarding apparel, they have so far classified clothes roughly into underwear and outerwear for men and women, managing each category, but for high-priced products, they manage individual products, setting their prices in a meticulous manner and taking measures for slow-moving inventory. This leads to the procurement of more products and sales growth. This requires some labor, but produces merits offsetting it.
In the first half of this fiscal year, the sales from foreign visitors to Japan grew 31.2% year on year, showing good performance, and account for around 6.7% of sales of the BOOKOFF operations in Japan. Regarding the composition ratio of each product category, precious metals, watches, and brand-name bags account for 33%, the highest ratio, but the sum of composition ratios of trading cards/hobby goods and software media is 41%, up 7 points year on year.

(Domestic Directly Managed Stores, first half of FY 5/26 Trends by Product Category)

(2) Premium Services Business
Sales increased, but recorded an operating loss.

In the first half of this fiscal year, the amount of procured items rose 16.7% year on year. Accordingly, sales grew from the previous fiscal year. Despite the sales growth, they posted a loss as the rise in gross profit did not offset the augmentation of personnel expenses. In the first quarter (Jun. to Aug.), sales and profit declined, but in the second quarter (Sep. to Nov.), the amount of procured items increased as the market prices of precious metals rose steeply, increasing sales, so this business moved into the black.
They had to close 3 hugall shops due to the business strategies of department stores where the shops were operated, but they opened 3 new shops at nearby locations, and held events or the like more frequently, procuring a sufficient amount of products.
Since the purchase at the roadside store Rehello is sluggish due to the competitive environment, they plan to enhance their initiatives for popularizing the store. Regarding the cooperation with the alliance partners, which was stagnant due to the misconduct case, the procurement volume from the existing partners has recovered to the level before the misconduct case. Going forward, they will concentrate on the further increase of the volume and the finding of new partners.

(3) Overseas Business
Sales increased, but profit decreased.
The sales at “BOOKOFF” in the U.S. and “Jalan Jalan Japan” in Malaysia increased 24.6% and 7.9%, respectively, year on year, thanks to the opening of new stores and the opening of stores in past fiscal years. The business environment in Malaysia remains favorable, but as the number of stores increases, the training of local staff, including area managers and store managers, did not progress as assumed, so the sales at existing stores dropped, and there were expenses for opening new stores, so profit declined.

[2-3 Financial Condition and Cash Flow]

Financial Conditions

* Unit: million yen. Borrowings and interest-bearing debt include lease obligations.

They opened new stores and renovated stores in each business, and acquired some stores from affiliated enterprises in Japan. As a result, cash & deposits, accounts receivable, inventory assets, tangible fixed assets, etc. increased, and total assets rose 1.2 billion yen from the end of the previous fiscal year to 58.6 billion yen.
Total liabilities augmented 0.8 billion yen from the end of the previous fiscal year to 39.3 billion yen, due to the increase in interest-bearing liabilities, etc.
Net assets increased by 0.3 billion yen from the end of the previous fiscal year to 19.2 billion yen due to an increase in retained earnings, etc.
The equity ratio decreased by 0.2 points from the end of the previous fiscal year to 32.3%.

◎ Cash Flows (CF)

* Unit: million yen.

Operating CF increased year on year, as there were no longer expenses for special investigation, which were posted in the same period of the previous year
On the other hand, investment CF declined year on year, as the opening of stores in the BOOKOFF operations in Japan was delayed and conducted mainly in the second half.
The cash position was almost unchanged.

[2-4 Topics]

◎ Progress of the measures for preventing the recurrence of the misconduct case
In November 2024, they announced that they would develop an environment for preventing wrongdoing by tightening the preventive control as a measure for preventing the recurrence of the misconduct, enhancing the control (check) for discovering improper acts, and diffusing the stance of eradicating misconducts in the entire company. As of the end of the fiscal year ended May 2025, the top-priority measure for preventing the recurrence had been already finished. In the fiscal year ending May 2026, they worked on “the increase of security cameras” and “questionnaire surveys targeted at employees,” and keep engaging in “measures for preventing misconducts by refurbishing systems” and “measures for increasing the staff for operating stores.” They plan to complete all preventive measures in the fiscal year ending May 2026.

3. Fiscal Year ending May 2026 Financial Forecast

[3-1 Earning Forecasts]

* Unit: million yen.

The earnings forecast was left unchanged. Sales and profit are expected to grow, and all kinds of profits are projected to hit a record high.
The earnings forecast has been left unchanged. It is forecast that sales will increase 6.5% year on year to 127 billion yen, operating income will rise 10.2% year on year to 3.8 billion yen, and ordinary income will grow 2.5% year on year to 4 billion yen. All kinds of profits are projected to hit a record high. In the BOOKOFF operations in Japan, they will continue the investment in business for developing a sustainable system while implementing initiatives for preventing misconduct. The forecast dividend amount is 30.00 yen/share, up 5.00 yen/share from the previous fiscal year. The expected payout ratio is 23.9%.

[3-2　Assumptions and forecasts]

(1) BOOKOFF operations in Japan
The company plans to open 8-10 new stores, including those replacing existing ones, across the BOOKOFF, BOOKOFF PLUS, and BOOKOFF SUPER BAZAAR brands. In the first half of this fiscal year, they opened one store of BOOKOFF SUPER BAZAAR. There is a possibility that the total number of stores will slightly fall below the initial forecast, but they plan to open about 2 stores of BOOKOFF SUPER BAZAAR in the second half, so the total area of selling spaces is expected to expand.
In addition to opening new stores, they will continuously renovate existing stores for changing the selling zones of respective product categories in order to enhance the sale of trading cards and hobby goods and streamline the operation of the entire selling area. They plan to do so at 50-60 stores per year. Regarding “ASO-VIVA,” for which they did not open a new store in the fiscal year ended May 2025, they are discussing and adjusting the system for opening stores while considering the environment of trading cards.
The company anticipates that the ratio of sales at directly managed stores to those in the previous year will be 105% in the beginning of the period and full year, but due to the strong performance in the first half of the fiscal year, at 106.9%, the company expects the performance to be strong.
Sales are healthy mainly at existing stores, but the expected profit increase is only about 10 million yen, due to the augmentation of personnel expenses caused by the active opening of stores and the rise in minimum wages, the increase in software depreciation, the expenses for preventing the misconduct, etc.

(2) Premium Services Business
They plan to open a total of 10 new stores of hugall and aidect. In the first half of this fiscal year, they opened 3 stores of hugall, one store of aidect, for a total of 4 stores.
The recovery of procurement, etc. are expected to improve revenue at stores, but 3 stores of hugall were closed. Profit is projected to rise around 50 million yen.

(3) Overseas Business
They plan to open 12-13 new stores. In detail, they plan to open 4 directly managed stores in Malaysia, 5 directly managed stores in the U.S., and 3-4 franchised stores in Kazakhstan, etc. In the first half of this fiscal year, they opened 5 stores, including 3 directly managed stores in Malaysia, one directly managed store in the U.S., and one franchised store in Kazakhstan.
In the U.S., the company expects to open 3 stores in the second half of the fiscal year. As the sales at existing stores in Malaysia were stagnant in the previous fiscal year, they engage in the improvement of selling spaces for recovering the number of customers. Accordingly, the profit in this segment is projected to rise around 200 million yen.

(4) Other
Due to the shrinkage of the deficit in the cleanout service, operating income is expected to increase about 50 million yen after the posting of a loss of 259 million yen in the previous fiscal year.
In the fiscal year ending May 2025, they planned to open 4 stores of Japan TCG Center, but the actual number of opened stores was 2, because they were not able to find appropriate land lots for new stores. In order to launch a new business on a full-scale basis, it is indispensable to increase samples, so they are striving to open 4 stores without fail while reflecting on the performance in the previous fiscal year. Two new stores were opened in the first half of this fiscal year.

4. Mid-term Management Policy and its Progress

[4-1　Progress So Far and Business Environment]

The company started business as BOOKOFF CORPORATION LIMITED with purchase and sale of used books and had grown by proactively opening stores as well as expanding the product lineup since 2000, and it boosted profit by opening complex stores and larger stores even though there were only a few areas left where it could open stores.
Amid the expansion of e-commerce and customer-to-customer (CtoC) markets, however, the company did not generate sufficient earnings and ended up recording net loss in fiscal years 2016 to 2018.
In this context, the company is undergoing trial and error to restructure its business foundation by strengthening the collaboration between its e-commerce website, BOOKOFF Official Online Store, and its physical stores, launching a premium service for high-value items and establishing new BOOKOFF Purchasing Consultation Desk (Rehello) stores specialized in purchasing.
Although the COVID-19 pandemic affected the company’s performance, it has successfully built a business structure that can generate an ordinary income of 3 billion yen through re-strengthening of the BOOKOFF business in Japan, concentration on the premium services business and the overseas business, and development of new types of stores.
After a phase of major changes, it considers the current and succeeding terms to be a new phase of growth.

According to the company’s reference material (based on information by The Reuse Business Journal in 2023), the size of the Japanese reuse market increased from 1.1 trillion yen in 2009 to 2.9 trillion yen in 2022. The market scale is expected to expand further to reach 4.0 trillion yen in 2030.

[4-2 What we aim for]

The company aims to be a leading “reuse” company in the booming reuse market.
To do so, it will take such initiatives as development of an environment that allows customers of all ages and genders to get a good deal on buying and selling items with a sense of joy and safety, realization of a society that does not throw away things, popularization of reuse among people all over the world, and activities to encourage a greater number of people to reuse things.

By fulfilling the company’s business mission of “Be a source of an enjoyable and prosperous life for as many people as possible,” the company is aiming for the maximization of its enterprise value.
The company propels its businesses forward and pursues growth on the basis of the BOOKOFF Group’s universal value that consists of “activities linked to the corporate philosophy,” “employee training,” “consistency for many years of cash flows from existing businesses,” and “lower cost of capital.”
In addition, the company will continue to consider new business development and M&A based on the following policies: "it must be in line with the management philosophy and mission," "it must be able to leverage the strengths created by the BOOKOFF Group's business development," and "it must lead to new career development for employees working for the BOOKOFF Group.”

(Source: the Company’s material)

[4-3 Business Policy]

(1) Overview
Their medium-term management policy is to become the “BOOKOFF Group that is much more than just BOOKOFF,” a step ahead of the former objective “BOOKOFF that handles not only books,” or “transform the business portfolio,” because the company considers this is essential for realizing sustainable growth while striking a balance between exploration and exploitation in the growing market under the “Corporate Philosophies,” “MISSION,” and “VISION” mentioned in “1. Company Overview.”

(2) Categorization of Each Business
Categorizing the BOOKOFF operations in Japan into “Exploitation” and the premium services business, the overseas business, and the realm of business development into “Exploration,” the company will invest the profit, know-how, and human resources generated in the Exploitation category in the businesses categorized in Exploration.
While aiming to achieve a profit significantly exceeding the highest-ever profit recorded in the fiscal year ended May 2025 (an ordinary income of 3.9 billion yen) through profit growth in the category of Exploration, the company plans to improve its profit margin on a consolidated basis by increasing the profit composition ratio of the highly profitable business in the category of Exploitation.

The company faced difficulty, which is the recording of loss, in the BOOKOFF operations in Japan, but overcame the difficulty, and it got back on track and is growing on a steady basis.
Within this context, the company has captured, as it were, the essence of personnel training, such as fundamental management skills, communication techniques, methods of building teams and motivating employees.
It will apply the excellent know-how of personnel training to the businesses categorized as Exploration. Although this approach will be challenging in some part because of the differences in business models between the categories of Exploitation and Exploration, the company will endeavor to achieve considerable growth by utilizing the system of personnel training, which is one of its fortes, in the Exploration businesses.

(Source: the Company’s material)

(3) Policies and Initiatives for Each Business
① BOOKOFF operations in Japan
◎ Basic Policy
The company has pursued store expansion investments, merchandise diversification, and utilization of digital technologies to grow its BOOKOFF operations in Japan. As a result, sales have continued to rise steadily. The number of customers, which temporarily declined during the COVID-19 pandemic, has grown to the level significantly exceeding the pre-pandemic figure.
In this favorable environment, the basic policy for this business is “to provide customers with the best reuse experience,” and the company is committed to “expanding the variety of items in order to satisfy regional preferences with books being the core product” and “making BOOKOFF super-convenient and super-enjoyable.”
As the BOOKOFF Group’s core business, the company will improve capital efficiency while securing the current profit level, and continuously provide the personnel and know-how to the growing businesses.

◎ Progress Report

(Source: the Company’s material)

* To handle more kinds of products according to regional characteristics, while handling mainly books
They are enhancing the sale of products while handling a broader range of products.
Due to sluggish sales of new books, it is difficult for the sales of books and software media to achieve significant growth as the company's total sales increase. However, books are used by customers of all ages and genders, which means that they provide a broad customer base. Furthermore, gross margin for books is high. In the reuse industry, there are powerful category killers of each product category, such as apparel and brand-name goods. Therefore, books are strategically important core products when it comes to differentiation from other companies.
While maintaining the gross profit generated by books, the company aims to expand sales and profit by releasing products other than books and software media. Over the past five years, sales of products other than books and software media at directly managed stores have increased 43%, indicating that the entire business has grown vigorously. They will also concentrate on the investment in IT, in order to improve the value of experience of purchase and convenience, visualize inventory, and make it easier to find products each customer wants.

* Making BOOKOFF super-convenient and super-enjoyable
・Store Strategy
They will keep opening stores, mainly large-scale ones.
As they are closing small-sized stores and opening large-sized ones, the total number of stores decreased by 17 over five years—from 383 at the end of the fiscal year ended May 2020 to 366 at the end of the fiscal year ended May 2025. However, total sales floor area expanded from approximately 94,000 tsubo (≒ 310,200 m2) to approximately 98,000 tsubo (≒ 323,400 m2).
Along with the expansion of sales floor area, the variety and volume of products handled increased, and sales per tsubo rose by approximately 40% to about 900,000 yen during the same period.

(Source: the Company’s material)

Regarding store openings and closures, the company is primarily focusing on the strategic closure of smaller BOOKOFF stores with a sales floor area of less than 100 tsubo (330 m2), based on performance. Over the past two years, the average sales floor area for new stores opened has been 300 to 400 tsubo (990 to 1,320 m2), more than two to three times the average sales floor area of closed stores.
In particular, the 1,000-tsubo-scale “BOOKOFF SUPER BAZAAR,” capable of handling an overwhelming volume of merchandise and meeting a wide range of needs, holds a high profit share in this business. They plan to keep opening stores actively.

(Case 1)
The “BOOKOFF SUPER BAZAAR Kofu-kugawa Store” (Yamanashi Prefecture), opened in April 2024, replaced two existing BOOKOFF stores closed for this purpose.
As a result, they saw an increase in the number of local customers, the improvement in repeated use rate, and the expansion of the trade area. Comparing the nine-month period from June 2024 to February 2025 (two months after the new store opened) with the nine-month period from June 2023 to February 2024, regional sales increased by 39% and regional ordinary income increased by 17%.

(Case 2)
“BOOKOFF SUPER BAZAAR－Trial Isesaki-chuo Store” (Gunma Prefecture), which was opened in November 2025, is a large-sized store built through the strategic relocation of the existing store “BOOKOFF Isesaki-Kamiizumi Store.” As they strategically enlarged stores and increased the variety of products they handle, the annual sales per store of BOOKOFF grew significantly by 52% from 157 million yen to 239 million yen.

(Source: the Company’s material)

・Enhancing the experience of selling used goods and implementing various initiatives for attracting customers
They have prepared various systems in order to offer “an ease of selling goods” easily anywhere, anytime.
They promote customers to visit their stores by creating opportunities to sell items with systems, including “Cashless Purchase,” which notifies customers of the completion of appraisal via smartphones and enables customers to receive the purchase amount in a cashless manner, “Purchase Locker,” which operates 24 hours a day, 365 days a year, enabling customers to request purchase without waiting, “Reuse Sending Service,” which enables customers to bring used items to a convenience store or the like whenever they want and complete the procedure for dispatching the items for requesting purchase, and the function to retrieve purchase prices by using an app in advance.
Like this, they are improving convenience and increasing opportunities to reuse items, by offering a wide array of purchase services.

・Strengthening digital footholds
In order to improve their earning capacity, they are strengthening digital footholds by enriching online stores and apps.
In the first half of the fiscal year ending May 2026, the sales from the in-store pickup system, with which customers order products at the official online store of BOOKOFF and pick up the products by paying the prices at an actual store, increased significantly by 22% year on year, as the store handles over 4 million products and delivers even a single product for free, and users can pick up products whenever they want. One out of three customers visiting their store for “picking up products they have ordered at an actual store” purchases another product there. This supports their revenue. In this light, too, the enlargement of stores is expected to contribute to their revenue.

Customers using their own website accounted for about 70% of customers using EC sites (in the first half of the fiscal year ending May 2026). They aim to reel in a broad range of users, so they consider that the ratio 70% is appropriate.
52% of customers accessing their own website use their app. The number of app members was 9.87 million as of the end of November 2025. Over the past 5 years, the number of app subscribers has grown 5.5 times, and customers increasingly use a variety of services of BOOKOFF and their revenue is growing.
While continuously increasing the number of app subscribers, they will concentrate on the increase of monthly active users (MAUs) by offering high-quality experiences to customers through customer relationship management (CRM) measures for improving the loyalty of customers, the improvement of usability, etc.

・Development of new packages
They are developing new packages in order to earn revenues by utilizing a broad range of categories, including “ASO-VIVA,” a package focused on media, unstaffed bookstores, and the package for products to be reused other than books.

* IT Investment
The company is implementing various system reconstructions to enhance customer services, focusing on the app for users, improve efficiency in store and headquarters operations, and support systems such as store systems, the official website, and the official online store. For the fiscal year ended May 2025, the company installed a new store system in all directly managed and franchise stores. Additionally, the company prioritized system modifications to prevent the recurrence of fraudulent cases. Depreciation expenses for the fiscal year ending May 2026 are expected to increase further from the fiscal year ended May 2025.
As they improved the aspect of sale, they will focus on the improvement of convenience in purchase services.

② Premium Services Business
◎ Basic policy
Their basic policy is to promote reuse with diverse service brands targeting customer segments that cannot be reeled in by BOOKOFF.
In addition to opening new stores, it will not only retain a competitive edge by enhancing hospitality and responsiveness, but also expand its touch points with customers by implementing more proactive approaches, other than opening of new stores, through expansion of alliance partners, such as direct sales staff of department stores, real estate companies, and finance-related companies, with the aim of newly acquiring upper-class customers.
They aim to realize a 100-store structure.

◎ Progress Report

(Source: the Company’s material)

* Store Operations
Regarding the “goal of establishing a network of 100 stores,” the initial target was set for the fiscal year ending May 2028. However, considering the recent progress and the business environment, they are forecasting the timing of achieving that structure again. In the first half of the fiscal year ending May 2026, they refrained from opening a new shop of Purchasing Consultation Desks (Rehello), which is a comprehensive desk for purchasing used items, and concentrated on the improvement of service quality and earning capacity of each existing shop.
Regarding “hugall,” they closed 3 shops due to the expiration of contracts in department stores and opened 3 new shops, maintaining the same number of shops, in the first half of the fiscal year ending May 2026. They will continuously aim to grow steadily to realize a 100-store structure.
The brand concept of "Rehello" is to offer reliable purchase services to users who are not accustomed to selling used items and to realize a “place” where they can encounter something new.
They aim to improve the efficiency of sale by enhancing the linkage between real stores that can be casually visited by customers and the e-commerce website where customers can search for products easily. While selling high-priced clothes via the Internet in order to improve inventory turnover, they are planning to establish unstaffed stores for low-priced products.

* Redevelopment of the brand as “Rehello”
In order to promote reuse with various service brands targeting customer segments that cannot be reeled in by BOOKOFF, they changed the name “BOOKOFF Purchasing Consultation Desks” to “Rehello by BOOKOFF.”
They aim to increase the users of their service of purchasing used items, by bringing a sense of security, casualness, and additional value and offering services that can reassure users who are not accustomed at selling used items.

③ Overseas Business
◎ Basic Policy
The target total number of stores for the fiscal year ending May 2028 was originally set at 100: 30 stores in the United States and 70 Jalan Jalan Japan stores. However, Jalan Jalan Japan's target has been revised to 50, bringing the total target to 80.
By the fiscal year ending May 2033, both businesses aim to operate 100 stores each, with a total of 200 overseas stores.

◎ Progress Report
*The United States

(Source: the Company’s material)

It aims to open 30 stores by the fiscal year ending May 2028 and 100 stores by the fiscal year ending May 2033.
While continuing the strategy of opening stores in the east and west coasts so as to dominate the regions, they made inroads into inland megacities in the fiscal year ending May 2026. Following Texas in December 2025, they plan to open a store in Michigan.
In addition to the standard type similar to BOOKOFF stores within Japan, the company is developing stores specializing in anime products, in response to the popularity of Japanese anime.
By product category, hobby items, anime, and trading cards are showing significant growth, while books and software media are also steadily increasing. The U.S. book publishing market had been in a downtrend for a long time, but the COVID-19 pandemic triggered a trend reversal, and growth has continued. In this environment, BOOKOFF USA's used book sales are growing even at existing stores. In addition to growth in the primary market, rising unit prices have also contributed to an increase in book sales, driving more customers to stores, like in Japan.
In order to expand the market and streamline store operation, they will train store managers from local areas and establish a system for independently opening a store in each region. In order to keep opening stores to increase the number of stores to 100, it is necessary to secure real estate in the major cities and throughout the U.S., so they are conducting surveys more actively.
For developing stores and selling products, they will revise the rules for display, promote the creation of efficient selling spaces, update store equipment, such as product description tools for enhancing the effect of sales promotion, revise the methods for selling anime goods, approach new customers, and integrate systems for purchase and appraisal.
In the U.S., they mainly purchase and sell used items there, so the impact of tariffs is minor.

◎ Jalan Jalan Japan

(Source: the Company’s material)

The company plans to increase the number of stores to 50 by the fiscal year ending May 2028 and to 100 by the fiscal year ending May 2033.
They first planned to increase the number of stores to 70 by fiscal year ending May 2028, but in Kazakhstan, where they established a joint-venture company in April 2024, they cancelled the joint venture contract in July 2025, in order to accelerate the opening of stores through more flexible, swift decision making, transferred their stake. Accordingly, they downwardly revised their plan, and currently aim to achieve “50 stores in the fiscal year ending May 2028.”
In Malaysia, they have already opened 3 stores in the fiscal year ending May 2026, as planned. The current number of stores is 17 for directly managed stores and 2 for franchised ones, so the total number is 19.
By the end of the fiscal year ending May 2026, they plan to open a new store in a new country in Southeast Asia, following the U.S. and Malaysia. They are planning while considering the import regulations and reuse business situation in each country.

④ Business Development Domain
* Stores Specializing in Trading Cards
The company will begin to proactively open stores of “Japan TCG Center” primarily in Tokyo, Nagoya, Osaka, and ordinance-designated cities and operate franchise business.
It aims to increase the BOOKOFF Group’s market share and monetize the business by handling various brands in the growing trading card market.
The company plans to open four new stores in the fiscal year ending May 2026. Two stores were opened in the first half of the fiscal year. The company plans to operate about ten stores over the medium term while monitoring efficiency and profitability.

* CD Plastics Recycling Business
The company will take on a challenge of launching a business through which it not only reduces waste, but also encourages people all over the world to realize the high value it puts using its creativity.

* Cleanout Business
The company plans to increase the number of partner companies so that it can cover wider areas to offer the service in other regions than Tokyo and neighboring three prefectures.
It intends to fulfil customers’ expectations by reducing waste as much as possible, curtailing disposal cost, and subtracting the buying amount from the cleanout fee.

* Exploration of New Businesses
The company continues to consider developing new businesses and conducting mergers and acquisitions on the basis of its policies that businesses should “help the BOOKOFF Group follow the corporate philosophies and mission,” “allow the BOOKOFF Group to take advantage of the strengths produced through its business operations,” and “allow the BOOKOFF Group’s employees to carve out new careers.” Regarding M&A, they do not merely target the companies in the same industry and peripheral fields, but also plan to conduct M&A from a new perspective by utilizing their own resources.

(4) Initiatives for reuse and recycling for reducing the disposal of products in Japan
① Measures utilizing the reuse and recycling functions
They are enhancing the capability of supplying goods to Jalan Jalan Japan, which aims to open more stores, and developing a system for realizing “a society where nothing is discarded.”
The disused goods collected through not only the BOOKOFF chain, but also the cooperation with other companies and local governments, the cleanup business in the business development field, etc. are sorted into reusable products, recyclable goods, and items to be discarded at six R Yards in Japan, and reusable products are sent to Malaysia and Kazakhstan. Regarding recyclable goods, books are recycled into paper, apparel is recycled into rags (which are used for wiping off grease and dirt from machinery at factories or the like) and fibers (recycled cotton-like materials produced by unraveling disused textile goods, such as used clothes, thread waste, and cloth fragments, by using dedicated equipment), and software media are recycled into CD Plastics, which are recycled plastics. “CD Plastics” are plastics recycled from CDs and DVDs with BOOKOFF’s own technology. Instead of discarding goods, they sell the materials to makers and others, offering new value.
The company is also considering expanding R-Yard facilities, primarily in the Kanto region.

(Source: the Company’s material)

② Activities for making reuse familiar
◎R-LOOP
BOOKOFF GROUP HOLDINGS leads the operation of R-LOOP, a new platform for recycling resources by collecting clothes and miscellaneous goods that are no longer used by consumers, in cooperation with BPLab inc. (Minato-ku, Tokyo).
Unwanted clothing and miscellaneous goods are collected at various collection spots, such as office corners. Clothing and miscellaneous goods still in usable condition are resold through Jalan Jalan Japan, while unusable items are recycled and remanufactured by BPLab Co., Ltd. The BOOKOFF Group bears responsibility for R-LOOP's operating costs, including the setup fees for collection points. Since this is not a purchase program, it allows for zero purchase costs while expanding the volume of goods available for Jalan Jalan Japan (R-LOOP operating costs constitute the cost of goods sold).
As of the end of November 2025, there were 320 spots for collecting used items and about 37 tons were collected. Such spots exist also in 142 BOOKOFF stores, which handle mainly books and software media. Customers can leave their used clothes and miscellaneous goods, which are not purchased by an ordinary BOOKOFF store, in a collection box at the store. This will help realize a society in which people do not need to discard goods. They are proceeding with the cooperation with local governments. They have so far concluded agreements with Sagamihara City, Kanagawa Prefecture; Sumida City, Tokyo; Noshiro City, Akita Prefecture; and Sendai City, Miyagi Prefecture.

(Source: the Company’s material)

◎ August 8 –Reuse Day
In order to enhance people’s awareness of reuse and the recycling society and increase the users of reused goods through Reuse Day, they held an experience-based event for elementary school pupils and their parents/guardians in Akihabara for two days (Aug. 8 and 9, 2025), while enlisting a backup from the Ministry of the Environment and support from 26 companies, while 6 enterprises offering reuse services, including BOOKOFF, served as the members of the executive committee.
The 6 reuse enterprises set up their respective booths, and over 90% of participants deepened their understanding of reuse through experiences so that they could utilize reused goods in daily life. They aim to help realize a recycling society by forming a positive impression of reuse through event targeted at elementary school pupils, who will lead the future recycling economy, and their parents/guardians. In the questionnaire targeted at participants, over 90% of respondents answered that they deepened their understanding, as 51.7% chose “Their understanding deepened significantly” and 41.7% chose “Their understanding deepened.” Regarding the intention to use reused goods in daily life, participants highly evaluated reused goods, as 58.3% chose “I want to use them very much” and 39.1% chose “I want to use them.” BOOKOFF plans to hold this event again in 2026, as many enterprises expressed their intention to participate and the participants commented that they would like to participate in the next event, too.

◎ SustainaBook Project
Since April 2018, they have been donating used books, in order to provide children with opportunities to read books by utilizing books that were not sold in a certain period of time and books they got from customers because their appraisal prices were zero. In 2023, they started “SustainaBook Project,” in which they donate used books worth the donation amount calculated from the number of books purchased from customers at subject stores during the project period to facilities for children in need, for the purpose of eliminating the disparity in reading opportunities between regions. The subject regions are the prefectures where the number of libraries falls below the national average. By extending the lifespan of each book read by the first owner, it is possible to reduce waste, and anyone can contribute to society in a casual manner by using a BOOKOFF store through this project.

[4-4 Numerical Goals]

◎ Revenue Expansion
They are aiming to achieve “sales of 135 billion yen and an ordinary income of 5 billion yen” in the fiscal year ending May 2028.
By steadily generating revenue from core business areas and accelerating profit growth in high-profitability exploration areas to increase their contribution to overall profits, the company aims to significantly exceed its previous record-high ordinary income of 3.9 billion yen in the fiscal year ended May 2025 and improve its consolidated profit margin.

◎ Financial policy and initiatives for realizing business administration conscious of capital cost
They recognize that the weighted average cost of capital for their treasury shares is around 9.0%, and aim to achieve an ROA of 9.0% or higher in the fiscal year ending May 2028.
Currently, the share of profit of the BOOKOFF operations in Japan, which is categorized in Exploitation, is high, so they will concentrate on the increase in profit in the premium service business, the overseas business, and other businesses, which are categorized in Exploration. They will invest in more profitable businesses by strategically closing stores and enlarging stores based on business performance to improve the efficiency of capital management.
*The company has traditionally used ordinary income as a key performance indicator (KPI) for its business segments, so it adopts an ROA that uses ordinary income, which has taken deep root in the company’s business segments, as a key goal indicator (KGI). Furthermore, its ROA and Return on Invested Capital (ROIC) are almost the same because it holds relatively small surplus assets.

(Source: the Company’s material)

5. Message from President Horiuchi

Our company aims to achieve sales of 135 billion yen and an ordinary income of 5 billion yen in the fiscal year ending May 2028. In the first half of this fiscal year, we reached the half-way point, and our initiatives have progressed steadily.
The premium service business is inevitably struggling to some degree, but the implementation of strategies for this business from the viewpoint of reeling in a broader range of customers would contribute to our future business. Accordingly, we would like to realize a 100-store structure through various improvements as soon as possible.
For the fiscal year ending May 2026, we aim to achieve an ordinary income of 4 billion yen, but our final target is 5 billion yen, so the important theme for the following fiscal years is the monetization of our reuse specialty shops and cleanout service in which we are currently investing.
Our core business is performing well, and we plan to launch new businesses speedily, so we hope that shareholders and investors will have expectations for them. We would appreciate your continued support.

6. Conclusions

The progress rate toward the full-year forecast as of the end of the first half was 48.1% for sales and 36.4% for ordinary income. These are almost as usual like in the first quarter. The procurement in the premium service business is recovering, but this is attributable to mainly precious metals, whose profit margins are low, so its contribution to profit seems to be minor. In Malaysia, it is taking some time to improve the sales at existing stores, so we would like to expect the recovery this fiscal year. On the other hand, the sales at existing stores in the BOOKOFF operations in Japan, which is the mainstay, remain healthy, and enlarged stores have increased steadily, improving productivity. We would like to pay attention to how much they can make progress toward “an ordinary income of 4 billion yen,” which is the goal for this fiscal year.

<Reference: Corporate Governance>

◎ Organization type, and the composition of directors and auditors

◎ Corporate Governance Report：Updated on August 25, 2025
Basic policy
Under the BOOKOFF GROUP HOLDINGS Limited, which is a pure holding company, the Group’s common corporate philosophy is “Contributing to the economic and social development through our corporate activities” and “Providing opportunities for fulfillment both professionally and personally to all our dedicated employees” and the basic principles of our corporate governance are “ensuring transparency and efficiency of management,” “rapid decision-making,” and “enhancing accountability.” Based on these principles, we will establish good relationships with our stakeholders, including shareholders, customers, employees, business partners, and local communities, and establish a system to make transparent, fair, prompt, and decisive decision-making. We aim to achieve sustainable growth and increase corporate value over the medium to long term.

The basic policies on each principle of the Corporate Governance Code are disclosed in “Our Company’s Commitment to the Corporate Governance Code.”
■ Our Company’s Commitment to the Corporate Governance Code
https://www.bookoffgroup.co.jp/sustainability/top/governance/

<Reasons for Non-compliance with the Principles of the Corporate Governance Code (Excerpts)>
[Principle 1-4]
The company stipulates policy not to acquire cross-holding shares in principle. However, as an exception, it may hold shares of its franchise chain member companies. In our company, the board of directors examines the shares we hold, and individually discusses the meanings of strategically held shares.
(Items to be discussed)
*Qualitative items
・Background for acquisition of the shares
・Whether or not our company has transactions with each issuing company
・Meanings of shareholding
・Business potential
・Risks in the case of not holding the shares
・Merits and demerits in the case of continuous shareholding
*Quantitative items
・Dividend amount received per year
・Profit or loss from valuation of the shares
Regarding the exercise of voting rights, we scrutinize each proposal, check the performance, financial standing, etc. of each issuing company in the past 3 years, hold dialogues with companies if necessary, judge whether or not each proposal contributes to the improvement in shareholder value, and then exercise voting rights appropriately.

<Disclosure Based on the Principles of the Corporate Governance Code (Excerpts)>
[Supplementary Principle 2-4①]
Our corporate group set a policy for developing human resources while securing diversity, a policy for establishing an in-company environment, and goals, and discloses their progress in our website, etc.
■ Diversity Policy, (goals, action plans, and their statuses)
https://www.bookoffgroup.co.jp/sustainability/top/society/diversity-equityand-inclusion/

[Supplementary Principle 3-1③]
Our sustainability initiatives and investments in human capital and intellectual properties are explained and disclosed in Financial Results Presentation material upon disclosure of our group’s management strategy. Also, we disclose the impact of our business activities on climate change on our website based on the TCFD (Task Force on Climate-related Financial Disclosures), an internationally established disclosure framework.
■Tackling Climate Change (TCFD)
https://www.bookoffgroup.co.jp/sustainability/top/bookoff-group-esg-management/#seven

[Principle 5-1]
The company appoints an executive in charge of IR and designates the Group Strategic Planning Department as in charge of IR. For shareholders and investors, the company holds financial results briefings once in six months, and is conducting small meetings and individual interviews as needed. In addition, the company has established the IR policy and disclosed it on its website.
■IR Policy <Policy to promote constructive dialogue with shareholders>
https://www.bookoffgroup.co.jp/investor_relations/top/ir-policy/

[Actions to achieve business administration conscious of cost of capital and share price][Also available in English]
Regarding business administration conscious of capital cost and share price, the company has articulated in its "Mid-Term Management Plan" its financial policy of recognizing capital costs and improving capital returns, aiming for a transformation in its business portfolio. The plan includes specific explanations of mid-term action plans for each business segment.
For details, please refer to the "Mid-Term Management Plan" page of the financial results for the fiscal year ended May 2025.
　■ Financial Results for the Fiscal Year Ended May 31, 2025
https://ssl4.eir-parts.net/doc/9278/tdnet/2653363/00.pdf

For back numbers of Bridge Reports on BOOKOFF GROUP HOLDINGS LIMITED（9278） and Bridge Salon (IR seminar), please go to our website at the following URL. www.bridge-salon.jp/