Istyle : Summary of Financial Results for the 3rd Quarter, FY2023

* Notes

1. Changes in significant subsidiaries during the period (changes in the scope of consolidation): None
2. Application of special accounting methods for presenting quarterly consolidated financial statements: None
3. Changes in accounting policies and accounting-based estimates, and restatements

1. Changes in accounting policies due to revisions in accounting standards, others: Yes

1. Number of shares outstanding (common shares)

1. Number of shares issued (including treasury shares) at end of period

• The current quarterly summary report is not subject to the quarterly review procedures by certified public accountants auditing corporations.
• Cautionary statement with respect to forecasts and other matters

(Note concerning forward-looking statements) · Earnings forecasts and other forward-looking statements in this report are based on assumptions judged to be valid and information available to the Company at the time of this report's preparation. Actual performance may differ significantly from these forecasts for a number of reasons. For the assumptions underlying the forecasts herein and other notice on the use of earnings forecasts, please refer to "1. Operating Results and Financial Position (3) Consolidated Operating Results Forecast and Information about Future Predictions" on page 4 in the accompanying material.

Accompanying Materials - Contents

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1. Operating Results and Financial Position

(1) Analysis of Operating Results

The business outlook in the cosmetics industry remains uncertain given the impact of COVID-19, which resulted in reduced consumer willingness to make purchases, fewer opportunities to wear cosmetics as consumers refrained from outings to prevent the spread of the virus, and the disappearance of demand from overseas visitors to Japan. However, the domestic cosmetics market started to show signs of recovery, reflecting a gradual decline in the impact of COVID-19 with mask-wearing no longer mandatory and tourism-related demand trending toward a recovery. We expect that this will contribute to a recovery in the performance of the istyle Group's client cosmetics brands.

The istyle Group will leverage the retail sales and sales promotion capabilities of our Beauty Service segment, which provides retail services such as EC and retail stores in Japan, not only to increase sales in this business but also to contribute to the performance of our client cosmetics brands. We will form a virtuous cycle by increasing advertising placement in our media, utilization of our solution services, and use of our EC and in-store sales promotion services, which will also lead to sustainable growth of the On Platform business. With these efforts, we will continue to focus on growing the On Platform and Beauty Service segments, which are our earnings pillars, with the goal of further boosting earnings and turning profitable for the full year at the operating income level.

The consolidated operating performance for the first nine months ended March 31, 2023 was as follows.

Net sales increased 21.5% despite the lingering impact of COVID-19. The Beauty Service segment achieved double-digit growth year on year in both in-store and online sales. In addition, the On Platform segment grew, thanks to a rise in demand for brand campaigns including sales promotion services, which also contributed to higher sales.

Operating income increased 1,128 million yen year on year to return to profitability due to the aforementioned increased sales in the Beauty Service segment and the On Platform segment.

As a result, the consolidated operating performance for the first nine months ended March 31, 2023 was as follows:

Income before income taxes: 187 million yen (681 million yen loss in the previous fiscal year) Net loss attributable to owners of the parent company:

20 million yen (620 million yen loss in the previous fiscal year)

1) On Platform segment

The On Platform segment comprises services based on the beauty portal site @cosme, including B-to-B services and B-to-C services.

Although the business environment remained difficult during the first nine months under review as clients continued to tighten their budgets in response to the pandemic, sales rose year on year, reflecting growth in brand campaigns including sales promotion services, driven by growth in the Beauty Service segment.

Operating income increased, reflecting an increase in net sales.

As a result, the consolidated operating performance for the first nine months ended March 31, 2023 was as follows:

Net sales:5,838 million yen (5,445 million yen in the previous fiscal year; 7.2% year-on-year increase)

Operating income: 1,045 million yen (637 million yen in the previous fiscal year; 63.9% year-on-year increase)

2) Beauty Service segment

The Beauty Service segment comprises mainly retail services in Japan, such as the operation of the domestic E-Commerce site @cosme SHOPPING and cosmetics specialty shops including @cosme STORE and the large flagship store @cosme

TOKYO.

The Beauty Service segment's EC sales were up 11.9% year on year, sustaining its double-digit EC sales growth, with a special event achieving record-high gross merchandise value, new customers acquired through EC events becoming users, and

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ongoing measures to enhance merchandizing proving successful. The segment's store sales grew 45.3% year on year, due to a sharp recovery in the movement of people and increased customer traffic thanks to sales promotion events as part of brand campaigns integrating online and offline marketing. In addition, the large flagship store not only drove sales, but it also contributed to the operating performance of the On Platform segment as the basis for the announcement of a range of information by holding brand-related events while also planning and implementing content with influencers.

Operating income increased 803 million yen and remained positive thanks to growth in in-store sales, despite the posting of promotion-related expenses in conjunction with the holding of the special online event.

As a result, the consolidated operating performance for the first nine months ended March 31, 2023 was as follows:

Net sales:20,897 million yen (15,984 million yen in previous fiscal year: 30.7% year-on-year increase)

Operating income: 884 million yen (81 million yen in the previous fiscal year; 992.2% year-on-year increase)

3) Global segment

The Global segment comprises business operations outside Japan, such as E-Commerce & Wholesale, retail stores, and media and other services.

EC & Wholesale sales were down year on year as the cross-border EC business in China contended with lackluster consumption and logistics slowdown due to a resurgence of OVID-19 cases in China. We had closed down three of the stores operated in Hong Kong due to unprofitability in the previous fiscal year. However, given a solid recovery recorded by the remaining three stores, total sales of the Global segment, despite a year-on-year decline, recorded an increase on a quarterly basis.

The segment registered an operating loss due to a poor business performance in Korea, despite efforts made to improve the earnings structure through the liquidation of or withdrawal from unprofitable businesses.

As a result, the consolidated operating performance for the first nine months ended March 31, 2023 was as follows:

4) Others

The Others segment consists of a temporary staffing agency for beauty consultants and salespersons, and investment and consulting projects for companies in various stages of development, including new startups.

Temporary staffing agency sales were up year on year due to efforts to expand and enhance the operational workforce and the gradual waning of the impact of COVID-19.

Operating income was temporarily in the red due to upfront personnel expenses for the temporary staffing agency's workforce expansion and enhancement, but the segment as a whole achieved profitability due to a gain on sales of operational investment securities.

As a result, the consolidated operating performance for the first nine months ended March 31, 2023 was as follows:

Net sales:994 million yen (685 million yen in the previous fiscal year; 45.1% year-on-year increase)

Operating income: 9 million yen (18 million yen in the previous fiscal year; 52.0% year-on-year decrease)

(2) Consolidated Financial Position

(Assets)

Total assets as of March 31, 2023 were 23,822 million yen, an increase of 1,654 million yen from the end of the previous fiscal year.

Current assets as of March 31, 2023 totaled 14,733 million yen, an increase of 1,806 million yen from the end of the previous fiscal year. This was mainly due to increases of 721 million yen in cash and deposits; 617 million yen in notes and accounts receivable - trade and contract assets; and 648 million yen in merchandise.

Fixed assets as of March 31, 2023 totaled 9,089 million yen, a decrease of 152 million yen from the end of the previous fiscal

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