Tokyo Lifestyle Co., Ltd. Reviews Fiscal Year 2026 Financial Results

TOKYO, July 10, 2026 /PRNewswire/ — Tokyo Lifestyle Co., Ltd. (“Tokyo Lifestyle” or the “Company”) (Nasdaq: TKLF), a retailer and wholesaler of Japanese health and beauty merchandise, sundry merchandise, luxurious merchandise, digital merchandise, collectible playing cards, stylish toys in addition to different merchandise in Hong Kong, Japan, North America, Thailand, Vietnam, the United Kingdom and Australia, immediately introduced its monetary outcomes for the fiscal yr ended March 31, 2026 (“fiscal year 2026”).

Mr. Mei Kanayama, Principal Executive Officer of Tokyo Lifestyle, commented: “Fiscal yr 2026 was a yr of sturdy execution throughout our enterprise, leading to sturdy income progress pushed by continued enlargement of our directly-operated shops, franchise community, and wholesale operations, all of which achieved double-digit progress. We imagine that these outcomes exhibit the effectiveness of our technique to diversify our product portfolio, broaden our buyer base, and speed up our world market enlargement. Tokyo Lifestyle is evolving past a conventional retailer right into a diversified shopper life-style platform with complementary retail, franchise, wholesale, and luxurious items companies, pursuing a number of drivers for sustainable long-term progress.

“As a part of this transformation, we continued to advance our asset-light progress technique by accelerating the enlargement of our franchise and wholesale companies, notably within the high-end merchandise phase. While these companies usually carry decrease gross margins than our directly-operated retail operations, they require considerably much less capital funding and working bills, enabling quicker, extra environment friendly scaling. Accordingly, the modifications in our income combine needs to be seen as a deliberate optimization of our enterprise mannequin designed to boost long-term returns, somewhat than a mirrored image of weaker working efficiency.

“A key spotlight was the excellent efficiency of our luxurious items enterprise, which rapidly emerged as a significant progress driver. At the identical time, continued enlargement of our wholesale buyer base and broader distribution community strengthened market attain, diversified our income streams, and enhanced the resilience of our enterprise.

“Our whole belongings elevated by 48% throughout fiscal yr 2026 whereas we remained worthwhile for the third consecutive yr, reflecting our continued enterprise enlargement and rising market presence.

“We additionally continued strengthening our worldwide platform by increasing our worldwide presence. During the yr, we opened new shops in Hong Kong and Australia, expanded strategic partnerships, and continued investing in native expertise and performance-based incentive packages. These initiatives additional strengthen our organizational capabilities to help continued world enlargement effectively.

“In addition, we continued optimizing our omnichannel retail community by changing chosen underperforming directly-operated shops into franchise areas operated by skilled native companions.

“Looking ahead, we remain focused on executing our long-term growth strategy through continued customer acquisition, broader global brand recognition, an increasingly diversified product portfolio, and deeper customer engagement.”

Mr. Youichiro Haga, Principal Accounting and Financial Officer of Tokyo Lifestyle, remarked: “We are happy to report a 77.6% year-over-year enhance in income, and extra importantly, this sturdy progress was achieved together with disciplined price administration. Although we continued investing in advertising, model growth, and world enlargement initiatives, working bills grew at a considerably slower tempo than income — 29.6% versus 77.6% — lowering working bills as a share of income from 9.1% to six.7%. This demonstrates the scalability of our working mannequin and our means to generate growing working leverage because the enterprise expands.

“Specifically, throughout the fiscal yr, income from our directly-operated bodily shops elevated by 15.7%, demonstrating the resilience of our core retail enterprise, whereas franchise and wholesale income grew by 86.9%, pushed primarily by greater than 320% progress in our luxurious items enterprise and the addition of 68 new wholesale prospects. This balanced progress throughout each retail and asset-light channels underscores the growing diversification and scalability of our enterprise.

“Accounts receivable elevated by 74.1% yr over yr, broadly according to our income progress. This primarily displays the speedy enlargement of our wholesale and franchise companies, along with the continued progress of our worldwide distribution community. Although increased accounts receivable and elevated working capital necessities quickly affected money balances and working money stream, we view these modifications as a pure consequence of the continued speedy progress somewhat than a deterioration in earnings high quality or monetary fundamentals.

“Beyond income progress, we delivered significant enhancements in profitability. Gross revenue from directly-operated bodily shops and on-line enterprise every elevated by over 20%, supported by improved gross margins ensuing from a extra optimized product combine and disciplined stock administration. Gross revenue from franchise and wholesale enterprise additionally elevated by 15.5%. While this phase carries a relatively decrease gross margin, it requires considerably decrease working prices and capital funding, additional enhancing the effectivity, scalability, and returns of our total enterprise mannequin. As a results of the modifications in our enterprise construction, notably the elevated proportion of wholesale and luxurious items, our gross revenue elevated by 17.5% with a average decline in gross margin. Despite a restricted short-term impression on working revenue, we imagine the prevailing technique will enhance capital effectivity, speed up market enlargement, strengthen our digital capabilities, and additional improve the pliability and scalability of our enterprise mannequin over the long run.

“Our worldwide enlargement additionally continued to achieve momentum, with abroad gross sales accounting for 47.1% of whole income. This was supported by growing contributions from Hong Kong and different abroad markets, together with continued enlargement of our world retail footprint. We imagine our rising worldwide presence will additional strengthen model recognition, diversify income base, and create extra long-term progress alternatives.

“Overall, fiscal yr 2026 outcomes exhibit the resilience, scalability, and monetary high quality of our enterprise mannequin. While reported internet revenue and earnings per share declined yr over yr, this was primarily attributable to tax-related components somewhat than modifications in our underlying working efficiency. Excluding these things, our core enterprise continued to ship strong working efficiency, supported by sturdy income progress, wholesome buyer demand, and disciplined execution.

“As macroeconomic conditions continue to improve with recovering consumer demand across our key markets, we remain confident in our ability to generate sustainable, profitable growth through disciplined capital allocation, prudent financial management, and continued operational excellence.”

Fiscal Year 2026 Financial Summary

• Total income was $373.2 million for fiscal yr 2026, which elevated by 77.6% from $210.1 million for the fiscal yr ended March 31, 2025 (“fiscal year 2025”).
• Gross revenue was $28.1 million for fiscal yr 2026, which elevated by 17.5% from $23.9 million for fiscal yr 2025.
• Income from operations was $3.2 million for fiscal yr 2026, in comparison with $4.7 million for fiscal yr 2025.
• Net revenue decreased to $0.7 million for fiscal yr 2026, in comparison with $6.6 million for fiscal yr 2025.
• Net money supplied by investing actions elevated to $6.1 million for fiscal yr 2026, from internet money utilized in investing actions of $1.0 million for fiscal yr 2025.
• Basic earnings per share was $0.02 for fiscal yr 2026. Diluted earnings per share was $0.02 for fiscal yr 2026.

Fiscal Year 2026 Financial Results

Revenue

Revenue elevated by 77.6%, to $373.2 million for fiscal yr 2026, from $210.1 million for fiscal yr 2025. The enhance within the Company’s income consisted of elevated income from directly-operated bodily shops and franchise shops and wholesale prospects, which was partially offset by the decreased income from on-line shops and providers. Revenue generated from corporations positioned in Japan accounted for 52.9% and 70.5% of the Company’s whole income for fiscal years 2026 and 2025, respectively. Revenue generated from corporations positioned in Hong Kong and others accounted for 47.1% and 29.5% of the Company’s whole income for fiscal years 2026 and 2025, respectively.

Revenue denominated in Japanese Yen elevated by 75.7%, to ¥56,134.8 million for fiscal yr 2026, from ¥31,952.8 million for fiscal yr 2025. The enhance was primarily attributable to elevated income from franchise shops and wholesale prospects by 84.9%, to ¥52,170.1 million for fiscal yr 2026, from ¥28,215.6 million for fiscal yr 2025, in addition to elevated income from directly-operated bodily shops by 14.2%, to ¥2,965.5 million for fiscal yr 2026, from ¥2,597.6 million for fiscal yr 2025. The enhance was partially offset by the decreased income from on-line shops and providers by 12.3%, to ¥999.3 million for fiscal yr 2026, from ¥1,139.6 million for fiscal yr 2025.

Note: Amounts could not sum attributable to rounding.

Revenue from directly-operated bodily shops elevated by 15.7%, to $19.8 million for fiscal yr 2026, from $17.1 million for fiscal yr 2025. The enhance was primarily attributable to elevated income generated from the Company’s current directly-operated bodily shops in Hong Kong on account of their full-year operations, in addition to the opening of two new bodily shops in Hong Kong throughout fiscal yr 2026. In addition, the Company supplied promotion actions and worth reductions, which attracted extra prospects to make purchases on the Company’s bodily shops, and income from the Company’s current bodily shops in Hong Kong additionally elevated in fiscal yr 2026, in comparison with the prior yr. The above-mentioned enhance was partially offset by a lower in income from directly-operated bodily shops in Japan, ensuing from the closure of 1 bodily retailer and the transformation of one other bodily retailer throughout fiscal yr 2026. The Company proactively optimized its retailer construction and transformed this underperforming bodily retailer in Japan right into a franchise retailer, so as to enhance the Company’s money stream and dealing capital. Following the change, the shop started buying merchandise from the Company like different franchise shops, and accordingly, the associated income was recorded underneath franchise shops and wholesale prospects.

Revenue from on-line shops and providers decreased by 10.7%, to $6.7 million for fiscal yr 2026, from $7.5 million for fiscal yr 2025. The lower was primarily attributable to a discount within the variety of on-line shops, because the Company closed sure underperforming on-line shops to enhance the Company’s profitability. The lower was partially offset by a rise in income from providers, which resulted from new prospects that the Company developed.

Revenue from franchise shops and wholesale prospects elevated by 86.9%, to $346.7 million for fiscal yr 2026, from $185.5 million for fiscal yr 2025. The enhance was primarily because of the substantial progress in income from gross sales of luxurious merchandise. During fiscal yr 2026, the Company efficiently achieved a strategic enlargement that greater than doubled income from franchise shops and wholesale prospects and meaningfully expanded the Company’s market share. This deliberate technique strengthens the Company’s wholesale platform and provider relationships. In addition, there was elevated income from the brand new wholesale prospects because the Company continued to increase the Company’s buyer base by getting into into enterprise relationships with new wholesale prospects throughout fiscal yr 2026.

Cost of Revenue

Total price of income elevated by 85.3%, to $345.1 million for fiscal yr 2026, from $186.2 million for fiscal yr 2025.

Gross Profit and Gross Margin

Gross revenue elevated by 17.5%, to $28.1 million for fiscal yr 2026, from $23.9 million for fiscal yr 2025. The enhance was primarily attributable to the general enhance in income.

Gross margin decreased by 3.9 share factors to 7.5% for fiscal yr 2026, from 11.4% for fiscal yr 2025. The lower in total gross margin was primarily attributable to shifts within the Company’s income combine, as income from franchise shops and wholesale prospects, which carry comparatively decrease gross margins, accounted for a considerably bigger proportion of whole income throughout fiscal yr 2026.

Operating Expenses

Operating bills include promoting and advertising bills and common and administrative bills, which primarily embrace payroll, worker profit bills and bonus bills, delivery bills, promotion and promoting bills, and different facility-related prices, comparable to retailer lease, utilities, and depreciation.

Operating bills elevated by 29.6%, to $24.9 million for fiscal yr 2026, from $19.2 million for fiscal yr 2025. Operating bills as a share of whole income improved to six.7% for fiscal yr 2026 from 9.1% for fiscal yr 2025. This 2.4 share factors decline displays early working leverage throughout the Company’s enterprise, because the Company’s income scaled quicker than the Company’s working price base. The enhance in working bills was primarily attributable to the next components:

1. a rise in different bills by 46.4%, to $8.4 million for fiscal yr 2026, from $5.7 million for fiscal yr 2025. The enhance was primarily attributable to increased delivery bills and different prices ensuing from the expansion within the scale of the Company’s operations;
2. a rise in provision for credit score losses by 515.4%, to a provision for credit score losses of $0.9 million for fiscal yr 2026, from a internet restoration of credit score losses of $0.2 million for fiscal yr 2025. The enhance within the provision for credit score losses was primarily because of the vital enhance in income and accounts receivable from franchise shops and wholesale prospects, which resulted in a bigger provision for credit score losses throughout fiscal yr 2026;
3. a rise in payroll, worker profit bills, and bonus bills by 13.1%, to $7.4 million for fiscal yr 2026, from $6.5 million for fiscal yr 2025. The enhance was primarily because of the elevated headcount attributable to the enlargement of the Company’s enterprise operations;
4. a rise in skilled service charges by 19.4%, to $3.9 million for fiscal yr 2026, from $3.2 million for fiscal yr 2025. The enhance was primarily attributable to increased service charges incurred to speed up the gathering of accounts receivable, partially offset by a lower in skilled charges paid for a sequence of economic investigation providers that had been required by banks in reference to the Company’s borrowings;
5. a rise in promotion and promoting bills by 361.9%, to $0.8 million for fiscal yr 2026, from $0.2 million for fiscal yr 2025. The enhance was primarily because of the Company’s intensified promoting and promotional efforts throughout fiscal yr 2026 to drive gross sales income progress;
6. a rise in lease bills by 13.3%, to $2.8 million for fiscal yr 2026, from $2.5 million for fiscal yr 2025. The enhance was primarily because of the opening of latest bodily shops in Hong Kong and Australia in fiscal yr 2026; and
7. a lower in transaction fee paid to third-party e-commerce market operators by 39.4%, to $0.8 million for fiscal yr 2026, from $1.3 million for fiscal yr 2025. The Company paid third-party e-commerce market operators transaction fee starting from 1.8% to three.0% primarily based on the Company’s gross sales quantity. The lower in transaction fee was according to the lower within the Company’s on-line gross sales.

Interest Expenses, internet

Interest bills, internet included curiosity bills calculated at rate of interest per mortgage agreements and mortgage service prices, which had been straight incremental to the mortgage agreements and amortized over the mortgage intervals. Interest bills, internet elevated by 15.2%, to $2.0 million for fiscal yr 2026, from $1.7 million for fiscal yr 2025. The enhance was primarily attributable to a rise in curiosity bills of $0.6 million, which was primarily because of the elevated weighted common rate of interest for fiscal yr 2026, which was partially offset by the lower in amortized mortgage service prices in relation to the Company’s syndicated loans by $0.3 million.

Additional and Delinquent Tax Due to Consumption Tax Correction

Since January 2022, the Tokyo Regional Taxation Bureau had carried out a tax examination into the Company’s consumption tax submitting for the interval from July 2018 to December 2021. As a results of the examination, the Company was required to return consumption tax refund for export transactions that had been decided to not meet the tax exemption necessities attributable to incomplete submission of related export paperwork. As the failure in submission of related export paperwork was attributable to the Company’s suppliers and prospects, the Company entered into agreements with related suppliers and prospects to assert compensation for damages from the extra consumption tax fee. On July 31, 2023, the Company obtained a reassessment discover from the Tokyo Regional Taxation Bureau, for extra consumption tax legal responsibility on a period-by-period foundation. Based on this reassessment, the Company acknowledged the extra tax for understatement and delinquent tax of $0.6 million throughout fiscal yr 2024. However, the Company contested this reassessment and filed a request for evaluation with the National Tax Tribunal on February 22, 2024, difficult the legality of the reassessment choice and the imposition of extra tax penalties. On February 13, 2025, the Company obtained a ruling from the National Tax Tribunal, dated February 12, 2025, which upheld the Company’s request and annulled the disposition. Accordingly, the Company recorded a restoration of $3.9 million throughout fiscal yr 2025, representing the reversal of upward consumption tax changes and the corresponding understatement surcharges and delinquent taxes imposed underneath the now-annulled reassessment. As the annulment additionally invalidated the downward consumption tax changes granted by the tax bureau for sure different submitting intervals, the Company was required to reinstate these tax liabilities to the quantities set forth in its unique amended return. Therefore, throughout fiscal yr 2026, the Company acknowledged $2.2 million in extra consumption tax and associated understatement surcharges.

Other Income, internet

Other revenue, internet primarily consists of tax refund, disposal acquire or loss from property and gear, authorities subsidy, and different immaterial revenue and expense objects. Other revenue, internet elevated by 700.7%, to $2.9 million for fiscal yr 2026, from $0.4 million for fiscal yr 2025. The enhance was primarily because of the elevated acquire from disposal of property and gear as in comparison with the identical interval final yr.

Gain (loss) from Foreign Currency Exchange

Gain from international forex trade was $0.4 million for fiscal yr 2026, as in comparison with a loss from international forex trade of $0.4 million for fiscal yr 2025. The acquire from international forex trade was primarily because of the fluctuations in international trade charges on the Company’s accounts receivable that denominated in foreign currency echange such because the U.S. greenback throughout fiscal yr 2026. It was additionally because of the acquire from international forex trade by the Company’s Hong Kong subsidiaries, which was primarily because of the vital fluctuations of international trade fee on its payables that had been denominated in Japanese Yen throughout fiscal yr 2026.

Provision (Benefit) for Income Taxes

Provision for revenue taxes was $3.1 million for fiscal yr 2026, in comparison with an revenue tax advantage of $1.9 million for fiscal yr 2025. The provision for revenue taxes elevated by 264.8%. The enhance was primarily attributable to (i) increased present revenue tax bills ensuing from elevated taxable revenue throughout fiscal yr 2026; (ii) the refund of tax acknowledged within the prior fiscal yr following the ruling from the National Tax Tribunal, dated February 12, 2025, which elevated the revenue tax profit for fiscal yr 2025; and (iii) elevated deferred revenue tax bills arising from extra deferred tax liabilities ensuing from the rise within the change in honest worth of warrants liabilities throughout fiscal yr 2026.

Net Income

Net revenue decreased to $0.7 million for fiscal yr 2026, in comparison with $6.6 million for fiscal yr 2025.

Basic and Diluted Earnings per Share

Basic earnings per share was $0.02 for fiscal yr 2026, in comparison with $0.16 for fiscal yr 2025. Diluted earnings per share was $0.02 for fiscal yr 2026, in comparison with $0.16 for fiscal yr 2025.

Financial Condition

As of March 31, 2026, the Company had $2.1 million in money as in comparison with $4.8 million as of March 31, 2025. As of March 31, 2026, the Company additionally had roughly $186.8 million in account receivable steadiness due from third events. Approximately 22.3% of the March 31, 2026 steadiness has subsequently been collected, and the vast majority of the remaining steadiness is anticipated to be collected by December 31, 2026. The assortment of such receivables made money accessible to be used within the Company’s operations as working capital, if obligatory.

Net money utilized in working actions was $10.3 million for fiscal yr 2026, primarily derived from internet revenue of $0.7 million for the yr, and internet modifications within the Company’s working belongings and liabilities, which primarily included elevated accounts receivable of $87.3 million, elevated merchandise inventories of $10.7 million, decreased accounts payable to associated events of $2.7 million and decreased working lease liabilities of $2.5 million, which was partially offset by the elevated accounts payable of $86.3 million, elevated deferred income of $1.3 million and elevated different payables and different present liabilities of $1.2 million.

Net money supplied by investing actions amounted to $6.1 million for fiscal yr 2026, primarily attributable to proceeds from disposal of property and gear within the combination quantity of $7.0 million, partially offset by an funding in a life insurance coverage coverage of $0.6 million, and purchases of property and gear of $0.3 million.

Net money supplied by financing actions was $4.2 million for fiscal yr 2026, which primarily consisted of proceeds from short-term borrowings of $19.4 million, proceeds from long-term borrowings of $14.0 million, proceeds from associated events borrowings of $3.4 million, and capital contribution from non-controlling shareholders of $0.2 million, partially offset by repayments of short-term borrowings of $24.2 million, repayments of long-term borrowings of $7.8 million, fee of dividend distribution of $0.5 million, and reimbursement of obligations underneath finance leases of $0.2 million.

Conference Call Information

The Company will host an earnings convention name at 8:30 am U.S. Eastern Time (9:30 pm Japan Standard Time) on July 10, 2026. Dial-in particulars for the convention name are as follows:

Please dial in no less than quarter-hour earlier than the graduation of the decision to make sure well timed participation.

For these unable to take part, an audio replay of the convention name can be accessible from roughly one hour after the tip of the stay name till July 17, 2026. The dial-in for the replay is 1-855-669-9658 inside the United States or 1-412-317-0088 internationally. The replay entry code is 5582239.

A stay and archived webcast of the convention name may even be accessible on the Company’s investor relations web site at https://www.ystbek.co.jp/irlibrary/.

About Tokyo Lifestyle Co., Ltd.

Headquartered in Tokyo, Japan, Tokyo Lifestyle Co., Ltd. (previously often called Yoshitsu Co., Ltd) is a retailer and wholesaler of Japanese health and beauty merchandise, sundry merchandise, luxurious merchandise, digital merchandise, collectible playing cards, stylish toys, and different merchandise in Hong Kong, Japan, North America, Thailand, Vietnam, the United Kingdom and Australia. The Company gives numerous magnificence merchandise (together with cosmetics, skincare, perfume, and physique care merchandise), well being merchandise (together with over-the-counter medicine, dietary dietary supplements, and medical provides and units), sundry merchandise (together with house items), collectible playing cards and classy toys (together with Pokémon playing cards, BE@RBRICK and different stylish merchandise) and different merchandise (together with meals and alcoholic drinks). The Company at the moment sells its merchandise by directly-operated bodily shops, by on-line shops, and to franchise shops and wholesale prospects. For extra data, please go to the Company’s web site at https://www.ystbek.co.jp/irlibrary/.

Forward-Looking Statements

Certain statements on this press launch are forward-looking statements, throughout the which means of Section 21E of the Securities Exchange Act of 1934, as amended, and as outlined within the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements contain identified and unknown dangers and uncertainties and are primarily based on present expectations and projections about future occasions and monetary traits that the Company believes could have an effect on its monetary situation, outcomes of operations, enterprise technique, and monetary wants. Investors can establish these forward-looking statements by phrases or phrases comparable to “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to,” or different comparable expressions. The Company undertakes no obligation to replace forward-looking statements to mirror subsequent occurring occasions or circumstances, or modifications in its expectations, besides as could also be required by regulation. Although the Company believes that the expectations expressed in these forward-looking statements are cheap, it can not guarantee you that such expectations will transform right, and the Company cautions buyers that precise outcomes could differ materially from the anticipated outcomes and encourages buyers to evaluation different components which will have an effect on its future leads to the Company’s annual report on Form 20-F and in its different filings with the U.S. Securities and Exchange Commission.

For extra data, please contact:

Tokyo Lifestyle Co., Ltd.

Investor Relations Department
Email: [email protected]

Ascent Investor Relations LLC
Tina Xiao
President
Phone: +1-646-932-7242
Email: [email protected]

SOURCE Tokyo Lifestyle Co., Ltd.