#Japan #Tokyo #financial results #Tokyo Lifestyle #fiscal year 2026

Tokyo Lifestyle Co., Ltd. Achieves Significant Growth in First Half of Fiscal Year 2026

Tokyo Lifestyle Co., Ltd., trading on Nasdaq under the ticker TKLF, has reported remarkable financial results for the first six months of its fiscal year 2026, which ended on September 30, 2025. The company, known for its retail and wholesale activities involving Japanese beauty and health products, has unveiled a staggering 94.3% year-over-year revenue growth, totaling $190.4 million compared to last year's $98.0 million.

Mr. Mei Kanayama, the Principal Executive Officer, stated that the company has witnessed a broad-based growth across its core business lines. Notably, revenue from franchise stores and wholesale customers surged by 102.5% to $176.1 million, further complemented by a 47.1% uptick in revenue from directly operated physical stores, which generated $10.2 million. This impressive growth trajectory is attributed to an extended product portfolio and ongoing efforts to attract both new retail and wholesale customers.

Strategic Focus on Key Categories

During the reporting period, Tokyo Lifestyle focused on reinforcing its core categories, including beauty, luxury, and electronics. The company increased its number of stock keeping units (SKUs) significantly by 59.4%, illustrating its commitment to expanding its product offerings. As Kanayama elaborated, targeted promotional initiatives and proactive pricing strategies supported by a maturing membership program have played a crucial role in driving sales, particularly within physical retail locations.

Promotional activities such as mall events and customer incentives contributed to enhanced customer traffic in stores. The beauty product category has seen especially strong sales, indicating effective marketing and a robust inventory strategy.

Financial Performance Overview

Despite the significant improvements in revenue and gross profit, which rose by 29.8% to $15.8 million, the company registered a net loss of $0.9 million for the first half, compared to a net income of $1.3 million in the previous fiscal year. This loss primarily stemmed from prior-period tax adjustments and foreign exchange fluctuations impacting profitability. However, operational performance indicators signal ongoing enhancements in business fundamentals, especially given the growth in operating profits.

The company maintained a stable gross margin of 8.3% across its various lines of business, evidencing a successful balance between scale and profitability. Operating expenses rose in line with the revenue, totaling $12.1 million, due in part to increased shipping costs and business expansion-related expenditures.

Forward-Looking Strategy

As Tokyo Lifestyle eyes future growth, it has reaffirmed its commitment to strategic expansion efforts. The company plans to invest in site evaluations, customer retention strategies, and technological advancements to enhance its online sales capabilities. This multi-channel growth strategy is anticipated to align well with shifts in consumer behavior and market trends.

Looking ahead, both Kanayama and Mr. Youichiro Haga, the Principal Accounting and Financial Officer, expressed confidence in the company's operational strategy and execution capabilities, citing a solid foundation to support ongoing, profitable growth. With a clear roadmap in vision, Tokyo Lifestyle aims not only to navigate existing challenges but also to capitalize on expanding opportunities across its diverse markets.

Summary of Financial Highlights

• - Total Revenue: $190.4 million, up 94.3% YoY
• - Gross Profit: $15.8 million, up 29.8% YoY
• - Operating Income: $3.6 million, up 13.0% YoY
• - Net Loss: $0.9 million compared to net income of $1.3 million last year.
• - Basic and Diluted Loss per Share: $0.02

In conclusion, Tokyo Lifestyle's strong performance in the first half of fiscal year 2026 underscores its strategic efforts and operational efficacy, positioning it well for continued success and value creation for its shareholders in a dynamically evolving retail landscape.