Saint Marc Holdings Co., Ltd.

Raw material prices and logistics costs may rise due to changes in the global supply-demand environment, exchange rate fluctuations, rising energy prices, and heightened geopolitical risks. In particular, beef prices have continued to rise against a backdrop of increasing feed costs and declining production volumes in major producing countries, and pork also carries supply-demand fluctuation risk. While the Group is securing multiple regions and multiple suppliers and maintaining appropriate inventory levels as countermeasures, if procurement is disrupted, the Group may be forced to change some menu items or adjust sales volumes.

The Group employs a large number of part-time and temporary staff due to its multi-store operations, and if the securing and training of necessary personnel does not proceed as planned amid continued new store openings, this may hinder business execution and expansion. There are also concerns about labor shortages due to changes in demographic composition. If various labor laws or laws related to social insurance are revised, related costs and personnel expenses may increase, potentially affecting business results.

The Group's stores are subject to regulation under the Food Sanitation Act, and in the event of a food poisoning incident or serious hygiene problem, the Group may be ordered to dispose of food, have its business license revoked, or suspend operations. Although the Group takes thorough hygiene measures, including regular bacterial testing by third-party hygiene inspection organizations, in the event of an actual incident, business results could be materially affected.

The Group records goodwill and intangible fixed assets (trademark rights) arising from corporate acquisitions on its consolidated balance sheet, and if expected results are not achieved due to changes in the business environment or other factors, impairment losses will be recorded. The recording of impairment losses may adversely affect business results and financial position.

The total amount of security deposits and guarantee deposits paid for leased properties for directly operated stores stood at ¥8,122 million (871 properties) as of March 31, 2026, with construction cooperation funds totaling ¥67 million (10 properties); however, protective measures such as the establishment of mortgages against lessors are not complete. As the balance is expected to increase with future store openings, if a situation arises in which a portion becomes unrecoverable due to a lessor's bankruptcy or other reasons, business results may be affected. As a countermeasure, the Group is strengthening internal review based on the credit information of counterparties, including for individual properties.

With numerous stores operating nationwide, natural disasters such as earthquakes, typhoons, and floods may cause damage to store facilities and harm to customers and employees. Even in areas not directly affected, the Group may be indirectly impacted by disruptions to logistics networks, damage to suppliers, or operational constraints due to power outages. These factors could cause delays, disruptions, or suspensions in procurement and sales, potentially affecting business results.

The Group compiles survey information and membership information from customers who visit its stores into a database for use in sales promotion; if customer information were to leak due to fraud or other causes, the Group could face damages claims and reputational decline, potentially affecting business results. As countermeasures, the Group designates and manages external contractors that meet official certification standards for personal information handling, and also thoroughly ensures internal compliance with the Personal Information Protection Act.

The Group procures bread dough from Takaki Bakery Co., Ltd., and transactions with this company accounted for 6.0% (¥1,436 million) of consolidated purchases in the fiscal year under review. Although the Group has maintained a good business relationship since 1991, if any change occurs in this relationship for any reason, business results may be affected. The amount of purchase transactions from this company may also increase as chain expansion continues.

The Group operates 10 full-scale business formats and positions the development of new business formats as an important management issue; however, business results may be affected depending on the progress of development and commercialization of new formats. The business format development function is basically held by the holding company, which promotes the refinement of experimental formats and the development of derivative formats in a group-wide manner, but this involves challenges such as understanding customer needs, building store operation packages, and verifying locations.

The Company adopted a holding company structure in 2006 through a company split that separated operations by business format into subsidiaries, and following absorption-type mergers in July 2022 and April 2024, it now also directly operates the Restaurant Business and the Coffee Shop Business. If, due to unforeseen internal or external factors, the group's internal structure is not fully established, or if the launch of subsidiaries by business format does not proceed smoothly, business results may be affected. It should also be noted that, as a wholly owning parent company, the Company comprehensively bears the risks of each business subsidiary.