Japanese beauty and health products retailer Yoshitsu has recorded total revenue of $169.7m (Y24.3bn) for fiscal year (FY) 2023, a decrease of 27.7% from $234.8m in FY22.

The company has attributed the drop to the decline in revenue from online stores and services and directly-operated physical stores.

Revenue from directly operated physical stores, as well as online stores and services, decreased by 10.5% and 83.1%, respectively in FY23.

During the FY ending 31 March, the retailer’s gross margin also dropped by 1.3 percentage points to 17.3%.

Gross profit fell 32.7% to $29.4m in FY23, compared with $43.7m in FY22.

The retailer’s operating expenses dropped by 21.5% to $28.6m over the year, driven by the decrease in shipping expenses, promotion and advertising expenses and other factors.

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Yoshitsu suffered a net loss of $8.0m in FY23, compared to net income of $3.9m a year ago.

Its loss per basic and diluted share were $0.22 over the year against earnings per diluted share of $0.12 in FY22.

Yoshitsu principal executive officer Mei Kanayama said: “I am pleased to present our financial results for fiscal year 2023. Despite the challenges of the global pandemic, we demonstrated resilience and strategic agility in adapting to market changes.

“In light of the impact of a Covid-19 resurgence on our global operations, we have shifted our geographic market strategy to focus toward the domestic Japan market, which revenue generated from Japan market accounted for 42.5% of our total revenue in fiscal year 2023, up from 9.4% of our total revenue in fiscal year 2022. We believe this change has been a strategic success, allowing us to maintain stability during turbulent times.”