MEDIROM Healthcare Technologies Inc. Announces November 2024 Key Performance Indicators (KPIs)

Rhea-AI Summary

MEDIROM Healthcare Technologies (NASDAQ: MRM) released its November 2024 KPIs, showing mixed performance in its salon operations. Total customers served increased to 75,760 from 75,290 year-over-year, with sales per customer rising slightly to JPY 7,055 from JPY 7,045. The repeat ratio remained stable at 77.5%, while operation ratio improved to 44.6% from 43.9%.

In the Health Tech Business segment, the company's Lav® app, which provides health guidance programs, continued to expand. As of November 2024, MEDIROM has secured contracts with 95 corporate insurance associations, and the cumulative number of Lav® app users reached 8,515 individuals.

Positive

• Customer base expanded with total customers served increasing to 75,760 from 75,290 YoY
• Operation ratio improved to 44.6% from 43.9% YoY
• Health Tech Business expanded to 95 corporate insurance associations
• Lav® app user base grew to 8,515 cumulative users

Negative

• Minimal sales per customer growth (only JPY 10 increase YoY)
• Repeat ratio remained flat at 77.5% with no improvement YoY

Insights

Financial Analyst

The November 2024 KPIs for MEDIROM Healthcare Technologies reveal a mixed but generally stable operational performance. Total customers served showed a marginal increase of 0.62% year-over-year to 75,760, while sales per customer grew slightly by 0.14% to JPY 7,055. The operation ratio improved by 0.7 percentage points to 44.6%, indicating better resource utilization.

The Health Tech segment demonstrates promising growth with the Lav® app reaching 8,515 cumulative users and 95 corporate insurance association contracts. This expansion aligns with Japan's government initiatives to increase health guidance implementation rates, presenting a significant market opportunity given current implementation rates are well below targets (24.6% vs. 45% target).

While the salon business shows stability, the real growth driver appears to be the Health Tech division, which is capitalizing on regulatory tailwinds and digital transformation in healthcare delivery. For a company with a market cap of approximately $8 million, this dual-revenue model could provide resilience and growth potential.

Healthcare Technology Analyst

MEDIROM's digital health platform Lav® is strategically positioned in Japan's mandatory health guidance market. The sustained monthly growth in corporate contracts and user base demonstrates market validation. The platform's remote delivery model addresses a critical pain point in traditional health guidance programs by reducing dropout rates through convenient access.

The expanding footprint in the corporate insurance sector, with 95 associations now contracted, suggests strong product-market fit. This is particularly relevant given the government's push to achieve 70% medical checkup implementation rates against current 56.5% levels. The gap between current and target rates represents a substantial growth runway for MEDIROM's digital solution.

The increasing ICT adoption rate exceeding 50% in the industry further validates MEDIROM's technology-first approach. This digital transformation trend, accelerated by COVID-19, positions Lav® advantageously in the evolving healthcare delivery landscape.

Total Customers Served: 75,760 – Sales Per Customer: JPY 7,055 – Customer Repeat Ratio: 77.5%

TOKYO, Dec. 23, 2024 (GLOBE NEWSWIRE) -- MEDIROM Healthcare Technologies Inc. (NasdaqCM: MRM), a holistic healthcare company based in Japan (the “Company”), today announced its major Key Performance Indicators, or KPIs, updated for the month of November 2024. Data is provided for all salons for which comparable financial and customer data is available and excludes certain salons where such information is not available.

Salon Operation Business
The following monthly KPIs provide insight into the business fundamentals and progress of the Company, updated for the month of November 2024:

• Total customers served increased to 75,760 in November 2024 from 75,290 in the year-ago period.
• Sales per customer increased to JPY 7,055 in November 2024 from JPY 7,045 in the year-ago period.
• Repeat ratio, which indicates the percentage of repeat customers, was 77.5% in 2024, the same as 77.5% in the year-ago period.
• Operation ratio was 44.6% in November 2024, up from 43.9% in the year-ago period.

	Number of Salons(*1)	Number of Salons with Data(*2)	Total Customers Served(*3)	Sales per Customer(*4)	Repeat Ratio(*5)	Operation Ratio(*6)
November-23	313	289	75,290	JPY 7,045	77.5%	43.9%
December-23	314	290	83,124	JPY 7,271	77.7%	46.7%
January-24	311	287	74,533	JPY 7,147	76.8%	44.7%
February-24	311	287	71,376	JPY 7,099	77.6%	44.9%
March-24	312	288	77,854	JPY 7,190	77.9%	45.7%
April-24	308	285	74,621	JPY 7,143	75.9%	43.5%
May-24	307	284	80,512	JPY 6,964	74.8%	44.9%
June-24	308	285	82,656	JPY 7,061	75.6%	47.4%
July-24	309	286	81,580	JPY 7,060	75.0%	46.6%
August-24	307	283	83,770	JPY 7,144	75.1%	47.3%
September-24	308	284	82,401	JPY 7,158	75.8%	48.0%
October-24	307	282	79,571	JPY 6,923	76.6%	45.5%
November-24	308	283	75,760	JPY 7,055	77.5%	44.6%

(*1) Number of Salons: Includes the Company’s directly-operated salons and franchisees’ salons.
(*2) Number of Salons with Data: The number of salons for which comparable financial and customer data is available.
(*3) Total Customers Served: The number of customers served at salons for which comparable financial and customer data is available.
(*4) Sales Per Customer: The ratio of total salon sales to number of treated customers at all salons for which comparable financial and customer data is available.
(*5) Repeat Ratio: The ratio of repeat customer visits to total customer visits in the applicable month for all salons for which comparable financial and customer data is available.
(*6) Operation Ratio: The ratio of therapists’ in-service time to total therapists’ working hours (including stand-by time) for the applicable month for all salons for which comparable financial and customer data is available.

* Repeat ratios shown in the chart above do not include salons in public bath houses. In November 2024, the repeat ratios for all salons and salons in public bathhouses only were 77.5% and 56.9%, respectively.

*Since July 2021, the salon operation business has been managed by Wing Inc., which is a wholly-owned subsidiary of the Company.

Health Tech Business (Lav®)
The Company offers a government-specific health guidance program (the “Program”) using Lav®, an on-demand training application developed by the Company. The Program is designed to be less burdensome for the users and is delivered through a completely remote support style using the web remote interview and chat function of Lav®. This approach helps to reduce the dropout rate of conventional specific health guidance programs.

The Program provides support to medical professionals, such as public health nurses, dietitians, etc., that assist eligible individuals (age between 40 and 74) who are at risk of developing lifestyle-related diseases that can be caused by an unbalanced diet, lack of sleep, lack of exercise, smoking, stress, and other factors, by reviewing their lifestyle habits through specific health checkups that focus on metabolic syndrome. The implementation of specific health checkups and specific health guidance has become mandatory for medical insurers in Japan, including national health insurance and employee health insurance providers, since April 2008.

The Ministry of Health, Labor and Welfare has set a nationwide target of at least 70% for specific medical checkup implementation rates and at least 45% for specific health guidance implementation rates. In fiscal year 2021, however, the medical checkup implementation rates and specific health guidance implementation rates were only 56.5% and 24.6%, respectively. As a result, the market for these services is expected to expand due to the government’s effort to achieve the set target implementation rates. According to a survey by the Japan Health Guidance Association, the utilization of Information and Communication Technology (ICT) has been increasing, and the adoption rate has exceeded 50% due to the impact of COVID-19 in recent years.

As of November 2024, the Company has entered into contracts with 95 corporate insurance associations, and the cumulative number of users of the Company’s Lav® app has exceeded 8,000 people, bringing the total to 8,515 individuals.

	Number of New Contracts with Corporate Insurance Associations(*1)	Number of New Users(*2)	Cumulative Number of Contracts with Corporate Insurance Associations(*3)	Cumulative Number of Users
November-23	1	256	73	6,262
December-23	1	161	74	6,423
January-24	1	174	75	6,597
February-24	1	152	76	6,749
March-24	1	203	76	6,952
April-24	3	187	79	7,139
May-24	2	99	81	7,238
June-24	2	131	83	7,369
July-24	1	166	84	7,535
August-24	3	109	87	7,644
September-24	0	221	87	7,865
October-24	6	320	93	8,185
November-24	2	330	95	8,515

(*1) Number of new contracts with corporate insurance associations entered into in the applicable month to implement specified health guidance program offered by the Company.
(*2) Number of new users that started using specified health guidance offered by the Company in the applicable month.
(*3) Cumulative number of contracts with corporate insurance associations excluding the number of terminated contracts.

Forward-Looking Statements
Certain statements in this press release are forward-looking statements for purposes of the safe harbor provisions under the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may include estimates or expectations about the Company’s possible or assumed operational results, financial condition, business strategies and plans, market opportunities, competitive position, industry environment, and potential growth opportunities. In some cases, forward-looking statements can be identified by terms such as “may,” “will,” “should,” “design,” “target,” “aim,” “hope,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “project,” “potential,” “goal,” or other words that convey the uncertainty of future events or outcomes. These statements relate to future events or to the Company’s future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, levels of activity, performance, or achievements to be different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company’s control and which could, and likely will, affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to the Company’s operations, results of operations, growth strategy and liquidity. Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements in this press release include:

• the Company’s ability to achieve its development goals for its business and execute and evolve its growth strategies, priorities and initiatives;
• the Company’s ability to sell certain of its owned salons to investors, and receive management fees from such sold salons, on acceptable terms;
• changes in Japanese and global economic conditions and financial markets, including their effects on the Company’s expansion in Japan and certain overseas markets;
• the Company’s ability to achieve and sustain profitability in its Digital Preventative Healthcare Segment;
• the fluctuation of foreign exchange rates, which affects the Company’s expenses and liabilities payable in foreign currencies;
• the Company’s ability to hire and train a sufficient number of therapists and place them at salons in need of additional staffing;
• changes in demographic, unemployment, economic, regulatory or weather conditions affecting the Tokyo region of Japan, where the Company’s relaxation salon base is geographically concentrated;
• the Company’s ability to maintain and enhance the value of its brands and to enforce and maintain its trademarks and protect its other intellectual property;
• the financial performance of the Company’s franchisees and the Company’s limited control with respect to their operations;
• the Company’s ability to raise additional capital on acceptable terms or at all;
• the Company’s level of indebtedness and potential restrictions on the Company under the Company’s debt instruments;
• changes in consumer preferences and the Company’s competitive environment;
• the Company’s ability to respond to natural disasters, such as earthquakes and tsunamis, and to global pandemics, such as COVID-19; and
• the regulatory environment in which the Company operates.

More information on these risks and other potential factors that could affect the Company’s business, reputation, results of operations, financial condition, and stock price is included in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including in the “Risk Factors” and “Operating and Financial Review and Prospects” sections of the Company’s most recently filed periodic report on Form 20-F and subsequent filings, which are available on the SEC website at www.sec.gov. The Company assumes no obligation to update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ from those anticipated in these forward-looking statements, even if new information becomes available in the future.

About MEDIROM Healthcare Technologies Inc.
MEDIROM, a holistic healthcare company, operates 308 (as of November 30, 2024) relaxation salons across Japan, Re.Ra.Ku^® being its leading brand, and provides healthcare services. In 2015, MEDIROM entered the health tech business and launched new healthcare programs using an on-demand training app called “Lav^®”, which is developed by the Company. MEDIROM also entered the device business in 2020 and has developed a smart tracker “MOTHER Bracelet^®”. In 2023, MEDIROM launched REMONY, a remote monitoring system for corporate clients, and has received orders from a broad range of industries, including nursing care, transportation, construction, and manufacturing, among others. MEDIROM hopes that its diverse health-related product and service offerings will help it collect and manage healthcare data from users and customers and enable it to become a leader in big data in the healthcare industry. For more information, visit https://medirom.co.jp/en.

Contacts
Investor Relations Team
ir@medirom.co.jp

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FAQ

What were MEDIROM's (MRM) key customer metrics for November 2024?

In November 2024, MEDIROM served 75,760 total customers, achieved sales per customer of JPY 7,055, and maintained a repeat ratio of 77.5%.

How did MEDIROM's (MRM) November 2024 performance compare to the previous year?

Compared to November 2023, MEDIROM increased total customers from 75,290 to 75,760, slightly improved sales per customer from JPY 7,045 to JPY 7,055, and maintained the same repeat ratio of 77.5%.

What is the current status of MEDIROM's (MRM) Lav® health guidance program?

As of November 2024, MEDIROM's Lav® program has contracts with 95 corporate insurance associations and reached 8,515 cumulative users.

How has MEDIROM's (MRM) operation ratio changed year-over-year in November 2024?

MEDIROM's operation ratio improved to 44.6% in November 2024, up from 43.9% in November 2023.