Consumer and Business Environment Risks from the Spread of COVID-19

「Personal consumption and inbound demand, among others, showed signs of recovery as COVID-19 was reclassified as a Category 5 infectious disease and restrictions on activities were eased, and the economy remained on a moderate recovery trend.」

「During the cumulative period of the third quarter, there were no occurrences of the major risks that management recognizes as potentially having a material impact on the company's financial position, operating results or cash flows, among matters concerning the business and accounting conditions described in this quarterly report, nor were there any material changes to the section entitled "Business and Other Risks" in the annual securities report for the previous fiscal year.」

「The movement of people recovered as COVID-19 was reclassified as a Category 5 infectious disease, and personal consumption showed signs of recovery.」

「During the cumulative third-quarter period, the confectionery and food industries saw signs of recovering demand as restrictions on activities introduced to address COVID-19 were gradually eased and the nationwide travel assistance program was resumed, although」

「During the cumulative first-quarter period, the Japanese economy showed signs that restrictions on economic activity were gradually being eased as the number of infections declined, despite the impact of COVID-19.」

「However, if the effectiveness of current COVID-19 vaccines declines because of the emergence of new variants or the development of therapeutic drugs is delayed, our business performance and financial condition could be affected by economic stagnation resulting from restrictions on the movement of people, closures of stores and factories, and various other restrictions on activities, depending on how the situation develops.」

「The economy turned back toward a slowdown as a new wave of COVID-19 infections caused by the Omicron variant, rising crude oil prices and surging raw material prices took hold.」

「At our company, the decline in customer numbers at major sales channels, including large commercial facilities, restaurant chains, convenience stores, transportation hubs such as stations and airports, and theme parks, had a substantial impact on business performance. Meanwhile, commercially available retort products and products for online sales, which addressed growing demand for home cooking and stay-at-home consumption during the pandemic, performed steadily, and we worked to increase sales through active expansion in these business formats and markets.」

「The confectionery and food industries are also facing difficult conditions. A state of emergency was declared, and continued requests to refrain from business activities and going out have constrained and changed purchasing behavior, worsening corporate earnings.」

「At our company, the decline in customer numbers at our major sales channels, including convenience stores, department stores, station buildings, stations and airports, had a direct impact on the execution of the strategies set out in the Medium-Term Management Plan 2021, making revisions necessary.」

「Amid these challenging conditions, we launched the Medium-Term Management Plan 2021, which began in fiscal 2019, and pursued the development and strengthening of our management foundation and the expansion of earnings under the basic policy of “strengthening profitability through sales growth, higher productivity and greater efficiency.” However, the outlook remains highly uncertain because of the spread of COVID-19, and sales have yet to enter a recovery trend. Net sales for the third quarter were ¥22,500.872 million, a decrease of ¥3,610.588 million, or 13.8%, from the same period of the previous year.」

「However, the negative impact of the spread of COVID-19 was significant, and revenue for the second quarter was ¥10,334,096 thousand, a decrease of ¥2,870,226 thousand, or 21.7%, from the same period of the previous year. In terms of earnings, although the Company pursued greater efficiency through cost reductions, the impact of lower revenue on profits was significant. Operating loss was ¥3,060,294 thousand, a deterioration of ¥809,324 thousand from the same period of the previous year; ordinary loss was ¥2,893,639 thousand, a deterioration of ¥717,670 thousand; and quarterly net loss was ¥1,916,754 thousand, a deterioration of ¥357,060 thousand.」

「Net sales for the first quarter were ¥4,436.062 million, a decrease of ¥1,549.927 million, or 25.9%, from the same period of the previous year. Although we pursued greater efficiency through cost reductions, the decline in sales had a substantial impact on earnings, resulting in an operating loss of ¥1,797.170 million, an ordinary loss of ¥1,687.716 million and a quarterly net loss of ¥1,104.887 million.」

「The global spread of COVID-19 has had an extremely serious impact on the domestic economy.」