Upfront burden of new-opening costs

「Final operating income declined year on year due to pre-opening expenses for new locations and other factors, but all profit measures remained in the black, exceeding the initial plan, which had assumed an operating loss.」

「Although we achieved greater cost efficiency through the closure and transfer of 4 locations in the previous fiscal year, operating income and ordinary income fell below the same period of the previous year because of the decline in gross profit due to lower revenue, the greater-than-expected increase in non-regular employment to secure personnel, and proactive spending on capital investment and talent development associated with advancing the hotel business.」

「Operating income and ordinary income fell below the same period of the previous year because we made proactive expenditures on capital investment and talent development associated with advancing the hotel business.」

「On the profit side, in addition to the impact of lower revenue, store closure losses recognized in the second quarter, higher raw material costs, capital investment to advance the hotel business, and increased non-regular employment costs associated with securing personnel to address labor shortages put pressure on profit, resulting in lower profit.」

「In terms of earnings, profits declined because costs were trending higher due to the recognition in the second quarter of losses on store closures, capital investment associated with advancing the hotel business, and higher personnel expenses resulting from increased non-regular employment to address labor shortages.」

「Costs exceeded the initial forecast due to higher advertising and promotional expenses and other costs associated with new openings.」

「In addition to the decline in gross profit due to lower revenue, operating income and ordinary income fell below the same period of the previous year because we made proactive expenditures on preparations for the opening of THE HIRAMATSU HOTELS & RESORTS Ginoza, which opened on 14 July 2018, as well as branding and talent development.」

「During the period, in addition to incurring new-opening expenses, including preparations for new hotels decided on during the period, we made proactive investments in renovations and rebranding of existing locations, as well as strategic media exposure and publicity and promotional expenses for newly opened hotels.」

「As we shifted toward intensifying proactive investment for future growth, including preparations for the new hotels already announced, Okinawa (scheduled to open in July 2018), Kyoto (winter 2019), Karuizawa (spring 2020) and Nasu (summer 2020), advertising and promotional activities to strengthen brand equity, and the strengthening and development of talent, profit margins declined from the same period of the previous year.」

「Higher advertising and promotional costs and other costs associated with new openings」

「We made proactive investments, including the opening costs of newly opened hotels, reinvestment in existing locations through renovations and rebranding, preparations for the opening of Kodaiji Jugoan, our first kaiseki restaurant and first location in Kyoto, whose opening was imminent, and preparations for the opening of the French restaurant Restaurant Hiramatsu Kodaiji, scheduled to open in September 2017.」

「On the cost side, profit margins declined and profit decreased year on year due to higher raw material costs, increased staffing in preparation for the future expansion of the hotel and restaurant businesses, the burden of opening costs for new locations, and the recognition of extraordinary losses, including a payment for the founder's services.」

「On the cost side, profit margins declined and profit decreased year on year due to higher raw material costs, increased staffing in preparation for the future expansion of the hotel and restaurant businesses, the burden of opening costs for new locations, and the recognition of extraordinary losses, including a payment for the founder's services.」

「The company incurred those new-opening costs upfront.」