Delayed realization of improvement effects and risks from economic conditions, raw materials, foreign exchange and China

「During the interim consolidated accounting period, the global economy remained generally resilient. However, the outlook for the economy remained uncertain due to heightened geopolitical risks, including developments in trade policies in various countries and rising energy prices against the backdrop of heightened tensions in the Middle East.」

「During the consolidated fiscal year (1 February 2025 to 31 January 2026), the global economy followed a gradual recovery trend. However, heightened geopolitical risks arising from trade policies in various countries and prolonged international conflicts created uncertainty in the near-term economic environment, and a cautious view of the economic outlook persisted.」

「During the interim consolidated accounting period (1 February 2025 to 31 July 2025), the global economy maintained a gradual recovery. However, the outlook remained uncertain due to the effects of trade policies in various countries, the prolonged conflicts in Ukraine and the Middle East, and stagnation in China's economy.」

「During the consolidated fiscal year (1 February 2024 to 31 January 2025), the global economy began to show signs of gradual growth as inflation eased. However, uncertainty over the outlook increased due to heightened tensions in Ukraine and the Middle East, stagnation in China's economy and successive changes of government in various countries.」

「During the interim consolidated accounting period (1 February 2024 to 31 July 2024), tighter monetary policy, mainly in Europe and the United States, geopolitical risks arising from heightened tensions in Ukraine and the Middle East, and stagnation in China's economy weighed on the economy in the near term. Nevertheless, the global economy followed a gradual recovery trend.」

「During the first quarter of the current consolidated fiscal year, the effects of globally tighter monetary policy on national economies, the uncertain situations in Ukraine and the Middle East, and the slowdown in China's economic recovery acted as constraints, resulting in a slow global economic recovery.」

「The turmoil in Ukraine and the Middle East and the slowdown in China's economic recovery weighed on the economy, leaving the global economic recovery stalled.」

「The increasingly complex situation in Ukraine, interest-rate increases by central banks in various countries to curb inflation, and the slowdown in China's economic recovery weighed on the global economy, weakening its recovery trend.」

「During the second quarter of the current consolidated fiscal year (1 February 2023 to 31 July 2023), the prolonged turmoil surrounding Ukraine, interest-rate increases by central banks in various countries to curb inflation, and financial instability in the United States exerted downward pressure on the global economy.」

「During the first quarter of the current consolidated fiscal year (1 February 2023 to 30 April 2023), the environment surrounding the group improved overseas as economic activity resumed in China and a rebound in the economy was expected. However, uncertainty surrounding monetary policy increased as inflation-control measures involving interest-rate increases, mainly in the United States, continued while Russia's military invasion of Ukraine persisted, and some financial institutions failed. In Japan, the effects of the novel coronavirus infection eased and the economy showed signs of a gradual recovery, but the outlook remained uncertain due to surging energy and raw material costs.」

「Meanwhile, concerns over an economic slowdown resulting from measures taken by countries to address high inflation remain, in addition to surging raw material and energy prices triggered by the emergence of geopolitical risks, including the confusion following China's substantial easing of its zero-COVID policy and the prolonged situation in Ukraine, as well as shortages of parts and semiconductors caused by global supply-chain disruptions. The outlook therefore remains uncertain.」

「During the third quarter of the current consolidated fiscal year, inflation surged due to supply constraints and higher resource prices resulting from the situation in Ukraine. The pace of the global economic recovery slowed as central banks in various countries moved to implement substantial interest-rate increases to curb accelerating inflation.」

「During the second quarter of the current consolidated fiscal year, expectations for the normalization of economic activity increased. However, the prolonged Russia-Ukraine situation, surging crude oil, raw material and utility costs, rapid yen depreciation, stagnation in the Chinese economy and distribution caused by lockdowns in Shanghai and elsewhere in China during the COVID-19 pandemic, as well as shortages of various products and delivery delays in the domestic market, affected a broad range of industries, and the outlook remained uncertain.」

「During the first quarter of the current consolidated fiscal year, Japan's economy was expected to recover as the effects of various policies and improvements in overseas economies took hold, with comprehensive measures taken against the novel coronavirus. However, amid uncertainty arising from the situation in Ukraine and other factors, close attention must be paid to downside risks from rising raw material prices, volatility in financial and capital markets and supply-side constraints, while the effects of infectious diseases also require continued monitoring.」

「Meanwhile, the outlook remains uncertain due in part to rising resource prices, exchange-rate fluctuations and heightened geopolitical risks arising from developments in the United States and Eastern European countries.」

「The company will seek to strengthen its management foundation and stabilize its operations by advancing these measures. However, improving earnings power and selecting potential transferees under its capital policy are significantly affected by external factors, including deteriorating economic conditions, extreme weather, inflation-driven increases in raw material costs, exchange-rate fluctuations and rapid changes in conditions in China. Accordingly, material uncertainty related to the going concern exists at present.」

「No new business or other risks arose during the cumulative second quarter of the current consolidated fiscal year, and there were no material changes to the business or other risks described in the annual securities report for the previous fiscal year.」

「However, because it will take a certain period of time to confirm the effects of the measures described above, the company remains unable to eliminate the risk that profitability and financial condition may be affected during implementation by deteriorating economic conditions, extreme weather, inflation-driven increases in raw material costs, exchange-rate fluctuations and rapid changes in conditions in China, among other factors. Accordingly, material uncertainty related to the going concern exists at present.」

「However, it is expected to take a certain period of time for the effects of the measures described above to materialize. While these measures are being implemented, profitability and financial condition may be affected by deteriorating economic conditions, extreme weather, inflation-driven increases in raw material costs, exchange-rate fluctuations and rapid changes in conditions in China, among other factors.」

「However, the feasibility of the measures described above is significantly affected by external factors, including unforeseen disasters caused by deteriorating economic conditions and extreme weather, surging raw material costs due to inflation, exchange-rate fluctuations, the economic deterioration resulting from the spread of the novel coronavirus, and developments in the Chinese economy, which have a major impact on the group. It is therefore extremely difficult to foresee whether these measures can be achieved, and the company recognizes that material uncertainty related to the going concern exists at present.」

「The planning and sales business for the company's own uniform brand targeting the Chinese market, conducted mainly through its Chinese subsidiary, was significantly disrupted by lockdowns implemented in mainland China from February through April due to the spread of the novel coronavirus.」

「During the fiscal year, Japan's economy continued to recover gradually, supported by solid corporate earnings and improvements in employment and income conditions. However, the outlook remained uncertain due to the effects of US-China trade friction, the United Kingdom's withdrawal from the EU and the spread of the novel coronavirus in China.」

「However, it is expected to take a certain period of time for the effects of the measures described above to materialize. While these measures are being implemented, profitability and financial condition may be affected by deteriorating economic conditions, extreme weather, inflation and surging raw material costs, exchange-rate fluctuations, and rapid changes in conditions in China, among other factors. Accordingly, material uncertainty related to the going concern exists at present.」

「However, it is expected to take a certain period of time for the effects of the measures described above to materialize. While these measures are being implemented, profitability and financial condition may be affected by deteriorating economic conditions, extreme weather, inflation and surging raw material costs, exchange-rate fluctuations, and rapid changes in conditions in China, among other factors. Accordingly, material uncertainty related to the going concern exists at present.」

「During the first quarter of the current fiscal year, Japan's economy continued to recover gradually, supported by improvements in corporate earnings and employment and a recovery in personal consumption. However, concerns over a slowdown in the real economy due to intensifying US-China trade friction and the uncertain political and economic situation in Europe have left the outlook uncertain.」

「Looking at the global economy and social conditions, in addition to the recent global economic slowdown, economic friction between the United States and China and developments toward the United Kingdom's withdrawal from the EU have created a globally uncertain political and economic outlook. There are concerns that this may lead companies and individuals in Japan to restrain investment and consumption.」

「However, it is expected to take a certain period of time for the effects of the measures described above to materialize. While these measures are being implemented, profitability and financial condition may be affected by deteriorating economic conditions, extreme weather, inflation and surging raw material costs, exchange-rate fluctuations, and rapid changes in conditions in China, among other factors. Accordingly, material uncertainty related to the going concern exists at present.」

「No new business or other risks arose during the cumulative second quarter of the current consolidated fiscal year, and there were no material changes to the business or other risks described in the annual securities report for the previous fiscal year.」

「During the three-month period ended June 30, there were no new business risks or material changes to the business risks described in the securities report for the previous fiscal year.」

「However, it is expected to take a certain period of time for the effects of the measures described above to materialize. While these measures are being implemented, profitability and financial condition may be affected by deteriorating economic conditions, extreme weather, inflation and surging raw material costs, exchange-rate fluctuations, and rapid changes in conditions in China, among other factors.」

「However, it is expected to take a certain period of time for the effects of the market strategy and new-business revenue initiatives described above, as well as the cost structure improvements, to materialize. While these measures are being implemented, profitability and financial condition may be affected by deteriorating economic conditions, extreme weather, inflation and surging raw material costs, exchange-rate fluctuations, and rapid changes in conditions in China, among other factors. Furthermore, even following the capital increase through a third-party allotment completed on 30 November 2017, the company may be unable to eliminate its negative net worth depending on the extent to which it achieves its future business plan. Accordingly, material uncertainty related to the going concern exists at present.」

「During the six months ended [current first quarter], there was no emergence of new business or other risks, nor any material change in the business or other risks described in the annual securities report for the previous fiscal year.」

「We recognize that the casual-wear market in which our company operates remains challenging, due to seasonal fluctuations and declining purchasing appetite among individual consumers. Our company also faces issues including higher product costs resulting from the trend toward a weaker yen, which is expected to affect profitability.」

「There were no new business risks or material changes to the business risks described in the securities report for the previous fiscal year during the cumulative third quarter period.」

「However, we believe that realizing the effects of the above market strategy and cost-structure improvements will require a certain period of time. While these measures are being implemented, worsening economic conditions, abnormal weather, inflation, higher raw-material prices, foreign-exchange fluctuations and rapid changes in the environment in China may affect improvements in profitability and our financial condition. Accordingly, material uncertainty regarding the going-concern assumption exists at this time.」