Risk of Earnings Volatility from Adverse Weather and Natural Disasters

「During the interim consolidated accounting period, customer traffic struggled to grow as cool weather from spring through early summer, typhoons and bad weather caused by the seasonal rain front persisted. Customer traffic briefly began to recover with the extreme heat from the latter half of July, but frequent natural disasters, including the Kumamoto earthquake, typhoons and the Chiba torrential rains, forced a temporary slowdown in sales.」

「Although sales slowed in the second half of the month due to the Kumamoto earthquake, typhoons making landfall in the latter half, the Chiba torrential rains and other factors, sales remained solid over the month as a whole.」

「During the current interim consolidated accounting period, temperatures fluctuated widely nationwide from spring through early summer and unstable weather caused customer traffic to stagnate. In the summer season, however, a sudden heatwave arrived, partly because the rainy season brought little rain, and sales began to trend upward as customer traffic recovered.」

「During the winter season, temperatures followed a typically winter pattern from December onward, resulting in stronger sales of winter-season products, mainly warm cold-weather items such as outerwear, knitwear and lap blankets. At the same time, sales tended to stagnate in September and February, when the autumn/winter and spring/summer seasons respectively begin, due to lingering summer heat and cold waves. ... Same-store sales across the company were 98.4% of the prior-year level.」

「During the current interim consolidated accounting period, temperatures were generally high nationwide, with western Japan in particular setting a record for the highest number of extremely hot days in a year. Although the country experienced an extreme heatwave, some areas also saw heavy rain due to the seasonal rain front in June and a typhoon in August, and customer traffic tended to stagnate.」

「During the cumulative first quarter of the current consolidated fiscal year, average temperatures remained high and the large number of rainy days caused customer traffic to stagnate, resulting in difficult trading conditions.」

「Temperatures remained higher than usual from spring through summer, expanding sales mainly of summer and high-summer items. After the autumn season began, however, sales of autumn and early-winter products were weak because temperatures remained above previous records, while customer traffic fell significantly as sales of hygiene products and other items that had been in high demand the previous year contracted sharply, resulting in difficult trading conditions.」

「During the six-month period of the consolidated fiscal year, temperatures were higher than usual in early spring and in July and August, the height of summer. In addition, the easing of the classification of COVID-19 to Category 5 increased pent-up demand centered on outings, and customer traffic showed a further recovery as economic activity normalized. In apparel, in particular, extreme heat increased demand for summer and midsummer products, especially blouses and cut-and-sew tops, leading to higher sales.」

「In August, prolonged heavy rainfall and a tendency toward low temperatures affected sales. Weak sales of summer items subsequently led to inventory disposal, resulting in a significant decline in the gross profit margin.」

「In the apparel business in particular, sales recovered while temperatures rose toward summer, but unseasonably cool weather caused by prolonged rainy-season conditions and heavy rain in August affected results, leaving sales below pre-COVID levels.」

「In store retailing, regular-price sales performed well during the spring and early-summer season, supported by the 10-day Golden Week holiday and sales marking the imperial era change. However, the business struggled because of the impact of prolonged summer rains, typhoon damage from autumn onward, and a contraction in consumption caused by the consumption tax increase. Same-store sales were 98.2% of the previous year.」

「During the six-month period of the consolidated fiscal year, the apparel business temporarily struggled because of the prolonged rainy season and limited sunshine in July, although」

「During the nine-month period of the consolidated fiscal year, the Company was affected by lower customer traffic and sales resulting from disasters, beginning with unsettled weather in early spring, followed by heavy rains centered in western Japan, repeated typhoons, and major earthquakes in northern Osaka Prefecture and the eastern Iburi region of Hokkaido. In addition to weak sales of seasonal products caused by extreme summer heat, the slow decline in temperatures from autumn onward delayed the launch of winter products compared with a typical year. As a result, company-wide same-store sales were 96.7% of the previous year.」

「During the cumulative second-quarter period, sales of full-price and seasonal products in the apparel business failed to progress as planned due to unfavourable weather in early spring and prolonged extreme heat in summer, resulting in a decline in product freshness. The business also faced difficulties amid the additional impact of torrential rains in western Japan.」

「During the first quarter of the consolidated fiscal year, cooler temperatures in early spring followed by a sudden rise in temperatures shortened the selling period for spring apparel overall. In addition, the limited emergence of hit products comparable to those of the previous year resulted in a difficult sales environment.」

「As a result, the apparel business generally performed steadily after appropriate inventory controls became established, but it also faced periods of difficulty because of conditions such as prolonged summer rains and a cool summer, as well as a record cold spell from the beginning of the year.」

「During the cumulative third-quarter period, optimisation of product freshness through appropriate inventory control became established in the apparel business, resulting in stable progress despite temporary effects from climate change.」

「Sales of the apparel products handled by the Company are susceptible to fluctuations caused by adverse weather and unpredictable changes in weather conditions, such as typhoons, which could affect the Company’s performance. In addition, because the Company operates stores throughout Japan, natural disasters such as major earthquakes in regions where its stores are concentrated could affect its financial position and operating results.」