Risks of excess inventory, higher costs and damage to frozen products
First written in FY2020. 1 of 6 entries say "Worsened", first in FY2021. Latest entry: FY2026.
The whole theme swung hardest in 2022: 15 of 47 companies on the "Worse" side.
10 other companies' latest entry also says "Other".
- FY2026Increase in inventory balanceAnnual report
「The main factors were an increase of ¥675 million in merchandise and finished products, an increase of ¥585 million in raw materials and supplies, and a decrease of ¥547 million in cash and deposits, among others.」
Merchandise and finished products increased by ¥675 million, while raw materials and supplies increased by ¥585 million. The company did not state that excess inventory or damage had arisen, but disclosed changes in the balance of frozen-product inventories. - FY2024MaterialisedAnnual report
「As a result, the company recognized inventory valuation losses of ¥349 million on finished products and merchandise and ¥151 million on raw materials, increasing cost of sales.」
Against the backdrop of substantial fluctuations in egg prices and the buildup of inventory, inventory valuation losses were actually recognized on finished products and merchandise of ¥349 million and raw materials of ¥151 million, for a total of ¥501 million. - FY2024-Q3Third-quarter buildup of finished-product and raw-material inventoriesAnnual report
「The main factors were an increase of ¥2,189 million in merchandise and finished products, due in part to higher inventory unit prices following the substantial rise in egg prices in the first half and the buildup of finished-product inventories in preparation for supply shortages resulting from future outbreaks of avian influenza, as well as an increase of ¥340 million in raw materials and supplies.」
The company disclosed that it built up finished-product inventories in preparation for supply shortages resulting from avian influenza outbreaks, resulting in increases of ¥2,189 million in merchandise and finished products and ¥340 million in raw materials and supplies. It did not explicitly state that excess inventory had arisen. - FY2024-Q2Inventory Build-UpAnnual report
「The main factors were increases of ¥1,862 million in merchandise and finished products and ¥950 million in raw materials and supplies, resulting from the substantial rise in egg prices, the buildup of inventory in preparation for concerns about future outbreaks of avian influenza, and other factors.」
The company disclosed that it built up inventory in preparation for concerns about avian influenza and the winter demand season, resulting in increases of ¥1,862 million in merchandise and finished products and ¥950 million in raw materials and supplies. It did not explicitly state that excess inventory had arisen. - FY2021WorsenedAnnual report
「Frozen products are manufactured mainly in summer, when demand is low and egg prices are lower, making it possible to procure raw eggs at lower prices, in an effort to reduce costs.」
The company specified that frozen products account for approximately 60% of total inventories and that most are stored at external commercial warehouses. It continues to disclose risks to its financial condition, operating results and cash flows from excess inventory, higher costs and extensive damage. - FY2020First statedAnnual report
「However, if sales do not progress as expected and excess inventory arises, or if the cost of frozen products held by the Group increases due to movements in egg prices, the financial condition, operating results and cash flows of the Group may be affected.」
While manufacturing and storing frozen products using low-cost raw eggs in summer, when demand is low and egg prices are lower, the company has newly disclosed excess inventory due to sluggish sales, higher costs due to market prices, and extensive damage at an external warehouse as risks.