Uncertainty in the Demand Environment Due to Economic Stagnation and a Downturn in the Global Economy

「The economic outlook is expected to remain uncertain amid increasing uncertainty over US administration policies and conditions in the Middle East, as well as concerns that the continued depreciation of the yen and higher prices resulting from rising energy and labor costs will cause consumers' propensity to economize to persist and intensify.」

「During the six-month interim consolidated accounting period (1 April 2025 to 30 September 2025), the Japanese economy showed a gradual recovery due to improvements in employment and income conditions, while consumers' heightened defensive stance toward their livelihoods, driven mainly by higher food and other essential-goods prices, continued. In addition, the economic outlook remained uncertain amid expectations of a global economic slowdown due to the impact of US tariff policies and other factors.」

「During the current consolidated fiscal year, the Japanese economy was on a gradual recovery path due to improvements in employment and income conditions. Meanwhile, prices rose because of higher prices for daily necessities and energy and the prolonged depreciation of the yen, further strengthening consumers' defensive stance toward their livelihoods. In addition, uncertainty in the global economy increased due to protectionist moves surrounding tariffs, and the economic outlook remained uncertain.」

「During the six-month interim consolidated accounting period (1 April 2024 to 30 September 2024), the Japanese economy was gradually recovering as employment and income conditions improved, while the economic outlook remained uncertain due to concerns that rising raw material prices and higher prices resulting from the yen's depreciation would weaken consumer sentiment.」

「Although negative interest rates have been lifted, accommodative monetary policy is expected to continue for the time being and the yen is expected to remain on a depreciating trend. In addition, higher prices resulting from rising raw material costs may lead consumers to economize, and the economic outlook is expected to remain uncertain.」

「The economic outlook remains uncertain due to concerns including the yen's continued depreciation, prolonged increases in raw material and energy prices, and cooling consumer sentiment resulting from higher prices.」

「Amid changes in the external environment, including lower real wages due to rising prices, order volume fell below the year-earlier period, partly because we were unable to present the value of our products in a sufficiently attractive and effective manner.」

「During the first quarter of the current fiscal year, economic activity showed signs of normalization as restrictions on movement were eased, including the reclassification of COVID-19 under the Infectious Diseases Control Law to Category 5, but the economic outlook remained uncertain due to factors including the yen's depreciation and higher resource prices resulting from the situation involving Russia and Ukraine.」

「The economic outlook is expected to remain uncertain due to concerns that higher prices for consumer goods and energy, resulting from the yen's depreciation and higher raw material prices, may lead consumers to economize.」

「During the first six months of the current fiscal year, while the impact of COVID-19 continued, the economic outlook remained increasingly uncertain due to factors including higher energy and raw material prices resulting from the prolonged situation involving Russia and Ukraine, and the sharp depreciation of the yen resulting from the monetary policies of various countries.」

「During the first quarter of the current fiscal year, economic activity gradually moved toward normalization as restrictions associated with COVID-19 were eased, but the economic outlook became increasingly uncertain due to factors including a sharp depreciation of the yen and higher resource and crude oil prices resulting from Russia's invasion of Ukraine.」

「Depending on developments in the conflict in Ukraine and foreign exchange rates, significant increases in procurement prices and utility costs due to higher raw material and crude oil prices are a concern, and the economic outlook is expected to remain difficult.」

「The resurgence of COVID-19 led to repeated states of emergency and the implementation of priority preventive measures to prevent the spread of disease. Even after the state of emergency was lifted in October, concerns about a renewed spread caused by new variants of the virus have not been dispelled, and the economic outlook remains uncertain.」

「Although vaccinations are progressing, the repeated declarations of a state of emergency and application of priority preventive measures to prevent the spread of disease in response to the spread of COVID-19 have had a significant impact on economic and social activity, and the economic outlook remains uncertain.」

「During the first quarter of the current fiscal year, Japan's economy remained in an extremely difficult condition as a third state of emergency was declared in April 2021 due to the spread of COVID-19, placing severe restrictions on private consumption and economic activity. In addition, with no signs of a move toward containment, the economic outlook remains uncertain.」

「However, the spread of the third wave of infections has continued unchecked since the beginning of autumn, and uncertainty about the economic outlook has increased.」

「Although economic activity has gradually begun to recover since the lifting of the state of emergency, the outlook remains extremely uncertain as concerns about the spread of infection persist.」

「The outlook for economic trends is expected to remain highly uncertain, depending on the scale and duration of the spread of COVID-19 and the pace of its containment,」

「The economic environment surrounding our group is extremely uncertain, as the spread of COVID-19 has constrained economic activity worldwide and is expected to cause declines in exports and production, inbound tourism demand, and private consumption.」

「The economic outlook remains uncertain due to concerns about expanding trade friction resulting from US trade policy, political developments in EU countries, and the possibility that the decline in pent-up demand following the consumption tax increase will continue for an extended period.」

「Meanwhile, the economic outlook remains increasingly uncertain due to the impact on the domestic economy of prolonged US-China trade friction and the impact on consumption trends of the consumption tax rate increase.」

「However, amid concerns about a slowdown in the global economy and escalating US-China trade friction, uncertainty about the economic outlook has increased due to factors including deteriorating consumer sentiment against a backdrop of sluggish real income growth.」

「Uncertainty is expected to continue due to factors including the impact of the consumption tax increase scheduled for October, higher labor and logistics costs associated with worsening labor shortages, and stagnant consumer sentiment resulting from a persistent defensive stance toward household spending. The environment surrounding the footwear, apparel, and daily-needs retail industries in which our group operates is also expected to become increasingly difficult as competition intensifies amid sluggish market growth.」

「The outlook for the global economy has become increasingly uncertain due to the impact of successive natural disasters on the domestic economy and trade friction arising from US-China trade policies.」

「Against this backdrop, private consumption showed signs of recovery, but consumer sentiment temporarily cooled due to natural disasters, including record rainfall, typhoons, and earthquakes. Meanwhile, the economic outlook remained uncertain due to factors including developments in US trade policy and slower economic growth in emerging Asian economies, including China.」

「Concerns about anxiety over the future of the social security system, consumers' increasingly strong propensity to economize in response to sluggish real wage growth, and the impact of US trade policy on the global economy have created an uncertain environment.」

「Although geopolitical risks, including US economic policy and conditions in North Korea and the Middle East, remain a concern, the domestic economy is expected to continue its gradual recovery as corporate earnings and employment conditions improve. At the same time, our group is expected to continue facing a difficult operating environment due to labor shortages, the resulting increases in labor and logistics costs, and the continued defensive stance toward household spending arising from anxiety about the future.」

「During the first nine months of the current fiscal year, the Japanese economy continued on a gradual recovery path due to improvements in corporate earnings and employment conditions, while latent uncertainties remained, including sluggish wage growth and geopolitical risks. In the retail industry in which our group operates, private consumption showed signs of a gradual recovery, but consumers' defensive stance toward everyday spending, driven by anxiety about the future, remained strong, and the operating environment continued to allow little room for complacency.」

「During the first six months of the current fiscal year, the Japanese economy showed resilience, led by exports and capital investment, and remained on a gradual recovery path, but the economic outlook remained uncertain due to rising geopolitical risks, including US economic policy and heightened tensions surrounding North Korea.」

「During the first quarter of the current fiscal year, the Japanese economy was on a gradual recovery path, with improvements in corporate earnings and employment conditions, but the outlook remained uncertain due to factors including US economic policy, the political situation in Europe, and rising geopolitical risks.」

「Looking ahead, although the economy is showing some signs of improvement, the overseas environment remains highly uncertain due to factors including US economic policy and political risks in Europe, and is expected to remain in a moderate recovery lacking strength. Consumer propensity to economize also remains strong, and the retail industry in which our group operates is expected to continue facing a difficult environment, including intensifying price competition.」

「Meanwhile, overseas economies are facing an uncertain outlook due to concerns about economic instability in Europe related to the UK's withdrawal from the EU and concerns about an economic slowdown in emerging countries, including China. In the retail industry in which our group operates, consumers' propensity to economize remains strong because of sluggish growth in real income and other factors, consumer sentiment has remained weak, and the environment continues to be difficult.」

「The retail industry in which our group operates also remains in a difficult environment, with private consumption continuing to lack strength.」

「Against this backdrop, using the current fiscal year, which marks the 10th anniversary of our listing, as a springboard, the Group has pursued its business while working to build a structure that enables it to produce and sell products at low prices, with the aim of achieving further growth and strengthening earnings power.」