COVID-19-Related Store Operations and Going Concern Risk
First written in FY2020. 6 of 15 entries say "Restated". Latest entry: FY2024.
The whole theme swung hardest in 2023: 1 of 10 companies on the "Worse" side.
4 other companies' latest entry also says "Mitigated".
- FY2024MitigatedAnnual report
「During the consolidated fiscal year, the Japanese economy moved toward normalization of economic activity as COVID-19 was reclassified to Category 5 under the Infectious Diseases Control Law.」
The explanation of significant events related to store operations and the going-concern assumption due to COVID-19, which had been disclosed previously, was not found in the text presented this time, while the normalization of economic activity was disclosed. The contractual terms of the financial covenants remained in the notes. - FY2024-Q3MitigatedAnnual report
「In its business operations, the impact of COVID-19 is subsiding and the Group’s profitability is recovering. The Group will continue to secure earnings, focus on reducing personnel and outsourcing costs by reviewing the cost of sales and improving operational efficiency, record an ordinary profit at an early date and work to resolve these significant events and other matters promptly. In terms of funding, although it breached financial covenants, it requested that its lending financial institutions continue the agreements without applying the clauses concerning loss of the benefit of time. As a result, it obtained written consent confirming that those clauses would not be applied, and its funding position is expected to remain stable for the time being.」
Although the recognition of losses for 3 consecutive fiscal years and the breach of financial covenants continued, the Group had obtained written consent from financial institutions not to apply the loss-of-benefit-of-time provisions and continued working to resolve the significant events through a recovery in profitability and cost reductions. - FY2024-Q1MitigatedAnnual report
「However, in terms of its businesses, the impact of COVID-19 is subsiding and the Group's profitability is recovering. The Group will continue to secure earnings, focus on reducing personnel expenses and outsourcing expenses through reviews of cost of sales and operational efficiency, and work to record ordinary profit at an early stage so that these material events and other matters can be resolved promptly.」
Although the recognition of losses for 3 consecutive fiscal years and the breach of financial covenants continued, the Group indicated that it would resolve the significant events through the containment of the pandemic’s impact, a recovery trend in profitability, cost reductions and the early recording of an ordinary profit. - FY2023WorsenedAnnual report
「Due to the impact of store closures and reduced operating hours implemented to prevent the spread of COVID-19, the Group recorded an operating loss, ordinary loss and net loss attributable to owners of the parent for 3 consecutive fiscal years from the fiscal year ending February 2021. As a result, it breached financial covenants under loan agreements with financial institutions.」
The annual report explicitly stated that the operating loss, ordinary loss and net loss attributable to owners of the parent had continued for 3 consecutive fiscal years, and that the breach of financial covenants also continued. - FY2023-Q3RestatedAnnual report
「In its business operations, the Group will secure earnings by implementing measures to improve profitability, while focusing on reducing personnel and outsourcing costs by reviewing the cost of sales and staffing levels and improving operational efficiency. It will work to record an ordinary profit at an early date and resolve these significant events and other matters promptly. In terms of funding, although it breached financial covenants, it requested that its lending financial institutions continue the agreements without applying the clauses concerning loss of the benefit of time. In response, it obtained written consent confirming that those clauses would not be applied, and also raised funds through stock acquisition rights issued on 11 May 2022. Its funding position is expected to remain stable for the time being.」
Based on the breach of financial covenants, written consent from financial institutions and funding through stock acquisition rights, the Group continues efforts to resolve the significant events promptly through improved profitability, cost reductions and securing funds. - FY2023-Q2MitigatedAnnual report
「Although the Group breached financial covenants, it requested that its lending financial institutions continue the agreements without applying the clauses concerning loss of the benefit of time. In response, it obtained written consent confirming that those clauses would not be applied. In addition, it raised funds through stock acquisition rights issued on 11 May 2022, and expects its funding position to remain stable for the time being.」
Although the breach of financial covenants continued, the Group obtained written consent from its financial institutions not to apply the loss-of-benefit-of-time provisions and also raised funds through stock acquisition rights, and therefore stated that its funding position was expected to remain stable for the time being. - FY2023-Q1RestatedAnnual report
「Due to the impact of store closures and reduced operating hours implemented to prevent the spread of COVID-19, the Group recorded an operating loss, ordinary loss and net loss attributable to owners of the parent in the two consolidated fiscal years preceding the current fiscal year and the previous consolidated fiscal year. As a result, the Group breached financial covenants under loan agreements with financial institutions. If those covenants were enforced, its cash management could be affected, creating events that cast significant doubt on the going-concern assumption.」
The Group stated that events continuing to cast significant doubt on the going-concern assumption remained in place due to losses associated with COVID-19 and breaches of financial covenants. - FY2022MaterialisedAnnual report
「Due to the impact of store closures and reduced operating hours implemented to prevent the spread of COVID-19, the Group recorded an operating loss, ordinary loss and net loss attributable to owners of the parent in both the previous and current consolidated fiscal years. As a result, the Group breached financial covenants under loan agreements with financial institutions. If those covenants were enforced, its cash management could be affected, creating events that cast significant doubt on the going-concern assumption.」
Following the recognition of losses resulting from the impact of COVID-19, an actual breach of financial covenants with financial institutions occurred. However, the Group determined that no material uncertainty regarding the going-concern assumption existed after requesting that the financial institutions continue the agreements, among other measures. - FY2022-Q3RestatedAnnual report
「As of the filing date, circumstances such as a significant decline in net sales existed that created significant risks to the assumption that business activities could continue into the future. However, the Group believes that it can resolve these circumstances by discussing the matter with its financial institutions based on a carefully prepared funding plan and implementing a plan to secure sufficient working capital.」
Although circumstances posing significant risks to the going-concern assumption continued due to a significant decline in net sales and other factors, the Group stated that they could be resolved through its funding plan, discussions with financial institutions and securing working capital. - FY2022-Q2RestatedAnnual report
「The spread of COVID-19 led to the reissuance of states of emergency and priority preventive measures, reducing customer traffic and net sales. In September 2021, the state of emergency and priority preventive measures were lifted, although certain restrictions, including requests to reduce operating hours, remained in place after the lifting. Although a recovery is expected as vaccinations are promoted and various policies take effect, the outlook remains uncertain, including concerns over the risk of a renewed spread of infections.」
While declines in customer traffic and net sales due to the reissuance of states of emergency and other measures continued, certain restrictions remained after they were lifted in September 2021, and the Group disclosed the risk of a renewed spread of infections and uncertainty over the outlook. - FY2021RestatedAnnual report
「As described in “II. Business Overview, 2. Business and Other Risks,” the Group faces circumstances arising from COVID-19 that create significant risks to the assumption that it can continue its business activities into the future. However, by implementing measures to resolve these significant events and other matters, the Group determined that no material uncertainty regarding the going-concern assumption existed and therefore did not include the matter in the “Notes on Going Concern.”」
While continuing to disclose business closures, sluggish sales and the impact on operating cash flow associated with COVID-19 as significant events, the Group determined that no material uncertainty regarding the going-concern assumption existed as a result of its response measures. - FY2021-Q3WorsenedAnnual report
「Net sales have declined due to weaker consumer sentiment resulting from requests to refrain from going out to prevent the spread of COVID-19, as well as reduced operating hours and temporary store closures implemented under states of emergency and other measures. Although a certain degree of recovery was seen after the previous state of emergency was lifted, a state of emergency was declared for 1 prefecture and 3 neighboring prefectures on 7 January 2021, and its coverage was expanded to 11 prefectures on 13 January 2021, leaving the timing of COVID-19 containment uncertain.」
While the decline in net sales continued, the areas covered by the state of emergency expanded from 1 prefecture and 3 neighboring prefectures to 11 prefectures, and uncertainty over the timing of containment persisted. - FY2021-Q2RestatedAnnual report
「Net sales have declined due to weaker consumer sentiment resulting from requests to refrain from going out to prevent the spread of COVID-19, as well as reduced operating hours and temporary store closures implemented under states of emergency and other measures. Although a certain degree of recovery has been seen since the state of emergency was lifted, the timing of the pandemic’s containment remains uncertain.」
While declines in net sales due to requests to refrain from going out, reduced operating hours and temporary store closures continued, the Group reconfirmed that a certain degree of recovery had been seen since the state of emergency was lifted and that the timing of containment remained uncertain. - FY2021-Q1MaterialisedAnnual report
「Net sales have declined due to weaker consumer sentiment resulting from requests to refrain from going out to prevent the spread of COVID-19, as well as reduced operating hours and temporary store closures implemented under states of emergency and other measures. Although a certain degree of recovery has been seen since the state of emergency was lifted, the timing of the pandemic’s containment remains uncertain. As a result, the Group expects net sales to decline and operating cash flow to be negative during the fiscal year, and as of the filing date faces circumstances creating significant risks to the assumption that it can continue its business activities into the future.」
Declines in net sales due to requests to refrain from going out, reduced operating hours and temporary store closures actually occurred, giving concrete form to circumstances posing significant risks to the going-concern assumption. However, based on its funding plans and discussions with financial institutions, the Group determined that no material uncertainty regarding the going-concern assumption existed. - FY2020First statedAnnual report
「As described in “II. Business Overview, 2. Business and Other Risks,” the Group faces circumstances arising from COVID-19 that create significant risks to the assumption that it can continue its business activities into the future.」
The spread of COVID-19 was expected to result in store closures, reduced operating hours, a significant decline in net sales and negative operating cash flow, and newly created circumstances posing significant risks to the going-concern assumption were disclosed. After the filing was submitted, stores in Japan and overseas were also closed.