Risk of Excess Inventory and Cash Flow Deterioration Due to Inaccurate Demand Forecasts
First written in FY2016. 3 of 10 entries say "Materialised", first in FY2017-Q2. Latest entry: 2026-09-14.
Generation Pass moved to the "Worse" side of this theme in 2026, 4 years after the typical company in this theme (2022).
The whole theme swung hardest in 2022: 13 of 37 companies on the "Worse" side.
16 other companies' latest entry also says "Worsened".
- FY2026-H1WorsenedAnnual report
「Inventories of merchandise and finished products increased by ¥475 million as the Company secured products for future sales expansion.」
As the Company secured products in preparation for sales expansion, merchandise and products increased by ¥475 million, expanding its inventory and cash flow exposure from the end of the previous fiscal year. - FY2025MaterialisedAnnual report
「Merchandise and products increased by ¥291 million as the Company secured products in preparation for future sales expansion.」
As the Company secured products in anticipation of sales expansion, merchandise and products increased by ¥291 million, and cash flow from operating activities was an outflow of ¥625 million. The effects of demand forecasts on inventory and cash flow have materialized in actual results. - FY2021-Q2MitigatedAnnual report
「As a result of continuing rigorous inventory management and reductions in slow-moving inventory, merchandise and products decreased by ¥52 million.」
Continued inventory management and reductions in slow-moving inventory resulted in a ¥52 million decrease in merchandise and products. - FY2020MitigatedAnnual report
「As a result of rigorous inventory management and reductions in slow-moving inventory, merchandise and products decreased by ¥112 million.」
The Company rigorously managed inventory and reduced slow-moving inventory, resulting in a ¥112 million decrease in merchandise and products. - FY2018RestatedAnnual report
「Going forward, the Company plans to raise inventory levels to some extent in order to further reduce lost sales opportunities and therefore plans to hold its own warehouses. Although the policy of holding inventory primarily of products with strong sales performance remains unchanged, if actual orders fall below demand forecasts, excess inventory may arise within the Group, potentially affecting cash flow and resulting in inventory valuation losses.」
The Company continues to raise inventory levels and plan for its own warehouses, while maintaining the risk of excess inventory and valuation losses if demand forecasts are missed. - FY2017-Q3MaterialisedAnnual report
「However, changes to the operating entity in the Shanghai special economic zone and intensifying price competition in BtoB sales have delayed progress toward the sales revenue initially planned, and an inventory write-down has been recorded for some products.」
Inventory valuation losses were recorded on some inventory, contributing to a decline in segment profit in the EC Marketing business. - FY2017-Q2MaterialisedAnnual report
「As a result of recording write-downs primarily on overseas inventory with low turnover, operating profit was ¥63 million, down ¥25 million, or 29.0%, from the same quarter of the previous year; ordinary profit was ¥75 million, down ¥9 million, or 11.0%; and quarterly net profit attributable to owners of the parent was ¥51 million, down ¥6 million, or 11.0%.」
Inventory write-downs were recorded for overseas inventory with low turnover, and the impact of inventory valuation losses on profit materialized. - FY2016First statedAnnual report
「Although the policy of holding inventory primarily of products with strong sales performance remains unchanged, if actual orders fall below demand forecasts, excess inventory may arise within the Group, potentially affecting cash flow and resulting in inventory valuation losses.」
While the Company plans to raise inventory levels for strong-selling products and hold inventory in its own warehouses, it identifies excess inventory resulting from orders falling below demand forecasts as a risk.