Decline in profitability due to inventory valuation losses and slow-moving legacy products
First written in FY2019. 11 of 31 entries say "Mitigated", first in FY2021-Q2. Latest entry: 2026-10-02.
The whole theme swung hardest in 2018: 3 of 7 companies on the "Worse" side.
6 other companies' latest entry also says "Mitigated".
- FY2027-H1Inventory growth alongside inventory optimizationAnnual report
「Merchandise increased by ¥536.559 million. Some products were sold on ZOZOTOWN to normalize inventory accumulated through the previous fiscal year. Inventory clearance progressed, and inventory levels were normalized.」
The merchandise balance increased because of new store openings and product launches, while sales on ZOZOTOWN advanced the clearance and normalization of accumulated inventory. - FY2026Coexistence of increased inventory and stable gross marginAnnual report
「Merchandise increased from ¥2,895.420 million to ¥3,661.286 million. Gross margin was 51.8% (up 0.2 percentage points year on year). Inventory valuation loss: ¥28.311 million」
The merchandise balance increased in connection with new store openings and product launches, while gross margin edged up to 51.8% and the inventory valuation loss came to ¥28.311 million. - FY2026-H1Coexistence of increased inventory and sales growthAnnual report
「Merchandise increased by ¥1,263.186 million. The increase in inventory was ¥1,291.061 million.」
The merchandise balance increased by ¥1,263.186 million in connection with new store openings and product launches, while the increase in inventory represented a ¥1,291.061 million use of cash in operating cash flow. Inventory investment expanded alongside sales growth. - FY2025MitigatedAnnual report
「Merchandise decreased from ¥3,123.325 million to ¥2,895.420 million. Gross margin was 51.6% (up 1.5 percentage points). Stagnant inventory decreased.」
The merchandise balance decreased, and gross margin rose 1.5 percentage points as stagnant inventory declined and pricing and inventory management improved. The inventory valuation loss also changed from a loss of ¥39.327 million in the previous year to a gain of ¥79.674 million. - FY2025-H1MitigatedAnnual report
「Merchandise decreased by ¥122.884 million. The decrease in inventory was ¥180.841 million. Gross margin was 52.8% (up 2.4 percentage points year on year).」
The merchandise balance decreased by ¥122.884 million from the end of the previous fiscal year, while inventory for cash flow purposes also decreased by ¥180.841 million, and gross margin improved by 2.4 percentage points. The disclosure indicated progress in addressing the decline in profitability caused by stagnant inventory and valuation losses. - FY2025-Q1WorsenedAnnual report
「Autumn/winter inventory from the previous fiscal year increased unexpectedly. Merchandise increased from ¥3,123.325 million to ¥3,489.034 million. Sales of inventory were promoted in Japan and mainland China by strengthening family sales.」
Autumn/winter inventory from the previous fiscal year increased unexpectedly in response to the unplanned closure of unprofitable stores in China and declining e-commerce sales, and the merchandise balance also increased by ¥365.709 million. Inventory clearance was accelerated at the same time. - FY2024Coexistence of increased inventory and reduced valuation lossesAnnual report
「Merchandise was ¥3,123.325 million. The fiscal year-end inventory balance is the amount after a write-down to book value due to declining profitability, and the following inventory valuation loss is included in cost of sales. ¥39.327 million」
The merchandise balance increased from ¥2,641.633 million at the end of the previous fiscal year to ¥3,123.325 million, while the inventory valuation loss decreased from ¥101.144 million in the previous fiscal year to ¥39.327 million. The inventory increase and reduction in valuation losses occurred simultaneously. - FY2024-Q2Coexistence of declining inventory and declining gross marginAnnual report
「This was mainly because cash and deposits increased by ¥417.501 million, while property, plant and equipment decreased by ¥564.478 million and merchandise decreased by ¥64.149 million. Meanwhile, gross margin was 50.4% (down 0.6 percentage points year on year), mainly because discount sales increased as the Chinese subsidiary cleared inventory.」
The merchandise balance decreased by ¥64.149 million from the end of the previous fiscal year, while gross margin fell 0.6 percentage points to 50.4% because of increased discount sales associated with inventory clearance by the Chinese subsidiary. Inventory reduction and declining gross margin occurred simultaneously. - FY2024-Q1Increase in merchandise inventory and decline in gross marginAnnual report
「This was mainly because merchandise increased by ¥779.167 million and cash and deposits increased by ¥142.047 million, while property, plant and equipment decreased by ¥345.964 million. Gross margin was 49.6% (down 2.3 percentage points year on year), as the family sale of autumn/winter merchandise, normally held in January, was held in February in 2023, resulting in a decline in gross margin.」
The merchandise balance increased by ¥779.167 million from the end of the previous fiscal year, while gross margin fell to 49.6% because of the change in the timing of the family sale. The disclosure cited both an increase in inventory and a decline in gross margin. - FY2023WorsenedAnnual report
「The fiscal year-end inventory balance is the amount after a write-down to book value due to declining profitability, and the following inventory valuation loss is included in cost of sales. ¥101.144 million」
The merchandise balance increased to ¥2,641.633 million, and the inventory valuation loss came to ¥101.144 million. This was up from the ¥50.080 million valuation loss in the previous fiscal year, indicating a greater decline in profitability from inventory valuation. - FY2023-Q3WorsenedAnnual report
「Gross margin was 50.5% (down 2.8 percentage points year on year), but was 51.7% (down 1.6 percentage points year on year) excluding the impact of applying the revenue recognition standard. This was attributable to sluggish growth in the company's original private-label products in Japan and discount sales of spring/summer merchandise in mainland China.」
Gross margin fell 1.6 percentage points year on year even excluding the impact of the revenue recognition standard, with sluggish growth in the company's original private-label products in Japan and discount sales in mainland China cited as factors. - FY2023-Q2WorsenedAnnual report
「Gross margin was 51.0% (down 1.8 percentage points year on year), but was 52.3% (down 0.5 percentage points year on year) excluding the impact of applying the revenue recognition standard. Sales in Japan were at the same level as in the previous year because inventory was normalized and discount sales were restrained, while the decline was attributable to increased discount sales in mainland China.」
Discount sales increased in mainland China, and gross margin fell 0.5 percentage points year on year even excluding the impact of applying the revenue recognition standard. Profitability risks from inventory and discount sales have emerged. - FY2023-Q1Increase in merchandise inventory and maintenance of gross marginAnnual report
「Merchandise increased by ¥774.241 million. Gross margin was 51.9% (down 1.1 percentage points year on year), but was 53.0% excluding the impact of applying the revenue recognition standard, the same level as in the previous year, when inventory was normalized and discount sales were restrained.」
The merchandise balance increased by ¥774.241 million from the end of the previous fiscal year, while gross margin was 53.0% excluding the impact of applying the revenue recognition standard, which the company explained was at the same level as in the previous year. - FY2022WorsenedAnnual report
「The fiscal year-end inventory balance is the amount after a write-down to book value due to declining profitability, and the following inventory valuation loss is included in cost of sales. Fiscal year: ¥50.080 million」
While inventory levels were being normalized, the inventory valuation loss came to ¥50.080 million, up from ¥29.542 million in the previous fiscal year. - FY2022-Q3MitigatedAnnual report
「Inventory levels were brought into line through the intensified sell-through of inventory in the previous year」
Inventory levels were normalized by accelerating inventory clearance, advancing efforts to address the decline in profitability caused by inventory stagnation and valuation losses. - FY2022-Q2MitigatedAnnual report
「Inventory levels were brought into line through the intensified sell-through of inventory in the previous year」
The company continued addressing declining profitability caused by inventory accumulation and valuation losses by improving inventory health through accelerated sell-through and family sales. - FY2022-Q1MitigatedAnnual report
「Inventory levels were brought into line through the intensified sell-through of inventory in the previous year」
The company states that continued efforts to sell through inventory from the previous year brought inventory levels into line and improved the gross margin. - FY2021MitigatedAnnual report
「Consolidated fiscal year: ¥29.542 million」
The inventory valuation loss was ¥29.542 million, down from ¥60.201 million in the previous consolidated fiscal year. Merchandise inventory also declined 10.9% year on year, indicating progress in selling through old products and current-season spring/summer merchandise and optimizing inventory. - FY2021-Q3MitigatedAnnual report
「Accelerated sell-through of old products and inventory optimization through family sales and other measures」
The company accelerated the sell-through of old products through family sales and other measures and worked to optimize inventory. - FY2021-Q2MitigatedAnnual report
「The company worked to reduce inventory by selling through current-season spring/summer merchandise and old products through continued sale periods and family sales.」
The company worked to sell through current-season spring/summer merchandise and old products and reduce inventory through continued sale periods and family sales. - FY2020WorsenedAnnual report
「Closing inventory is stated at the amount after a write-down of its carrying value due to lower profitability, and the following inventory valuation loss was included in cost of sales: consolidated fiscal year, ¥60.201 million.」
The inventory valuation loss due to lower profitability was ¥60.201 million, up from ¥37.668 million in the previous fiscal year. - FY2020-Q2RestatedAnnual report
「During the cumulative second quarter, there were no new business or other risks and no material changes to the business or other risks described in the annual securities report for the previous fiscal year.」
The company states that there have been no material changes in the risks related to declining profitability due to inventory valuation losses and the accumulation of old products. - FY2019MaterialisedAnnual report
「The closing inventory of merchandise is stated at the amount after a write-down of its carrying value due to lower profitability, and an inventory valuation loss of ¥37.668 million was included in cost of sales for the fiscal year.」
An inventory valuation loss of ¥37.668 million was recorded due to lower merchandise profitability, and the company also worked to reduce inventory by selling through old products.