Impact of inventory obsolescence and write-downs on gross profit
First written in FY2021. 12 of 24 entries say "Worsened", first in FY2022-Q2. Latest entry: 2026-10-16.
Baroque Japan Limited moved to the "Worse" side of this theme in 2021, 3 years before the typical company in this theme (2024).
The whole theme swung hardest in 2018: 11 of 37 companies on the "Worse" side.
41 other companies' latest entry also says "Worsened".
- FY2027-H1MaterialisedAnnual report
「Gross profit was below the level of the previous corresponding period due to an increase in inventory valuation losses for the core SC brand and higher costs across the entire supply chain.」
Inventory valuation and obsolescence risks actually affected gross profit through increased inventory valuation losses for the core SC brand. The inventory balance also increased from ¥5,003 million at the end of the previous fiscal year to ¥5,130 million. - FY2026MitigatedAnnual report
「Inventory (after write-down) 5,359 5,003 Write-downs due to a decline in the profitability of inventory recognized in cost of sales (Note) 975 748」
The inventory balance decreased from ¥5,359 million to ¥5,003 million, while write-downs decreased from ¥975 million to ¥748 million. Inventory valuation risk remains, but the amount realized decreased. - FY2026-H1MitigatedAnnual report
「Gross profit on sales was supported by tighter, systematic procurement controls and the promotion of early conversion of inventory into cash in line with inventory conditions, which significantly curbed inventory valuation losses year on year.」
The decline in inventory valuation losses was significantly contained year on year, while the inventory balance also decreased from ¥5,359 million at the end of the previous fiscal year to ¥5,151 million. The effectiveness of measures to address the risk of inventory obsolescence and valuation losses was demonstrated. - FY2025MitigatedAnnual report
「Merchandise (after write-downs) 5,489 5,359 Write-down of merchandise recognised in cost of sales due to declining profitability (Note) 1,116 975」
The merchandise balance decreased from ¥5.489 billion to ¥5.359 billion, while the write-down due to declining profitability decreased from ¥1.116 billion to ¥975 million. However, valuation loss risk related to competition, weather and trends continues to be treated as a material accounting estimate. - FY2025-H1MaterialisedAnnual report
「In addition, higher procurement cost ratios, sluggish growth in sale revenue, and an expansion in inventory valuation losses affected gross profit.」
The company stated that the increase in merchandise valuation losses had actually affected gross profit, indicating that the risk of inventory obsolescence and write-downs had continued to materialise. - FY2025-Q1WorsenedAnnual report
「This was mainly due to a ¥1.972 billion decrease in cash and deposits, a ¥1.550 billion increase in accounts receivable, an ¥800 million increase in merchandise and a ¥348 million increase in intangible assets, among other factors.」
The merchandise balance increased by ¥800 million from ¥5.489 billion at the end of the previous fiscal year to ¥6.290 billion, increasing exposure to the risk that inventory obsolescence and write-downs will affect gross profit. - FY2024Inventory balance declined while write-downs increasedAnnual report
「Merchandise (after write-downs) 5,917 5,489 Write-down of merchandise recognised in cost of sales due to declining profitability (Note) 478 1,116」
The merchandise balance decreased from ¥5.917 billion to ¥5.489 billion, while the write-down due to declining profitability increased from ¥478 million to ¥1.116 billion, bringing the inventory valuation risk into the reported results. - FY2024-Q3WorsenedAnnual report
「This was mainly due to a ¥4.440 billion decrease in cash and deposits, a ¥3.886 billion increase in accounts receivable, a ¥1.992 billion increase in merchandise, a ¥663 million increase in property, plant and equipment and a ¥651 million increase in intangible assets, among other factors.」
The merchandise balance increased by ¥1.992 billion from ¥5.917 billion at the end of the previous fiscal year to ¥7.909 billion, further increasing exposure to the risk that inventory obsolescence and write-downs will affect gross profit. - FY2024-Q2WorsenedAnnual report
「Merchandise 5,917 6,018」
The merchandise balance increased by ¥101 million from ¥5.917 billion at the end of the previous consolidated fiscal year to ¥6.018 billion. Exposure to the risk that inventory obsolescence and write-downs will affect gross profit has increased. - FY2024-Q1WorsenedAnnual report
「This was mainly due to a ¥3.083 billion decrease in cash and deposits, a ¥1.692 billion increase in accounts receivable, a ¥946 million increase in merchandise and a ¥499 million increase in property, plant and equipment, among other factors.」
The merchandise balance increased by ¥946 million from ¥5.917 billion at the end of FY2023 to ¥6.863 billion, increasing exposure to the risk that inventory obsolescence and write-downs will affect gross profit. - FY2023Inventory balance increased while write-downs declinedAnnual report
「Merchandise (after write-downs) 5,550 5,917 Write-down of merchandise recognised in cost of sales due to declining profitability (Note) 1,413 478」
The merchandise balance increased from ¥5.550 billion to ¥5.917 billion, while the write-down due to declining profitability decreased from ¥1.413 billion to ¥478 million. Inventory exposure increased. - FY2023-Q3WorsenedAnnual report
「This was mainly due to a ¥3.431 billion decrease in cash and deposits, a ¥2.004 billion increase in notes and accounts receivable and a ¥2.039 billion increase in merchandise, among other factors.」
The merchandise balance increased by ¥2.039 billion from the end of the previous fiscal year, increasing exposure to the risk that inventory obsolescence and write-downs will affect gross profit. - FY2022WorsenedAnnual report
「Merchandise on the consolidated balance sheet amounted to ¥5.550 billion at the end of the consolidated fiscal year. During the consolidated fiscal year, the write-down of merchandise recognised in cost of sales due to declining profitability amounted to ¥1.413 billion.」
The merchandise balance increased from ¥4.918 billion at the end of the previous fiscal year to ¥5.550 billion, increasing exposure to the risk of inventory obsolescence and write-downs. A ¥1.413 billion write-down was recorded due to declining profitability. - FY2022-Q3WorsenedAnnual report
「This was mainly due to a ¥3.993 billion decrease in cash and deposits, while notes and accounts receivable increased by ¥2.826 billion and merchandise increased by ¥2.682 billion, among other factors.」
The merchandise balance increased by ¥2.682 billion from the end of the previous consolidated fiscal year to ¥7.6 billion, increasing exposure to the risk that inventory obsolescence and write-downs will affect gross profit. - FY2022-Q2WorsenedAnnual report
「This was mainly due to a ¥2.815 billion decrease in cash and deposits and a ¥953 million increase in merchandise, among other factors.」
The merchandise balance increased by ¥953 million from ¥4.918 billion at the end of FY2021 to ¥5.871 billion. Exposure to the existing risk that inventory obsolescence and valuation will affect gross profit has increased. - FY2021First statedAnnual report
「The carrying amount of merchandise was ¥4.918 billion at the end of the consolidated fiscal year, and the company recognises that its value will decline over time. ... Depending on future market trends and inventory conditions, gross profit in the next consolidated fiscal year and beyond may be materially affected, and this entails uncertainty.」
The decline in inventory value over time and the impact of market trends and inventory conditions on gross profit were disclosed separately as risks for the first time, and a ¥1.689 billion inventory write-down was recorded during the fiscal year.