Risk of disruptions to sales, production, and transportation due to weather and natural disasters

「The apparel industry experienced significant temperature fluctuations throughout the year, resulting in unstable sales trends for seasonal products.」

「Meanwhile, demand for long-sleeved shirts on major e-commerce marketplaces remained weak because of the record-breaking heat, creating difficult conditions.」

「The apparel industry faced a difficult operating environment because of the effects of climate factors such as extremely hot summers and unusually warm winters.」

「In casual wear, temperatures did not rise even after March began, causing some spring merchandise to struggle. However, 3WAY outerwear and other items introduced from the autumn/winter season performed well, and products suitable for year-round wear remained strong.」

「Dress shirts faced some difficulties because of the lingering summer heat affecting 2023 autumn/winter merchandise. However, the gross margin improved as a result of the benefits of ongoing negotiations over delivery prices since the previous fiscal year and a review of the company’s foreign exchange hedging methods. In casual wear, cold-weather outerwear was affected by the unusually warm winter, but shirt jackets performed well, and products made with heavier shirt fabrics are expanding.」

「Spring/summer merchandise for 2023 performed broadly in line with plan, helped in part by the extremely hot weather, particularly strong sales of dress shirts.」

「There is a risk that sales will remain weak because of extreme weather resulting from recent climate change and global warming.」

「The second quarter is normally the transition period between summer and autumn merchandise, but summer merchandise performed well this year, partly because of favourable weather.」

「In the mass-retail channel, the number of SHIRT HOUSE concession counters increased by 1, from 96 at the end of the previous consolidated fiscal year to 97. Profitability is improving as favourable weather helped summer merchandise sales grow strongly.」

「The company was forced to operate under difficult conditions because of the impact of COVID-19 lockdowns in ASEAN countries and product delivery delays resulting from the container shortage.」

「The apparel industry also remained in a difficult environment, with consumer demand still weak because of declining consumer sentiment, concerns about the spread of infection, and the effects of unseasonable weather.」

「However, sales in the second quarter declined year on year because department stores and commercial facilities closed to prevent the spread of COVID-19, delaying new summer merchandise launches; unseasonable weather, including the delayed end of the rainy season and torrential rain in July and August; voluntary restrictions on going out, particularly in urban areas; and the cancellation of large-scale events, mainly at department stores.」

「In the second half, apparel sales remained in an extremely difficult environment. The autumn/winter merchandise season was weak because of the decline in consumer sentiment following the consumption tax increase, successive natural disasters such as typhoons that made landfall, and the effects of the unusually warm winter.」

「From November through the latter half of December, minimum temperatures did not fall and relatively warm weather continued. As a result, the autumn/winter merchandise season remained weak, creating extremely difficult conditions for apparel sales.」

「The apparel industry, including the company’s business, remained in a difficult environment because consumer clothing purchases became more diversified, consumer sentiment weakened because of natural disasters such as typhoons and torrential rain, and consumers continued to favour frugality. Under these operating conditions, our group struggled during the first half of the summer merchandise season because of the cool summer and other factors, although」

「During the nine months of the first quarter of the current fiscal year, our group’s summer merchandise sales were below expectations because of lower temperatures caused by an influx of cold air. Sales to department stores, however, remained strong, and net sales and gross profit increased.」

「In the first half, Domestic Sales volumes remained sluggish due not only to lower sales from directly operated stores and casual concept stores that were exited in the previous fiscal year, and lower sales to department stores, but also to store closures at customers caused by natural disasters such as the typhoons and earthquakes that occurred frequently in the second quarter, and the resulting decline in consumer sentiment. From the second half onward, sales of autumn and winter products also remained weak because of the mild winter and other factors, increasing in-store inventories and affecting the delay in our introduction of spring products and the initial introduction of summer products compared with the same period of the previous year.」

「In the third quarter, sales volumes also declined year on year, partly because of the unusually warm weather in early winter.」

「Under these operating conditions, our group’s domestic sales volumes decreased year on year. In addition to the decline in sales from directly operated stores and casual concession counters that were closed during the previous fiscal year, sales to department stores declined, while stores operated by customers were closed because of natural disasters, including the typhoons and earthquakes that occurred frequently in the second quarter. Consumer sentiment also weakened as a result.」

「Irregular summer weather caused summer products to perform poorly, while low temperatures in early spring delayed the rollout of spring products, significantly affecting sales during the respective seasonal selling months.」

「While irregular summer weather caused summer products to perform generally poorly, an early decline in temperatures in early winter led to steady sales of winter apparel, including outerwear.」

「In addition, although the rollout of autumn products was smooth due to falling temperatures from September onward, temperatures did not rise during the full-price selling period for summer products, and sales of summer products remained sluggish.」

「In addition, temperatures did not rise during the full-price selling period for summer products, and summer products struggled at retail during the quarter.」

「In the apparel industry in which our group operates, headwinds from weather conditions continued, including severe lingering summer heat, a mild winter and the late arrival of spring, resulting in serious weakness in in-store sell-through and an increase in inventories.」

「The operating environment became difficult from a weather perspective, due to the delay in the rollout of autumn products caused by the prolonged severe late-summer heat and the tendency toward warmer-than-usual weather in early winter.」

「Although the prolonged severe late-summer heat helped clear the remaining summer products this fiscal year, the in-store rollout of autumn products has been significantly delayed compared with a normal year.」

「In contrast to last year, when summer products performed well due to high temperatures from the beginning of the fiscal year, this year's summer products have had a very slow start because days of high temperatures did not continue, among other factors.」

「Typhoons, earthquakes, and other natural disasters may cause sales at the retail stores to which we sell to stagnate, or may depress consumption overall. In addition, natural disasters such as typhoons in countries where our overseas plants are located or along transportation routes to Japan may delay production or transportation.」