Risk of direct-sales expansion measures failing to deliver results
First written in FY2021. 10 of 20 entries say "Materialised", first in FY2023-Q1. Latest entry: 2026-11-13.
The whole theme swung hardest in 2018: 1 of 6 companies on the "Worse" side.
1 other company's latest entry also says "Mitigated".
- FY2026MaterialisedAnnual report
「Selling, general and administrative expenses amounted to ¥6,938.839 million, an increase of ¥1,960.670 million from the previous fiscal year. This was mainly attributable to increases in advertising and logistics expenses associated with acquiring more new customers through direct sales, as well as higher personnel expenses resulting from active investment in human resources. As a result, operating profit amounted to ¥685.387 million, down ¥261.066 million from the previous fiscal year.」
Advertising, logistics and personnel expenses associated with expanding direct sales increased throughout the fiscal year, and operating profit declined 27.6% year on year. Advertising expenses amounted to ¥3,992.078 million. - FY2026-H1MaterialisedAnnual report
「Operating profit declined year on year due to the aggressive use of advertising expenses aimed at increasing new customer acquisition through direct sales (EC). Advertising expenses ¥3,134.471 million Operating loss: ¥692.108 million (operating loss of ¥157.056 million in the same period of the previous year)」
Advertising expenses rose to ¥3,134.471 million from ¥1,818.657 million in the same period of the previous year. The advertising cost burden associated with expanding direct-to-consumer EC sales was reflected in the operating loss of ¥692.108 million. - FY2025MaterialisedAnnual report
「Selling, general and administrative expenses were ¥4,978.169 million, an increase of ¥867.656 million from the previous fiscal year. This was mainly due to higher advertising expenses associated with the increase in new customer acquisitions through direct sales and higher personnel expenses resulting from active investment in human resources. As a result, operating profit was ¥946.454 million, a decrease of ¥14.080 million from the previous fiscal year.」
Advertising expenses associated with expanding direct sales increased to ¥2,643.603 million. While net sales rose 12.5%, operating profit declined 1.5%. The earnings burden from sales expansion initiatives was incurred throughout the fiscal year. - FY2025-H1MaterialisedAnnual report
「Operating profit decreased year on year because substantial advertising expenses were incurred as the number of new customers acquired through direct sales (EC) increased. Advertising expenses ¥1,818.657 million Operating loss of ¥157.056 million (operating profit of ¥222.913 million in the same period of the previous year)」
The number of new customers acquired through direct sales EC reached a record high, while advertising expenses increased to ¥1,818.657 million and the company recorded an operating loss of ¥157.056 million. The profit burden from advertising-driven sales expansion was again reflected in the results. - FY2024-Q3MitigatedAnnual report
「Selling, general and administrative expenses increased at a slower rate than revenue because advertising expenses incurred when acquiring customers were restrained.」
Advertising expenses incurred when acquiring customers remained restrained. Revenue increased 19.2% year on year, while operating profit increased 132.8% year on year. This indicates that the profit burden from advertising-driven sales expansion declined further. - FY2024-Q2MitigatedAnnual report
「Selling, general and administrative expenses increased at a slower rate than revenue because advertising expenses incurred when acquiring customers were restrained. As a result, operating results for the cumulative second quarter period were revenue of ¥3,746.850 million, up 18.9% year on year, and operating profit of ¥222.913 million, compared with an operating loss of ¥130.588 million in the same period of the previous year.」
Advertising expenses incurred when acquiring customers were restrained, resulting in slower growth in selling, general and administrative expenses than in revenue. Operating profit also recovered to positive territory from a loss in the same period of the previous year. - FY2024-Q1MitigatedAnnual report
「The company aired new television commercials aimed at further increasing awareness of its eggshell membrane serum, but the number of new customers acquired through direct sales (EC) decreased year on year. However, revenue increased year on year as the expansion of the recurring customer base and the higher recurring customer retention rate in the previous year proved effective. Selling, general and administrative expenses increased at a slower rate than revenue because advertising expenses incurred when acquiring customers were restrained, reducing the loss.」
Although new customer acquisitions declined while television commercials were being aired, advertising expenses incurred when acquiring customers were restrained, and the operating loss narrowed from ¥340.176 million in the same period of the previous year to ¥67.756 million. The profit burden from advertising-driven sales expansion remained, but the burden declined during the quarter. - FY2023MaterialisedAnnual report
「Selling, general and administrative expenses were ¥3,518.442 million, an increase of ¥1,033.152 million from the previous fiscal year. This was mainly due to higher advertising and other expenses associated with the increase in new customer acquisitions through direct sales. As a result, operating profit was ¥831.726 million, a decrease of ¥4.006 million from the previous fiscal year.」
Advertising expenses associated with the expansion of direct sales were ¥1,761.017 million. Operating profit decreased 0.5% year on year alongside the increase in new customer acquisitions. The profit burden from advertising-driven sales expansion was reflected in full-year results. - FY2023-Q3MaterialisedAnnual report
「Revenue increased as the number of new direct-sales customers expanded following the airing of television commercials aimed at raising awareness of the eggshell membrane serum. However, profit declined because advertising expenses were incurred temporarily and in substantial amounts.」
New customer acquisitions increased through television commercials, while temporary and substantial advertising expenses were incurred, and operating profit fell 52.8% year on year to ¥293.168 million. The profit burden from advertising-driven sales expansion continued to be reflected in the results. - FY2023-Q2MaterialisedAnnual report
「Television commercials aimed at further increasing awareness of the eggshell membrane serum expanded new customer acquisitions through direct sales, increasing revenue. However, profit declined because temporary and substantial advertising expenses were incurred.」
New customer acquisitions increased through television commercials, while advertising expenses of ¥1,277.044 million were incurred and the company recorded an operating loss of ¥130.588 million. The profit burden from advertising-driven sales expansion was reflected in the results. - FY2023-Q1MaterialisedAnnual report
「Revenue increased as the number of new direct-sales customers expanded following the airing of television commercials aimed at raising awareness of the eggshell membrane serum. However, profit declined because advertising expenses were incurred temporarily and in substantial amounts.」
Customer acquisition through advertising initiatives increased, but temporary and substantial advertising expenses were incurred, reducing profit. The results reflected the burden of advertising expenses rather than insufficient advertising effectiveness. - FY2022RestatedAnnual report
「If advertising does not produce sufficient results, costs increase, or the investment period extends beyond expectations, making it impossible to generate the planned returns, this could affect the company's business performance.」
The company continued to describe the risks of advertising investments failing to deliver results and rising costs, and reported advertising expenses of ¥1,107.378 million for the fiscal year ended March 2022, along with its policy of verifying their effectiveness. - FY2021First statedAnnual report
「If advertising does not produce sufficient results, costs increase, or the investment period extends beyond expectations, making it impossible to generate the planned returns, this could affect the company's business performance.」
The company planned to continue investing in advertising to expand direct sales. Advertising expenses for the fiscal year ended March 2021 were ¥1,014.869 million.