Increase in costs accompanying an accelerated pace of new store openings
First written in FY2017-Q3. 10 of 23 entries say "Materialised", first in FY2018-Q2. Latest entry: FY2026.
KeePer Technical Laboratory moved to the "Worse" side of this theme in 2017, 1 year before the typical company in this theme (2018).
The whole theme swung hardest in 2020: 6 of 21 companies on the "Worse" side.
3 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「Revenue in the KeePer LABO operations business was ¥14.028 billion, up 10.5% year on year, while operating profit was ¥2.170 billion, down 20.2%.」
The cost burden associated with new store openings and workforce expansion was reflected in full-year results as 10.5% revenue growth and a 20.2% decline in operating profit in the KeePer LABO operations business. - FY2026-H1MaterialisedAnnual report
「Revenue in the KeePer LABO operations business was ¥7.136 billion, up 7.9% year on year, while segment profit was ¥1.318 billion, down 21.6%.」
While revenue increased in the KeePer LABO operations business, segment profit declined 21.6% year on year. Costs associated with expansion, including expenses for countermeasures against the first quarter's heat and store-opening and workforce-related expenses, were reflected in profit. - FY2024MaterialisedAnnual report
「Revenue in the KeePer LABO operations business was ¥11.181 billion, up 15.8% year on year, while operating profit was ¥2.272 billion, down 14.0%. The decline in profit despite higher revenue was due to upfront increases in personnel expenses resulting from aggressive store expansion and workforce expansion to meet strong demand.」
Upfront personnel expenses associated with aggressive new store openings and workforce expansion were reflected in full-year results as 15.8% revenue growth and a 14.0% decline in operating profit in the KeePer LABO operations business. The impact of the cost burden associated with accelerated store openings was confirmed in the results. - FY2024-Q3MaterialisedAnnual report
「Revenue in the KeePer LABO operations business was ¥8.211 billion, up 16.9% year on year, while operating profit was ¥1.680 billion, down 12.3%. In the third-quarter accounting period from 1 January 2024 to 31 March 2024, revenue was ¥2.349 billion, up 7.8% year on year, and operating profit was ¥276 million, down 41.8%, resulting in higher revenue but lower profit. The main reason for the decline in profit despite higher revenue was the substantial increase in personnel expenses resulting from workforce expansion to support aggressive new store openings.」
The increase in personnel expenses associated with aggressive new store openings and workforce expansion was reflected in actual results as a 12.3% decline in cumulative operating profit in the KeePer LABO operations business and a 41.8% decline in operating profit for the third-quarter accounting period. - FY2023-Q3RestatedAnnual report
「New store openings this fiscal year have been delayed somewhat by higher material costs and extended lead times for store construction, but the plan to open 12 stores this fiscal year remains unchanged.」
Construction delays due to higher material prices and extended lead times continue to occur, but the plan to open 12 stores this fiscal year remains unchanged. - FY2022WorsenedAnnual report
「The cost of building new stores has increased, to approximately ¥65 million per location for a site requiring construction from vacant land and approximately ¥40 million per location for a fitted-out property with an existing building.」
New store opening costs increased from approximately ¥45 million for a new-build location and ¥35 million for a fitted-out location to approximately ¥65 million and ¥40 million, respectively. - FY2021MitigatedAnnual report
「As a result of the increase in personnel, personnel expenses in the KeePer LABO operations business rose 29.5%, while revenue increased 47.5% and operating profit, and consequently segment profit, increased substantially by 243.3%.」
Although personnel expenses increased 29.5% as a result of the workforce expansion, revenue in the KeePer LABO operations business rose 47.5% and operating profit increased 243.3%, indicating that the improvement in profitability exceeded the cost burden associated with store and workforce expansion. - FY2021-Q3MitigatedAnnual report
「Personnel expenses increased 21.7% during the cumulative third-quarter period. Compared with the 42.1% increase in revenue in the KeePer LABO operations business, personnel expenses rose only 21.7%, while operating profit and segment profit increased substantially by 244.4% to ¥954 million.」
Although personnel expenses increased 21.7%, revenue in the KeePer LABO operations business rose 42.1% and segment profit increased 244.4%. This indicates that revenue growth exceeded the cost burden associated with store and workforce expansion. - FY2020MitigatedAnnual report
「The KeePer LABO operations business opened only 2 stores in the previous fiscal year. As described above, this was a deliberate temporary restraint on new openings, intended to strengthen the Special Sales Division and allow stores opened during the concentrated opening period beginning 3 years ago to mature, thereby substantially improving profitability. As a result, operating profit in this segment improved significantly, increasing 45.3% year on year.」
Restricting new store openings to 2 in the previous fiscal year and prioritizing the maturation of stores opened during the concentrated opening period resulted in a 45.3% year-on-year increase in operating profit in the KeePer LABO operations business. The response to the cost burden associated with accelerated store openings is also reflected in full-year results. - FY2020-Q2MitigatedAnnual report
「No new stores have been opened so far this fiscal year. This is largely because the company has been devoting significant resources, including personnel, to expanding into the automotive industry, including car manufacturers and car dealerships.」
The company has deferred new store openings during the current fiscal year, thereby limiting additional costs associated with the pace of new openings. It explains that this is because it is concentrating resources, including personnel, on expanding into the automotive industry. - FY2019WorsenedAnnual report
「Constructing a new store costs approximately ¥45 million per location for a site requiring construction from vacant land, and approximately ¥35 million per location for a fitted-out property with an existing building.」
The cost per fitted-out location for a new store increased from the approximately ¥25 million previously indicated to approximately ¥35 million. While the company has responded by slowing the pace of store openings, the cost burden per store has increased. - FY2019-Q3MitigatedAnnual report
「By temporarily slowing the pace of new store development, the company has been able to allow stores that have already opened as new stores to mature, contributing to improved profitability for the company as a whole.」
The company explains that temporarily slowing the pace of new store development has provided time for existing new stores to mature, contributing to improved profitability for the company as a whole. While this indicates a response to the cost burden from accelerated store openings, segment profit in the KeePer LABO operations business declined 4.9% year on year. - FY2019-Q2MitigatedAnnual report
「Many of the new stores built during the concentrated opening periods in the previous and preceding fiscal years are now entering their second-year jump phase, contributing to improved profitability in the KeePer LABO operations business.」
The company explains that, while new stores have imposed a cost burden during the period of concentrated openings, existing new stores are entering their second-year growth phase and beginning to contribute to improved profitability. However, segment profit for the cumulative second-quarter period declined 15.6% year on year, and the company does not state that the impact of the cost burden has been eliminated. - FY2019-Q1WorsenedAnnual report
「As a result, revenue for the cumulative first quarter of the current fiscal year in this segment was ¥823 million, up 19.1% year on year, while segment profit was ¥18 million, down 70.1%. This included ¥45 million in expenses from intercompany transactions.」
While the increase in new stores boosted revenue in the KeePer LABO operations business, segment profit fell 70.1% year on year to ¥18 million. Profit pressure from the cost burden associated with store expansion is becoming increasingly significant. - FY2018MaterialisedAnnual report
「The stores opened during the current fiscal year have few repeat customers and were all loss-making, recording a combined loss of ¥99 million across 18 new stores. Among the 16 stores entering their second year, some were profitable and others were loss-making despite experiencing the second-year jump characteristic of KeePer LABO, and they recorded a combined loss of ¥38 million.」
The cost burden associated with personnel expenses, rent and other costs for new stores appeared in actual results as a combined loss of ¥99 million for 18 new stores and ¥38 million for 16 stores in their second year. - FY2018-Q3WorsenedAnnual report
「Selling, general and administrative expenses also increased as a result of the large number of new store openings. Personnel expenses rose by ¥85 million year on year in the third-quarter accounting period, rent increased by ¥25 million, and advertising expenses increased by ¥47 million. Advertising expenses rose because, instead of concentrating television commercial spending in April of the fourth quarter as in previous years, the company discontinued that approach and placed web advertisements and other advertising in March. As a result, selling, general and administrative expenses increased 20.1% year on year to ¥1.082 billion in the third-quarter accounting period, and operating profit was negative ¥31 million.」
In addition to higher personnel expenses and rent associated with new store openings, advertising expenses increased following a change in advertising methods. Selling, general and administrative expenses rose 20.1% year on year, and the quarterly operating loss was ¥31 million. The cost burden associated with accelerated store openings is having a more tangible impact on results. - FY2018-Q2MaterialisedAnnual report
「As a result, revenue for this segment during the cumulative second-quarter period was ¥1.565 billion, up 18.3% year on year, while segment profit was ¥239 million, down 4.6%.」
While revenue increased 18.3% year on year due to new store development, segment profit in the KeePer LABO operations business declined 4.6%. The risk that upfront store-opening costs would pressure profit materialized in the results. - FY2017WorsenedAnnual report
「Constructing a new store costs approximately ¥45 million per location for a site requiring construction from vacant land, and approximately ¥25 million per location for a fitted-out property with an existing building.」
The cost burden associated with accelerating new store openings was specified at approximately ¥45 million per new-build location and approximately ¥25 million per fitted-out location. - FY2017-Q3First statedAnnual report
「Plans are progressing to open new stores at a pace of 2 per month, so significantly higher costs are expected to arise. We believe management must be both cautious and bold, while maintaining strict discipline.」
The company expects significantly higher costs to arise as plans progress to open 2 stores per month, identifying the cost burden associated with accelerated store openings as a new management consideration.