Weak demand for car washing and coating services and low customer traffic due to unfavorable weather conditions

「特に需要の高い関東での異例の天候不順 (千葉での2か月連続の大水害、東京では35日間連続で雨を記録するなど) の影響が大きかった中、何とか前年をクリアできる実績となったことに対しては大健闘であったと考えております。」

「The first quarter began with a hot summer like the present one. We invested approximately ¥128 million in measures to address the heat. Unfortunately, 1 person suffered health problems, but overall, the measures proved effective, and we believe we were able to get through the exceptional heat.」

「In October, the first month of the second quarter, rainy weekends continued, making it difficult for demand to build for customers who wanted to keep their cars clean,」

「As with KeePer LABO, from January to March 2024, adverse weather and days with heavy snowfall continued for longer than usual, affecting the business.」

「However, this summer's exceptionally intense heat depleted the staff's physical strength.」

「The reason was that record heavy rain continued from before the Bon holiday, disasters began to occur, and customer sentiment cooled completely from the middle of the month onward.」

「The following 2 stores were scheduled to open during the current fiscal year, but store openings have been pushed into the next fiscal year due to delays in construction schedules caused by worsening weather conditions and delays in the timing of withdrawals from existing fitted-out properties.」

「In the KeePer LABO operating business, January was somewhat affected by increased rainfall, apparently due to the warm winter, compared with the previous fiscal year, but results in both February and March have been strong.」

「In the second-quarter accounting period (October 2019 to December 2019), revenue in October, the first month, was ¥612 million, down 11.0% year on year, as numerous large typhoons affected the country and record torrential-rain disasters compounded the difficulties. In November, unstable weather continued, resulting in a marginal 3.4% year-on-year increase in revenue to ¥775 million. However, in December, the peak demand month, weather stabilized and interest in coating and car washing rose sharply. The effects of television commercials, YouTube advertising and web advertising also became significant, and revenue reached ¥1,188 million, up 7.9% year on year.」

「In the KeePer LABO operating business, July was affected by a long rainy season compared with the previous fiscal year, but results in both August and September have been strong. In July, the start of the period, revenue was ¥714 million, down 5.9% year on year, reflecting some difficulty. In August, however, weather stabilized as expected for summer, and customers flocked to both KeePer Pro Shops and KeePer LABO locations, creating considerable activity. Revenue increased 14.5% year on year to ¥772 million.」

「December, the peak demand month for the KeePer LABO operating business, began slowly. First, record warm winter weather meant that dew and frost, which soil cars during winter, did not form, so cars remained clean. Rain was forecast and actually fell continuously from the weekend of the first week into the following week, and rainy weather continued through the second week. As a result, there were consecutive days when the number of car washes did not increase at all, and as of 10 December, sales at existing stores with prior-year results were up 3.0% from the same day of the previous month. When rainy weather continues through the second week, the resulting decline in customers' desire to keep their cars clean is far from negligible. As of 15 December, sales at existing stores with prior-year results were down 10.0% from the same day of the previous month, which was a source of considerable concern.」

「However, in the final month, September, abnormal weather rarely seen in the history of observations struck the Japanese archipelago, with large typhoons hitting every weekend. Nationwide weather conditions were extremely severe, and in Nagoya, where we have the largest number of directly operated stores, rainfall reached 365.5 mm, or 340% of the previous year's level. As customer visits fell sharply, revenue declined 5.8% year on year to ¥505 million, while we recorded an operating loss of ¥16 million and an ordinary loss of ¥14 million for the month.」

「In January and February of the third quarter (1 January 2018 to 31 March 2018), weather conditions were unfavorable, and the KeePer LABO operating business performed poorly, with existing stores that had comparable prior-year results falling below the previous year for 2 consecutive months.」

「However, following the record bad weather in July and August that affected the first quarter (1 July 2017 to 30 September 2017), the second quarter (1 October 2017 to 31 December 2017) also struggled as unprecedented bad weather hit in October, its first month, when 3 typhoons made landfall during the month, coinciding with weekends. From November, by contrast, fine weather continued, customer visits rose sharply, and KeePer Pro Shops and KeePer LABO locations throughout Japan became lively, with business activity strong enough to recover all of the shortfall from October.」

「However, in the first quarter, unsettled weather continued through July and August, with August marked by an unprecedented run of consecutive rainy days. As a result, cumulative first-quarter revenue edged up 0.8% year on year to ¥1,750 million, while operating profit declined 14.8% year on year to ¥209 million,」

「The first half of the cumulative second-quarter period was affected by adverse weather, but weather conditions were relatively stable in the second half, enabling us to achieve solid results.」

「Typhoons made landfall almost every week in eastern Japan during the latter half of August, and weather conditions nationwide were severe in September, with sunshine hours at approximately 60% of the previous year's level. Overall, interest in car washing and coating services did not increase, and the number of customer visits also remained sluggish.」