Profit Pressure from Rising Labor and Logistics Costs
First written in FY2019-Q3. 15 of 22 entries say "Worsened", first in FY2019. Latest entry: 2026-08-07.
Smc moved to the "Worse" side of this theme in 2019, 2 years before the typical company in this theme (2021).
The whole theme swung hardest in 2022: 64 of 103 companies on the "Worse" side.
31 other companies' latest entry also says "Restated".
- 2026-08-07RestatedFinancial Results Presentation
「< SG&A expenses > Personnel expenses -10, logistics expenses -10, R&D expenses -7」
Personnel expenses, logistics expenses and R&D expenses were shown as negative year-on-year factors affecting the change in operating profit, with cost pressures continuing to be reported. - FY2026RestatedAnnual report
「Operating profit was ¥190,558 million, up 0.2% year on year. Higher cost ratios, personnel expenses and depreciation resulted in a level broadly in line with the previous fiscal year.」
Higher cost ratios, personnel costs and depreciation and amortization continued to pressure profit. Operating income was ¥190,558 million, up only 0.2% from the previous period, indicating that cost pressures continued. - FY2026-H1WorsenedAnnual report
「Operating income was ¥90,780 million, down 8.8%. The main factors behind the decline were a higher cost ratio and increased depreciation and amortization.」
A higher cost ratio and increased depreciation and amortization associated with capital investment pressured profit, and operating income fell 8.8% year on year. Cost pressures materialized in the results for the current interim consolidated accounting period. - FY2025WorsenedAnnual report
「Operating income was ¥190,244 million, down 3.0%. The main factors behind the decline were a higher cost ratio and higher selling, general and administrative expenses, including personnel and repair costs.」
Higher cost ratios, personnel costs and repair costs, among others, pressured full-year profit, and operating income fell 3.0% year on year. - FY2025-H1WorsenedAnnual report
「Operating income was ¥99,497 million, down 5.4%. The main factors behind the decline were a higher cost ratio and higher selling, general and administrative expenses due to increased personnel costs, taxes and dues, and other factors.」
A higher cost ratio and higher selling, general and administrative expenses resulting from personnel costs, taxes and dues, and other factors pressured profit, and operating income fell 5.4% year on year. The theme of cost pressure from personnel, logistics and other costs continued. - FY2024WorsenedAnnual report
「Operating income was ¥196,226 million, down 24.0%. Profit declined from the previous period due mainly to higher manufacturing costs and expenses, driven by lower sales volumes of products and other items and higher raw material, personnel, and depreciation and amortization costs.」
In addition to lower sales volume, higher raw material and personnel costs and higher depreciation and amortization associated with capital investment pressured full-year profit, and operating income fell 24.0% year on year. - FY2024-Q3RestatedAnnual report
「Operating income was ¥155,191 million, down 21.5%. The main factors behind the decline were lower gross profit resulting from lower sales volumes of products and other items and a higher cost ratio, as well as higher selling, general and administrative expenses due to increased personnel costs, travel and transportation expenses, depreciation and amortization, and R&D expenses.」
In addition to lower sales volume and a higher cost ratio, higher personnel costs, travel and transportation expenses, depreciation and amortization, and R&D expenses continued to pressure profit, and operating income fell 21.5% year on year. Existing cost pressures continued to emerge. - FY2024-Q2WorsenedAnnual report
「Operating income was ¥105,124 million, down 21.3%. The main factors behind the decline were lower gross profit resulting from lower sales volumes of products and other items and a higher cost ratio, as well as higher selling, general and administrative expenses due to increased personnel costs, travel and transportation expenses, depreciation and amortization, and R&D expenses.」
In addition to lower sales volume and a higher cost ratio, higher personnel costs, travel and transportation expenses, depreciation and amortization, and R&D expenses pressured profit, and operating income fell 21.3% year on year. The impact of cost pressures continued. - FY2024-Q1WorsenedAnnual report
「Operating income was ¥56,105 million, down 17.5% year on year, resulting in lower profit mainly due to a decline in gross profit from lower sales volume, higher personnel costs for employees and others, higher depreciation and amortization resulting from increased capital investment, and higher selling, general and administrative expenses due to more active sales activities following the lifting of COVID-19 restrictions.」
Higher personnel costs, higher depreciation and amortization resulting from increased capital investment, and higher SG&A expenses due to more active sales activities emerged as sources of profit pressure, and operating income fell 17.5% year on year. - FY2023RestatedAnnual report
「Selling, general and administrative expenses were ¥162,958 million, up 19.8%, mainly due to higher transportation, personnel and IT-related costs, and the SG&A expense ratio rose 1.1 percentage points to 19.8%.」
Higher transportation, personnel and IT-related costs continued to emerge as sources of cost pressure. Meanwhile, operating income increased 13.3% due to higher sales, and the operating margin was 31.3%, roughly unchanged from the previous period. - FY2023-Q3RestatedAnnual report
「Selling, general and administrative expenses increased due to higher transportation, personnel and IT-related costs, but operating income rose to ¥197,811 million, up 12.9%, as higher sales increased profit.」
Higher transportation, personnel and IT-related costs continued to push up selling, general and administrative expenses. Meanwhile, operating income increased 12.9% year on year due to higher sales. - FY2023-Q2WorsenedAnnual report
「Selling, general and administrative expenses increased due to higher transportation, personnel and IT-related costs, but operating income rose to ¥133,649 million, up 13.2%, as higher sales increased profit.」
Higher transportation, personnel and IT-related costs pushed up selling, general and administrative expenses, with higher costs continuing to emerge as a source of profit pressure. Meanwhile, operating income increased due to higher sales. - FY2023-Q1WorsenedAnnual report
「Selling, general and administrative expenses increased due to higher personnel costs and other factors, but operating income rose to ¥67,975 million, up 18.5%, as higher sales increased profit.」
Higher personnel costs continued to emerge as a factor behind the increase in selling, general and administrative expenses. The company explained that operating income increased due to higher sales. - FY2022WorsenedAnnual report
「Although sales declined in the first half of the current period, … the gross profit margin rose 1.9 percentage points to 50.0% from the previous period. Selling, general and administrative expenses were ¥135,993 million, up 20.9%, mainly due to higher personnel costs, while the SG&A expense ratio fell 1.7 percentage points to 18.7% as sales increased.」
In addition to higher personnel costs, raw material prices and logistics costs continued to rise. Higher sales improved the gross profit margin and SG&A expense ratio, but higher costs continued to be identified as a source of profit pressure. - FY2022-Q2WorsenedAnnual report
「During the cumulative second quarter of the current consolidated fiscal year (1 April 2021 to 30 September 2021), economic activity resumed in various countries as COVID-19 vaccinations progressed, and investment appetite recovered across the manufacturing sector. However, uncertainty about the outlook continued due to the renewed spread of infections caused by variants, semiconductor shortages, soaring raw material prices, logistics disruptions and power shortages in China, among other factors.」
Soaring raw material prices and logistics disruptions were explicitly added to the existing theme of cost pressure from personnel, logistics and other expenses. Uncertainty about the outlook continued, including semiconductor shortages and power shortages in China. - FY2021WorsenedAnnual report
「The gross profit margin fell 1.3 percentage points to 48.1% from the previous period due to higher temporary staffing costs to address a surge in orders toward the end of the period, as well as soaring material prices and logistics costs.」
Higher temporary staffing costs, material prices and logistics costs continued, reducing the gross profit margin from 49.4% to 48.1%. Meanwhile, operating income increased due to lower SG&A expenses and higher sales. - FY2020WorsenedAnnual report
「Gross profit was ¥259,852 million, down 12.5% year on year. … The gross profit margin fell 2.0 percentage points to 49.4%. Selling, general and administrative expenses were ¥113,597 million, down 2.6%, while the SG&A expense ratio rose 1.4 percentage points to 21.6% as a result of lower sales. Operating income was ¥146,254 million, down 18.8%, and the operating margin fell 3.4 percentage points to 27.8%.」
Higher fixed-cost and SG&A expense ratios resulting from lower sales reduced the gross profit and operating margins, confirming profit pressure for the full year. - FY2020-Q3WorsenedAnnual report
「Net sales were ¥395,935 million, down 10.9% year on year, while operating income was ¥110,141 million, down 21.8%, mainly due to a higher fixed-cost burden ratio resulting from lower sales.」
The higher fixed-cost burden ratio resulting from lower sales was identified as a factor behind the decline in operating income. Net sales fell 10.9% year on year and operating income fell 21.8%, with cost pressures continuing to weigh on profitability. - FY2019WorsenedAnnual report
「Gross profit was ¥296,843 million, down 2.6% year on year. In addition to higher temporary staffing costs to address a temporary surge in orders, gross profit was negatively affected by soaring material prices, but these effects were absorbed through rationalization and cost-cutting efforts, leaving the gross profit margin unchanged from the previous period at 51.5%. Selling, general and administrative expenses were ¥116,640 million, up 3.9%, and the SG&A expense ratio rose 1.2 percentage points to 20.2% due to higher logistics-related costs and other factors. Operating income was ¥180,203 million, down 6.4%, and the operating margin fell 1.3 percentage points to 31.2%.」
Higher temporary staffing costs, material prices and logistics costs pressured full-year profit. Rationalization and cost-cutting maintained the gross profit margin, but SG&A expenses rose 3.9% and operating income fell 6.4%. - FY2019-Q3First statedAnnual report
「Under these circumstances, the group's net sales amounted to ¥444,197 million, up 1.2% year on year, but operating income was ¥140,863 million, down 2.1%, due mainly to higher personnel and logistics costs. Ordinary income was ¥154,319 million, down 1.9%, mainly due to lower foreign exchange gains. Income before income taxes was ¥154,470 million, down 1.3%, and net income attributable to owners of the parent was ¥108,656 million, down 4.7%.」
Higher personnel and logistics costs were identified for the first time as factors behind the decline in operating income. While net sales increased, operating income fell 2.1% year on year. Higher costs emerged as an actual source of profit pressure.