Declining Selling Prices and Margin Compression Due to Intensifying Price Competition
First written in FY2019. 12 of 15 entries say "Worsened", first in FY2020-Q1. Latest entry: FY2026-H1.
Optoelectronics moved to the "Worse" side of this theme in 2022, 3 years after the typical company in this theme (2019).
The whole theme swung hardest in 2026: 38 of 84 companies on the "Worse" side.
33 other companies' latest entry also says "Worsened".
- FY2026-H1WorsenedAnnual report
「This was primarily due to an ¥87 million decline in gross profit resulting from lower gross profit margins caused by rising raw material prices, among other factors.」
The ¥87 million decline in gross profit due to higher raw material prices exceeded selling, general and administrative expense reductions and contributed to the widening operating loss. - FY2025WorsenedAnnual report
「Profitability has declined particularly in the Group's overseas business, while the proportion of interest-bearing debt in the Group's consolidated liabilities remains high.」
The decline in overseas business profitability was identified as an issue requiring attention, while margin compression due to price competition, higher component prices and difficulty passing costs on to selling prices has continued. - FY2024WorsenedAnnual report
「Although the difficulties in procuring key components that had continued since the fiscal year ended November 2022 have been resolved within the group, the United States and Europe, Asia and other regions have been affected by the industry downturn, while inventory adjustments continue at major business partners in Japan.」
Even after supply constraints were resolved, the industry downturn, customer inventory adjustments and declining demand continued. Sales fell 7.8%, and the operating loss widened. - FY2024-Q2WorsenedAnnual report
「Although raw material prices remain high, the Company has been unable to fully pass the increases through to selling prices due to price competition and other factors. As a result, the cost-of-sales ratio continued to rise and profit decreased year on year.」
The Company was unable to pass persistently high raw material prices fully on to selling prices, and the resulting continued increase in the cost-of-sales ratio led to a year-on-year decline in profit. - FY2024-Q1WorsenedAnnual report
「Although the Company is working to optimize selling prices, raw material prices for its products remain high, and the cost-of-sales ratio continues to rise.」
Although the Company has pursued appropriate selling prices, raw material prices have remained elevated and the cost-of-sales ratio has continued to rise. Margin compression due to pricing was also evident in the current quarter. - FY2023WorsenedAnnual report
「While component prices remain elevated, passing these costs on to selling prices has been difficult, and margin compression is progressing rapidly. Price competition is also intensifying, making differentiation from competitors a challenge.」
The Company has been unable to pass persistently high raw material and component prices on to selling prices, and margin compression and intensifying price competition have continued. - FY2023-Q3WorsenedAnnual report
「Raw material prices have also remained elevated, increasing manufacturing costs, while the Company continues to face difficulty revising selling prices due to price competition and other factors.」
Manufacturing costs continued to rise due to persistently high raw material prices, while revising selling prices remained difficult due to price competition and other factors, indicating pressure on margins. - FY2023-Q2WorsenedAnnual report
「In the US and Europe, Asia and other regions, sales declined due to intensified price competition with competitors and other factors.」
Intensifying price competition resulted in a decline in overseas sales. Sales fell 5.4% in the United States and 7.7% in Europe, Asia and other regions. - FY2022WorsenedAnnual report
「In addition to the aforementioned decline in sales, the difficulty in procuring raw materials, particularly semiconductor components, and rising prices caused the cost-of-sales ratio to rise rapidly across the Group's companies.」
In addition to margin compression from price competition, difficulty in procuring raw materials and rising prices resulted in a rapid increase in the cost-of-sales ratio. - FY2022-Q3WorsenedAnnual report
「The main factor was a decline in product margins due to soaring raw material and other prices.」
Soaring raw material and other prices materialised as lower product margins and became a factor behind lower profit. - FY2021WorsenedAnnual report
「Margins are being compressed rapidly as price competition intensifies worldwide.」
The intensification of price competition and margin compression were emphasised as ongoing external-environment challenges, rather than merely as historical declines in selling prices. - FY2020-Q3RestatedAnnual report
「Europe, Asia and other markets were most severely affected by COVID-19, and sales have continued to decline, reflecting lower selling prices and stagnant sales and marketing activities.」
Lower selling prices and stagnant sales and marketing activities continue to be cited as factors related to lower sales and margin compression in Europe, Asia and other markets. - FY2020-Q2RestatedAnnual report
「Europe, Asia and other markets were most severely affected by COVID-19. Sales declined year on year, reflecting lower selling prices due to the slowdown in the European economy and stagnant sales and marketing activities.」
Lower selling prices accompanying the slowdown in the European economy and stagnant sales and marketing activities continue to appear in results as risks related to price competition and margin compression. - FY2020-Q1WorsenedAnnual report
「The main factors were a substantial decline in profit margins due to pressure on prices and a ¥207 million year-on-year increase in selling, general and administrative expenses in connection with the company's response to a patent infringement lawsuit filed by HONEYWELL in the US on 31 May 2019.」
The decline in selling prices due to price competition cited in the previous fiscal year became a factor behind lower sales in the US, Europe, Asia and other markets this time, resulting in a substantial decline in company-wide profit margins. - FY2019First statedAnnual report
「Sales declined year on year because group companies were forced to lower selling prices due to declining order volumes and intensifying price competition, among other factors.」
The company identified as a new risk factor the fact that intensifying price competition forced it to lower selling prices, resulting in margin compression and a decline in sales.