Investment in Operational Efficiency, Including Work-Style Reforms

「We secure an annual IT investment budget of approximately ¥700 million and are focusing on improving operational efficiency by continuously strengthening our DX infrastructure, including servers, and developing various business applications.」

「Selling, general and administrative expenses were ¥9,711 million, up 2.8% year on year. Factors contributing to the increase included higher personnel expenses from wage increases and new hires implemented as part of investment in human resources, as well as costs for relocating and opening the Kyushu DC. On the other hand, despite higher sales, freight and warehouse labor costs were held at about the same level as in the previous interim period, while lower advertising expenses resulting from restrained catalog production costs also contributed. As a result, the ratio of selling, general and administrative expenses to net sales was held to 18.9%, down 0.5 percentage points year on year.」

「Through more sophisticated inventory simulation analysis, the number of physical inventory items increased 9% from the end of the same quarter of the previous year, with almost no increase in the inventory value on the balance sheet.」

「With regard to climate change, we are eliminating delivery inefficiencies through optimized distribution, including direct shipment from automotive manufacturers. Monthly distance savings have exceeded 300,000 km, equivalent to 7 trips around the Earth, and these activities are helping ease pressure on transportation capacity and contribute to decarbonization.」

「Although personnel expenses increased due to wage increases implemented as part of investment in human resources, other expenses remained relatively restrained versus the plan through reductions in delivery costs and other expenses.」

「To that end, in addition to using RPA and AI, we will further promote data-driven initiatives and strengthen supply chain management.」

「Meanwhile, the decrease in depreciation and amortization as material-handling investments and other assets aged, together with operational improvements, turned warehouse handling fees lower and helped mitigate the increase.」

「Although freight costs continued to rise and personnel expenses increased due to wage increases implemented as part of investment in human resources, depreciation expenses declined as material-handling investments aged, and warehouse labor costs also began to decrease through operational improvements and other measures, contributing to the result.」

「The purpose of opening Smart DC is to expand shipping capacity in line with sales growth. The facility incorporates state-of-the-art labor-saving equipment, and the company is also considering reducing warehouse labor costs, which continue to rise, and halving the cost per shipment.」

「Selling, general and administrative expenses were ¥9,753 million, up 1.9% year on year, an increase of only ¥180 million from the same quarter of the previous year. While freight, storage and other costs increased, including the impact of higher unit prices, other costs benefited from lower publication expenses, as shown in the quarterly catalog cost illustration on the following page. Overall, expenses were managed restrictively within the plan.」

「The remaining increase was attributable to freight, storage and other costs linked to sales, and was kept within the plan.」

「To this end, we will assign tasks that can be handled by systems to AI (artificial intelligence) and RPA (robotic process automation), and allocate manpower to more creative areas.」

「Selling, general and administrative expenses increased by ¥883 million, or 10.2%, year on year to ¥9,573 million. Factors contributing to the increase included the addition of Triumph 21's expenses from the current fiscal year, higher personnel expenses due to increased staffing, and the impact of higher freight and storage costs, among others.」

「Factors contributing to the increase included the addition of Triumph 21's expenses from the current fiscal year, higher personnel expenses due to increased staffing, and the impact of higher freight and storage costs, among others.」

「Factors contributing to the increase included the consolidation of the earnings of Triumph 21 Co., Ltd. (hereinafter “Triumph 21”) from the current fiscal year, higher personnel expenses due to increased staffing, and the impact of higher freight and storage costs, among others.」

「We will work to improve the operating margin by promoting operational efficiency, including work-style reform, and taking fundamental steps to control selling, general and administrative expenses.」

「In addition to revenue growth, we will improve profitability by strengthening the planning and sales of original products, including imported products developed independently and products planned in-house, while also improving operational efficiency, including work-style reform, to increase the operating margin.」