Impact of Unseasonable Weather on Apparel and Home and Leisure Departments

「Because Hokkaido had a cool summer, with substantially fewer midsummer and extremely hot days than in the year-earlier period, demand for summer clothing was weak, resulting in sales of 96.1% of the year-earlier level (96.1% at existing stores).」

「By line, apparel sales were 97.3% of the year-earlier level (97.3% at existing stores), due to consumers' stronger inclination to economize and unsettled weather.」

「Through various initiatives, including efforts to improve operating efficiency, the Company had aimed to reduce total working hours during the current period by 2% from the previous period, but sales growth beyond expectations left working hours at roughly the same level as in the year-earlier period. The Company also actively replaced equipment with high-efficiency models and took other measures to reduce electricity consumption as part of its energy-saving efforts, but consumption increased due to the extreme heat, resulting in a reduction of 2.5% year on year, short of the target of a 4% reduction from the previous period.」

「Although Hokkaido recorded its highest average temperature since records began this summer, resulting in extreme heat, sales increased as the Company ensured a sufficient assortment of frozen foods, beverages and deli products.」

「Although the Black Friday sale performed well in the apparel division, winter clothing and other products were affected by the delay in snowfall, resulting in 98.5% of the year-earlier level (98.5% at existing stores).」

「Although Hokkaido saw an expansion in personal consumption due to the change of era name and the 10-day Golden Week holiday, the retail industry continued to face difficult conditions, including the consumption tax increase in October, unsettled weather such as the warm winter and unstable snowfall in December, and the spread of the novel coronavirus from the beginning of the new year.」

「Conditions surrounding Hokkaido during the fiscal year were extremely difficult. In addition to the effects of unsettled weather, including record-low temperatures in August and delayed snowfall, consumer sentiment declined amid unprecedented conditions such as disruptions to the logistics network and food shortages caused by the Hokkaido Eastern Iburi Earthquake and the resulting power outage across Hokkaido, and remained depressed thereafter.」

「The business environment surrounding the Company during the third quarter was extremely difficult, as unsettled weather since the summer, the September Hokkaido Eastern Iburi Earthquake, a downturn in consumer sentiment following the disaster and an unprecedented delay in snowfall combined to weigh on conditions.」

「Although the apparel division struggled due to unsettled weather, including heavy rain and extreme heat in July and a cool, rainy August, the food division achieved its eighth consecutive period of revenue growth, enabling the Company to secure sales of ¥91,647 million (100.0% year on year), roughly in line with the previous year, for the cumulative second quarter.」

「Net sales for the cumulative first quarter amounted to ¥46,274 million (99.6% year on year), as the apparel division struggled due to unsettled weather and other factors.」

「The retail industry remained in a difficult environment, as consumers continued to be strongly inclined to economize amid rising fresh food prices caused by unsettled weather, while labor costs continued to rise due to the chronic labor shortage.」

「It was a fiscal year in which the lives of Hokkaido residents were significantly affected by weather conditions. Record rainfall from June to August and three typhoons making landfall in Hokkaido, the first such occurrence in the history of Hokkaido's meteorological observations, caused landslides and river flooding that continue to leave major impacts, including transportation disruptions.」

「During the cumulative 3rd quarter period, Hokkaido's economy suffered major damage from Typhoon No. 10, including damage to agriculture, forestry and fisheries, infrastructure damage caused by damaged railway tracks and collapsed utility poles, and damage to tourism caused by the closure of accommodation facilities and tourist destinations.」

「Sales were adversely affected by low temperatures, prolonged rain, typhoons, and other factors, with the apparel and home & leisure divisions particularly struggling.」

「Sales in the apparel and home & leisure divisions were delayed due to the impact of low temperatures caused by unseasonable weather.」