Risk of excess inventory and lost sales opportunities associated with a sharp increase in sales
First written in FY2020. 9 of 18 entries say "Worsened", first in FY2022. Latest entry: 2026-08-03.
Workman moved to the "Worse" side of this theme in 2022, the same year as the typical company in this theme.
The whole theme swung hardest in 2022: 14 of 40 companies on the "Worse" side.
14 other companies' latest entry also says "Mitigated".
- FY2026WorsenedAnnual report
「The merchandise recognized on the balance sheet for the current fiscal year consists mainly of inventory at distribution centers and store inventory at company-operated stores. The amounts recognized for each are as follows.」
The merchandise balance increased from ¥24,084 million to ¥29,770 million, while distribution center inventory totaled ¥27,665 million. Private-label products accounted for more than 95% of distribution center inventory, and the inventory valuation loss for the current fiscal year totaled ¥2,377 million. - FY2026-H1WorsenedAnnual report
「Current assets totaled ¥126,517 million, an increase of ¥5,451 million from the end of the previous fiscal year. This was mainly due to increases of ¥3,864 million in merchandise, ¥2,999 million in securities, ¥461 million in loans to franchisees and ¥603 million in forward exchange contracts included in Other, partly offset by a ¥2,565 million decrease in cash and deposits.」
The merchandise balance increased by ¥3,864 million from ¥24,084 million at the end of the previous fiscal year to ¥27,948 million, raising inventory levels. - FY2025MitigatedAnnual report
「As we expand our customer base among general consumers, the handling of private-label products is trending upward and merchandise inventory levels are rising. Because these products are susceptible to changes in external conditions, such as shifts in consumer preferences and weather, we will improve the accuracy of sales and production plans based on demand forecasts, work to curb excess inventory and optimize inventory levels.」
While continuing to address inventory optimization, the merchandise balance decreased from ¥25,270 million at the end of the previous fiscal year to ¥24,084 million, reducing inventory levels. - FY2025-H1MitigatedAnnual report
「Current assets totaled ¥114,690 million, an increase of ¥2,042 million from the end of the previous fiscal year. This was mainly due to an increase of ¥8,510 million in cash and deposits, partly offset by decreases of ¥3,143 million in loans to franchisees, ¥1,380 million in merchandise and ¥1,424 million in forward exchange contracts included in Other.」
The merchandise balance decreased by ¥1,380 million from the end of the previous fiscal year, bringing inventory down from ¥25,270 million to ¥23,889 million. The results for the interim accounting period indicate that inventory growth risk was trending lower. - FY2024WorsenedAnnual report
「As the company expands its customer base among general consumers, the range of private-label products for outdoor and sports use has been increasing, raising merchandise inventory levels. Because these products are susceptible to changes in the external environment, including shifts in preferences and weather, the company will improve the accuracy of its sales and production plans based on demand forecasts, work to curb excess inventory and optimize inventory levels.」
Merchandise inventory increased from ¥21,911 million at the end of the previous fiscal year to ¥25,270 million, raising inventory levels and the risk of excess inventory for private-label products aimed at general consumers. - FY2024-Q3MitigatedAnnual report
「Current assets totaled ¥108,144 million, an increase of ¥6,753 million from the end of the previous fiscal year. This was mainly due to increases of ¥9,942 million in cash and deposits and ¥1,264 million in accounts receivable, partly offset by decreases of ¥2,662 million in merchandise and ¥1,302 million in loans to franchisees.」
The merchandise balance decreased by ¥2,662 million from the end of the previous fiscal year, bringing inventory down from ¥21,911 million to ¥19,248 million. The results for the quarter indicate that inventory growth risk was trending lower. - FY2024-Q2WorsenedAnnual report
「This was mainly due to increases of ¥4,370 million in merchandise and ¥1,053 million in franchisee receivables, partly offset by a ¥1,474 million decrease in cash and deposits.」
Merchandise balances increased by ¥4,370 million from the previous fiscal year-end, and inventory levels began rising again. - FY2024-Q1MitigatedAnnual report
「This was mainly due to a ¥4,268 million decrease in merchandise, partly offset by increases of ¥1,957 million in cash and deposits, ¥305 million in accounts receivable and ¥1,601 million in forward exchange contracts included in other assets.」
Merchandise balances decreased by ¥4,268 million from ¥21,911 million at the previous fiscal year-end to ¥17,642 million. The risk related to merchandise inventory levels was reported to be easing during the current quarter. - FY2023WorsenedAnnual report
「As the company expands its customer base among general consumers, the range of private-label products for outdoor and sports use has been increasing, raising merchandise inventory levels. Because these products are susceptible to changes in the external environment, including shifts in preferences and weather, the company will improve the accuracy of its sales and production plans based on demand forecasts, work to curb excess inventory and optimize inventory levels.」
Merchandise balances increased from ¥15,257 million at the previous fiscal year-end to ¥21,911 million, raising the inventory level of private-label products for general consumers and the risk of excess inventory caused by changes in preferences and weather. - FY2022WorsenedAnnual report
「As the company expands its customer base among general consumers, the range of internally developed private-label products for outdoor and sports use has been increasing, raising merchandise inventory levels. Because these products are susceptible to changes in the external environment, including shifts in preferences and weather, the company will improve the accuracy of its sales and production plans based on its proprietary demand forecasts, work to curb excess inventory and optimize inventory levels.」
As the range of private-label products for general consumers has increased, inventory levels have risen, and the company continues to identify the risk of excess inventory caused by changes in preferences and weather as an issue. - FY2021RestatedAnnual report
「Merchandise inventory has continued to increase as the company seeks to limit lost sales opportunities from the sharp increase in revenue and expands its range of private-label products. The company will improve the accuracy of its sales and production plans based on its proprietary demand forecasts, work to curb excess inventory and optimize inventory levels. In addition, the increase in inventory has raised logistics costs, including distribution center outsourcing fees, transportation costs and rent for external warehouses.」
The company continues to identify the rising trend in merchandise inventory and higher logistics costs as issues, while continuing to optimize inventory through demand forecasts and sales and production planning. - FY2020First statedAnnual report
「To limit lost sales opportunities resulting from the sharp increase in sales, the company increased production of seasonal products. As a result, merchandise at the end of the current fiscal year amounted to ¥13,660 million, an increase of ¥6,461 million from the previous fiscal year-end, representing a substantial increase. The company will improve the accuracy of its sales and production plans based on its proprietary demand forecasts, work to curb excess inventory and optimize inventory levels.」
Increased production to prevent stockouts led to a substantial increase in merchandise balances, and the company identifies curbing excess inventory and optimizing inventory levels as priority issues.