Demand fluctuations caused by weather, temperature changes and natural disasters

「The businesses operated by our Group have stores or business partners spread across a wide area. Accordingly, if natural disasters halt the supply of products to stores or business partners and disrupt continued operations, or if our own factories or product centers suffer human or physical damage and our product supply bases are lost, our Group's operating results and financial position may deteriorate.」

「Store sales were strong due to the normalization of social activity, increased inbound demand and record heat, which boosted sales of beverages, ice cream and other products. Same-store sales for the cumulative interim consolidated accounting period were 103.8% of the previous year's level.」

「Demand for the convenience store business operated by our Group fluctuates depending on weather and temperature, affecting sales. Sales tend to fluctuate with weather and temperature throughout the year. In particular, lower temperatures in summer or a warm winter may cause sales to stagnate, potentially worsening our operating results and financial position. In addition, if unexpected natural disasters or outbreaks of infectious diseases such as COVID-19 reduce customer visits or stop the supply of products to stores, thereby disrupting the continued operation of stores, our Group's operating results and financial position may deteriorate.」

「In August, record rainfall, mainly in western Japan, caused same-store sales to remain weak across the board, and sales continued to fall short of plan.」

「As a result, the cashless payment ratio rose from 17.0% to 21.9% as of November, helping offset the decline in consumption following the consumption tax increase. However, store closures and shortened operating hours due to Typhoon No. 19, which made landfall in the Kanto region in October, also contributed to same-store sales from September to November falling below the previous year at 97.13%.」

「As a result, same-store sales from April to June remained strong at 100.7% of the previous year's level, but July and August were difficult due to abnormal weather and a decline from the previous year's increase in demand caused by the heavy rain in western Japan. Consequently, cumulative first-half sales were slightly below the previous year at 99.3%.」

「Store sales for the consolidated fiscal year were significantly affected by the prolonged impact of the heavy rain disaster in western Japan in July and by unseasonable weather, and customer numbers continued to decline.」

「Store sales during the cumulative third quarter ended 31 December were affected significantly by disasters and unseasonable weather, a year-on-year decline in tobacco sales as demand for heated tobacco kits, which had been strong in the previous year, reached a plateau, and September's surge in demand ahead of the tobacco price increase falling far short of expectations, although the decline in October was in line with expectations. In addition, sluggish gift card sales and weak magazine sales meant that same-store sales were limited to 97.5% of the previous year's level.」

「Heavy rain centered on western Japan in July caused 5 stores, mainly in Hiroshima Prefecture, to suspend operations due to flooding and road closures. In addition, logistics were disrupted in Hiroshima's Kure City and many other areas due to damage to transportation networks caused by landslides and flooding.」

「In May, sales of ice cream and chilled noodles were sluggish due to severe weather, while tobacco sales also declined, resulting in same-store daily sales of 96.4% of the previous year's level.」

「In the fourth quarter, sales fell short of plan after being strongly affected by a cold spell and bad weather, with sales of ice cream and beverages falling to 96.2% of the previous year's level.」

「As a result, sales at existing stores remained strong at around 100% year on year, but due to the impact of bad weather and delays in opening stores, chain sales were ¥39,067 million, down 12.1% year on year, and operating revenues were ¥21,931 million, down 15.3%.」

「Demand for the convenience store business operated by our Group fluctuates depending on weather and temperature, affecting sales. Sales tend to fluctuate with weather and temperature throughout the year. In particular, lower temperatures in summer or a warm winter may cause sales to stagnate, potentially worsening our Group's operating results and financial position.」