Risk of earnings volatility due to an overreliance on the U.S. market for overseas sales
First written in FY2020. 6 of 12 entries say "Worsened", first in FY2022. Latest entry: FY2027-H1.
People moved to the "Worse" side of this theme in 2022, 1 year before the typical company in this theme (2023).
4 other companies' latest entry also says "Mitigated".
- FY2027-H1MitigatedAnnual report
「In addition to strengthening strategic cooperation with our UK partners and working to accelerate our rollout in the UK market, we held a public event in Lithuania, with the support of a local partner, where visitors could experience our products and development philosophy through “1curiosity (ワンキュリオシティ).” The event was covered by local media for mothers and lifestyle media.」
To address the risks of overseas sales concentration in the U.S., the company strengthened its collaboration with its UK partner and held a public event in Lithuania, expanding its points of contact in Europe. - FY2026-H1MitigatedAnnual report
「In overseas sales, following a change to the agreement with the U.S. buyer of Magna-Tiles, the business switched from the previous fiscal year's 48th fiscal year to royalty income from sets containing the company's IP. As a result, there was no direct impact from U.S. trade policy in April. In Asia, educational toys, construction toys and baby products performed steadily in Taiwan and Thailand.」
Regarding dependence on U.S. sales, the company stated that the switch to royalty income meant it was not directly affected by U.S. trade policy, and also reported steady sales in Taiwan and Thailand. - FY2025MaterialisedAnnual report
「Turning to overseas conditions, sales declined substantially year on year as a result of changes to the contract with the US distributor for Magna-Tiles. In Taiwan, however, sales of educational toys, construction toys and baby products in the Asian market remained solid, suggesting potential for growth.」
The earnings volatility risk associated with dependence on U.S. sales materialized for the full fiscal year as a substantial decline in overseas sales following a change to the agreement with the distributor. - FY2025-H1MaterialisedAnnual report
「In overseas sales, following a change to the agreement with the U.S. buyer of MAGNA-TILES, the business shifted from product sales to royalty income from the current fiscal year for sets incorporating the company's IP, resulting in a substantial decline in sales compared with the previous fiscal year.」
The earnings volatility risk associated with dependence on U.S. sales materialized in the first half through the shift to a royalty model following the contract amendment and the resulting decline in sales. Overseas sales and royalty income fell from ¥1,575.541 million in the same period of the previous fiscal year to ¥96.887 million, while U.S. sales amounted to ¥45.030 million. - FY2025-Q1MaterialisedAnnual report
「For overseas sales, following a change in the contract with the seller of Magna-Tiles for the US market, the business changed from the current period to royalty income on sets for which the Company owns the IP, resulting in a substantial decline in sales compared with periods through the previous fiscal year.」
The earnings volatility risk associated with dependence on U.S. sales materialized through a change in the sales model following the contract amendment and an actual decline in sales. U.S. sales fell from ¥528.116 million in the same period of the previous fiscal year to ¥17.987 million. - FY2024WorsenedAnnual report
「The biggest challenge is addressing the expected substantial decline in sales resulting from a change to the sales agreement for Magna-Tiles, which accounts for most of the company's overseas sales.」
The risk associated with dependence on U.S. sales became more concrete in the form of an expected substantial decline in sales following the change to the Magna-Tiles agreement. U.S. sales continued to account for most of overseas sales in the current fiscal year. - FY2024-Q3WorsenedAnnual report
「In addition, as distributors are shifting orders to lower-priced manufacturers other than the company, the company's shipments are expected to continue declining.」
The earnings volatility risk associated with dependence on U.S. sales became more concrete through the shift in orders to lower-priced manufacturers and the prospect of a continued decline in the company's shipments. By region, U.S. sales amounted to ¥2,867.488 million. - FY2023WorsenedAnnual report
「In light of these developments and circumstances, the company regards the fact that U.S. sales account for a large share of total sales as a risk and recognizes it as an issue to be addressed.」
U.S. sales accounted for 61.3% of sales for the current fiscal year and remained at a level comparable with domestic sales. Excess inventory and declining orders emerged after heavy shipments in the first half, making the earnings volatility risk associated with the concentration in the U.S. more concrete. - FY2023-Q3WorsenedAnnual report
「As a result, the inventory of products purchased by distributors and mass retailers based on their own expectations is taking longer than anticipated to work down, and it has become likely that resuming orders will take considerable time.」
The volatility risk associated with dependence on U.S. sales became more concrete through delays in working down inventory secured in advance by distributors and the prospect of a prolonged wait before orders resume. - FY2023-Q2WorsenedAnnual report
「However, amid supply instability caused by the COVID-19 pandemic from the first half, distributors appear to have sought to secure inventory early. As shipments equivalent to a full year's supply have already been made, the company expects repeat orders in the second half to be limited.」
As shipments to the U.S. equivalent to a full year's supply were brought forward into the first half, repeat orders in the second half are expected to be limited, clarifying the earnings volatility associated with dependence on U.S. sales. - FY2022WorsenedAnnual report
「For the company, the rapid growth in U.S. sales exceeded its expectations, expanding to a level comparable with domestic sales and significantly changing its overall profit structure. In light of these developments and circumstances, the company regards the fact that U.S. sales account for a large share of total sales as a risk and recognizes it as an issue to be addressed.」
U.S. sales expanded to a level comparable with domestic sales, making the concentration of overseas sales in the U.S. a clear risk factor that has changed the profit structure and reduced profit margins. - FY2020First statedAnnual report
「Currently, overseas sales are overwhelmingly concentrated in the United States, leaving the company's performance highly exposed to changes in sales caused by changes in the external environment of a single country.」
The company explicitly identifies the risk that results could fluctuate significantly in response to changes in the external environment in the United States alone, given the concentration of overseas sales in the U.S.