Headwinds from price increases for the Doll Series

「Meanwhile, following its withdrawal from the bicycle business, the Company announced the discontinuation of production of its Popo-chan doll series in the doll and making-toy category, which generated a much greater-than-expected response.」

「While the doll series remained sluggish, the DIY toy Neji Hapi series maintained a certain level of popularity, and the Sumikko Gurashi World DIY Set, launched as a limited-time product, sold out by year-end.」

「The Popo-chan series has gradually shown a recovery in sell-out sales.」

「Although the difficult conditions surrounding the Popo-chan series continue, the company will continue promoting it during the period as part of its 25th-anniversary year, including active promotions such as TV commercials that communicate Popo-chan's appeal.」

「Although the carry-doll market remains difficult, the company plans to continue patient efforts to build awareness ahead of the Christmas selling season for the Popo-chan series, which is celebrating its 25th anniversary, including airing anniversary campaign TV commercials throughout the year.」

「In girls' toys, the overall downward trend in the category market is affecting the company's products as well.」

「In the girls' toys category, the previously sluggish Popo-chan series performed well, led by standard products such as Baby Popo-chan (¥5,000) and the Two-Story Popo-chan House (¥6,500).」

「The carry-doll Popo-chan series, which finally began showing signs of recovery in the latter half of the first half, continued to see consumers add products to the series during the third quarter, mainly accessories such as the Two-Story Popo-chan House (¥6,500).」

「The carry-doll Popo-chan series has also shown signs of recovery since stores reopened in June. In addition to dolls such as Baby Popo-chan (¥5,300), customers have increasingly been adding accessories such as the Two-Story Popo-chan House (¥6,500) and the Shopping Stroller (¥4,580) to their purchases.」

「The company's Popo-chan series of dolls also remained sluggish and continued to struggle during the period.」

「Among girls' toys, the popularity of low-priced collectible toys has affected the market, while carry dolls and making-hobby products remain sluggish,」

「The toy market remains difficult. In the carry-doll category in particular, products from overseas manufacturers were newly launched during the quarter, and the companies are in a difficult environment as they divide up the stagnant carry-doll market.」

「However, in the final month, January, inventory adjustments were made by distributors for new dolls scheduled for launch in February of the following period, forcing domestic sales for the current consolidated fiscal year below expectations.」

「In domestic sales, there were few signs of a recovery after the stagnation of the August summer sales season. In particular, the carry-doll market among girls' toys fell below the previous year, and the contraction trend in the company's Popo-chan series continued through October of the current quarter, becoming a factor behind the downside in toys segment sales.」

「In domestic sales, oversupply in the doll market, exceeding consumer demand across a wide range of competing products, accelerated during the second quarter and the market remained stagnant. This, together with weather-related factors affecting the bicycle segment and other businesses, became a factor behind the downside in second-quarter results.」

「With support from distributors during the first quarter, the company actively launched new dolls and ran new campaigns. However, the launch of 2 character-doll lines popular with girls aged 3–6 increased the number of product variants not seen in the previous year, creating oversupply while the carry-doll market remained stagnant, and forcing the company's share of the doll market to contract.」

「In the toys segment, sales volumes of existing high-value-added products such as the Rice series increased significantly despite price erosion caused by online price competition. Some new products also generated strong purchasing power despite consumers' cost-consciousness, and products in certain categories maintained firm sales regardless of selling prices. However, in the second half, the launch of competing dolls in summer and thereafter reduced the share of store shelf space occupied by the company's products, becoming a factor behind the downside in toys segment sales.」

「In domestic toy sales, the impact of care dolls featuring strong characters launched since summer has emerged as a major factor behind the downside in quarterly sales of the girls' toys doll series.」

「In the second quarter and in July, the company was affected by the launch of a competing character-themed doll that children can carry. The slowdown in girls' toys during the latter half of the second quarter became a factor behind the downside in sales of the toys segment.」

「Meanwhile, although the doll series in the girls' toys category has not matched the momentum of the same period last year, when it had been following a strong growth trajectory,」

「In girls' toys, the doll series, which had increased significantly in the same quarter of the previous year, is facing a headwind in the current period's market trend following price increases for accessories and other items.」