Impact of Consumer Preferences, Warmer Winters and a Sluggish Winter Market

「売上高の7割超を占める主力の「ザ・ノース・フェイス（THE NORTH FACE、以下TNF）」で、8月以降も天候不順やインバウンド需要の鈍化、秋物需要の立ち上がりの遅れなどが重なり、特に卸売りが苦戦。」

「In addition, the warm-weather trend from December onward affected demand trends during the autumn and winter selling season, primarily for outerwear and thermal products.」

「During the interim consolidated accounting period, there were periods when demand for going out was temporarily suppressed by the impact of record-breaking heat, but underlying demand for summer products remained generally strong.」

「Despite the impact of the warm winter, revenue increased from the previous period, supported by robust inbound demand and a recovery in domestic consumption centered on urban flagship stores.」

「Gross margin declined 0.9 percentage points year on year to 49.9%, partly because some spring products were discounted due to the extreme heat and because the exceptional demand for Canterbury replica jerseys during the Rugby World Cup held in the previous period did not recur in the current interim period.」

「Sales of key cold-weather items such as down jackets and fleece reached their peak 1–2 months later than usual due to the impact of the warm winter.」

「During the cumulative third quarter of the current consolidated fiscal year, demand for autumn products remained weak due to record-breaking heat that continued through late October. Sales of winter products such as down jackets and fleece increased as temperatures fell from late November, but even after December began, temperatures exceeded 20°C in some parts of Japan on certain days, and weather conditions continued to make it difficult to gain momentum in winter product sales. Some customers also held back on purchases as concerns about household finances increased, but firm support for the brands helped drive revenue to ¥94,832 million, up 9.3% year on year.」

「Sales of highly functional items, including quick-drying T-shirts and products with deodorizing, antibacterial, and UV-protection features, remained strong even after August began due to the record-breaking heat.」

「Some gear-related products saw a decline following the exceptionally strong increase in demand in the previous period, but in addition to a full recovery in demand for mountaineering, the trend of incorporating high-performance materials into lifestyle apparel is spreading.」

「Although the COVID-19 pandemic and the impact of requests to refrain from going out due to unsettled weather and other factors had an effect, e-commerce sales and other channels that met demand for staying at home remained strong,」

「In the sports apparel industry surrounding our company, sports demand has continued to contract due to the postponement or cancellation of large-scale events and requests to refrain from going out. At the same time, attention has increasingly focused on emerging demand for camping and health-oriented activities such as yoga and running, as well as for self-care-related products such as comfortable loungewear for working from home.」

「Although ski-related products struggled due to the warm winter, lifestyle and outdoor lines of the original Goldwin brand performed steadily, maintaining higher revenue for winter-related brands.」

「Although consolidated revenue was affected by the consumption tax rate increase in October and the warm winter, it remained strong, led primarily by the "The North Face" brand, as our product and sales strategies centered on in-store operations proved effective.」

「Consolidated revenue was affected by somewhat delayed launches of summer products due to unsettled weather from the rainy season through early summer, but high-priced products such as rainwear performed well.」

「No new business or other risks arose during the cumulative first quarter of the current consolidated fiscal year.」

「No new business or other risks arose during the third-quarter cumulative consolidated period.」

「During the six-month period ended [current second quarter], there were no new business risks and no material changes to the business risks described in the prior fiscal year's annual securities report.」

「No new business or other risks arose during the cumulative first quarter of the current consolidated fiscal year.」

「The products handled by our group are susceptible to changes in personal consumption resulting from economic fluctuations and to changes in consumer preferences. For products used during specific seasons, weather conditions such as abnormal weather and hot or cold temperatures may significantly affect sales.」

「No new business or other risks arose during the six-month period of the second quarter of the current consolidated fiscal year.」

「No new business or other risks arose during the cumulative first quarter of the current consolidated fiscal year.」

「Winter-related brands also posted a decline in revenue because chronic market weakness, primarily in snowboard apparel, continued and substantial procurement and sales adjustments were implemented amid excessive inventory in the distribution channel.」

「Winter-related brands also recorded a ¥600 million decline in revenue after implementing sales adjustments in response to continued market weakness from the previous season.」

「No new business or other risks arose during the six-month period of the second quarter of the current consolidated fiscal year.」

「There have been no material changes to the business and other risks described in the securities report for the previous fiscal year.」

「Chronic market weakness, primarily in snowboard apparel, continued amid oversupply. In response to excessive unsold inventory in the distribution channel, we implemented substantial sales adjustments during the current fiscal year, and weak sell-through caused by the warm winter also forced a significant decline in revenue.」