Sales Declines and Business Interruptions Caused by Weather, Natural Disasters and Infectious Diseases

「During the current fiscal year, the first half was difficult due to the effects of record heat in September, followed by unseasonable October heat that far exceeded expectations.」

「In the apparel and fashion industry, some recovery in personal consumption has been observed due to improving income conditions and expanding inbound demand, but concerns remain about the impact on the business environment of climate change far exceeding expectations, including prolonged extreme heat, and a further increase in customers' cost-consciousness caused by continued price increases.」

「We recorded losses on the disposal of store merchandise and other items related to the Noto Peninsula Earthquake that occurred in January 2024 as extraordinary losses.」

「Meanwhile, in the apparel and fashion industry, conditions followed a recovery trend due to increased opportunities for customers to go out and a recovery in inbound demand, but the impact of the sharp rise in prices and climate change on personal consumption remains a concern.」

「During the third quarter of the current consolidated cumulative period, COVID-19 was reclassified from Category 2 equivalent to Category 5, and economic activity moved toward full normalization. At the same time, the economy remained in a difficult-to-predict environment due to rising resource prices resulting from the prolonged situation in Ukraine and financial and capital market volatility.」

「During the first quarter of the current consolidated cumulative period, restrictions on activity related to COVID-19 were eased and economic activity normalized further. At the same time, the economy remained in a difficult-to-predict environment due to rising resource prices resulting from the prolonged situation in Ukraine, financial and capital market volatility, and concerns over a renewed spread of COVID-19 infections.」

「During the consolidated fiscal year under review, the issuance of states of emergency and the application of priority preventive measures to prevent the spread of COVID-19 led to fewer visitors to commercial facilities and lower utilization rates at existing stores, significantly affecting the group's performance.」

「Meanwhile, in the apparel and fashion industry, the deterioration in employment and income conditions caused by the COVID-19 pandemic and the sharp rise in prices are expected to delay the return of personal consumption to pre-pandemic levels, although signs of recovery have begun to emerge as various restrictions are eased.」

「Although the number of infections has remained low recently and signs of an economic recovery have emerged as vaccinations spread and infection-control measures were thoroughly implemented, considerable uncertainty remains and the outlook continues to be unclear due to the effects of global supply chain disruptions, volatility in the financial and capital markets, and the emergence of new variants.」

「During the consolidated fiscal year under review, the spread of COVID-19 led to reduced operating hours and temporary closures at commercial facilities and directly operated stores. As a result, utilization rates at existing stores declined and sales fell, significantly affecting the group's performance.」

「Meanwhile, in the apparel and fashion industry, the impact of people refraining from going out and temporary closures of commercial facilities following the third declaration of a state of emergency has been prolonged, in addition to persistent thrift caused by the consumption tax increase, and extremely challenging conditions continue.」

「Meanwhile, in the apparel and fashion industry, the impact of people refraining from going out and the resulting decline in visitor traffic at commercial facilities has been prolonged due to the second declaration of a state of emergency issued in response to the resurgence of COVID-19, in addition to persistent thrift caused by the consumption tax increase, and challenging conditions continue.」

「The situation remained extremely challenging, owing in large part to the effects of people refraining from going out as COVID-19 spread and the resulting decline in customer traffic at commercial facilities.」

「In the third quarter of the consolidated fiscal year under review, the spread of COVID-19 led to reduced operating hours and temporary closures at commercial facilities and directly operated stores. As a result, utilization rates at existing stores declined and sales fell, significantly affecting the group's performance.」

「In the third quarter of the consolidated fiscal year under review, the spread of COVID-19 led to reduced operating hours and temporary closures at commercial facilities and directly operated stores. As a result, utilization rates at existing stores declined and sales fell, significantly affecting the group's performance.」

「Meanwhile, in the apparel and fashion industry, concerns include the effects of weather-related disasters and a record warm winter, the cooling of consumer sentiment caused by the consumption tax increase, and the impact of the COVID-19 pandemic, leaving the outlook uncertain.」

「Meanwhile, in the apparel and fashion industry, consumer sentiment has remained lackluster due to the impact of natural disasters such as typhoons and torrential rain, the near absence of front-loaded demand before the consumption tax rate increase, and consumers' persistent thrift following the tax increase.」

「Despite actively working to optimize inventory at the end of the fiscal year in response to repeated abnormal weather during the second half, the gross profit margin was 46.8%, down 0.1 percentage points year on year,」

「In particular, unfavorable or abnormal weather during winter, which accounts for a high proportion of sales, may significantly affect the group's performance. If an infectious disease such as a novel influenza virus spreads in Japan, operations may be temporarily suspended and consumption may decline.」

「Sales may decline due to abnormal weather, such as cool summers and warm winters, and natural disasters, such as typhoons and earthquakes. In particular, unfavorable or abnormal weather during winter, which accounts for a high proportion of sales, may significantly affect the group's performance.」