Business Disruptions Caused by Natural Disasters and Pandemics

「Since May of the previous year, COVID-19 has been reclassified as a Class 5 disease under Japan’s infectious disease law, facilitating the transition to a post-pandemic social and economic environment and the normalization of economic activity.」

「China was affected in the previous fiscal year by strict government measures to prevent the spread of infection, but same-store sales recovered as foot traffic increased following the shift away from the zero-COVID policy.」

「Same-store sales in July and August, when the group was affected by the seventh wave of infections in the same period of the previous year, significantly exceeded the prior-year period as customer traffic recovered, despite the impact of a typhoon.」

「In China, where strict measures such as lockdowns were imposed the previous year to prevent the spread of infection, same-store sales have gradually recovered as foot traffic increased following the government’s shift away from its zero-COVID policy.」

「The group has established emergency response manuals, including business continuity plans, disaster preparedness drills and the introduction of an employee safety confirmation system, but if a natural disaster or similar event occurs, restoring normal business operations may take a certain amount of time.」

「Although the group aimed for a further recovery in sales from the second quarter onward, it was again affected from late July by the seventh wave of COVID-19 infections. The outlook remains uncertain due to the impact of reduced foot traffic on customer numbers, changes in store operating hours caused by employee infections and temporary store closures.」

「Although operations in China remain difficult due to the impact of lockdowns, the United States continues to perform well, and the ASEAN countries are also recovering.」

「The group was significantly affected by repeated store closures and shortened operating hours in response to requests from national and local governments amid the renewed spread of COVID-19 that has continued since the previous fiscal year.」

「Domestic sales have been on a gradual recovery trend in terms of customer traffic since October, when the state of emergency was lifted, but have not recovered to pre-pandemic levels, and difficult conditions continue.」

「Sales have remained under extremely difficult conditions, as the transfer of shares in Kyotaru Co., Ltd. reduced sales by ¥3.670 billion, while in Japan customer traffic was significantly affected by shortened store operating hours following the declarations of a state of emergency in January and April 2021 and the extensions of those periods.」

「However, if infections spread further or persist for an extended period, and personal consumption declines or procurement of specific raw materials becomes constrained, the group’s performance and financial condition may be significantly affected.」

「However, if infections spread further or persist for an extended period, sluggish personal consumption accompanying a stagnation in global economic activity may have a significant impact on the group’s performance and financial condition.」

「Sales declined significantly year on year as the group’s companies closed stores and shortened operating hours amid the spread of COVID-19.」

「The global spread of COVID-19 has created an uncertain outlook for the environment surrounding the group’s business. In Japan, the group’s companies shortened operating hours and closed approximately 1,000 stores in response to nationwide school closures, requests from local governments to suspend operations, and the declaration and extension of the state of emergency.」

「Sales were affected by the consumption tax increase in October 2019 and store closures, mainly in the Kanto region, caused by Typhoon Hagibis, but」

「Many stores were forced to shorten their operating hours or close due to the heavy rains in western Japan in July 2018, the typhoon in September and the Hokkaido Eastern Iburi Earthquake.」

「During the first 3 quarters of the current consolidated fiscal year, many stores were forced to shorten their operating hours or close due to the typhoon in September, the Hokkaido Eastern Iburi Earthquake and other events.」

「If a major earthquake, storm or flood, fire or other accident occurs, damaging stores, factories or other facilities or information systems and disrupting operations, procurement or logistics, or if customers or employees suffer personal injury, the group’s performance may be adversely affected. In addition, if a pandemic caused by a highly virulent novel influenza virus occurs, sales may decline and performance may be adversely affected by a reduction in the scale of operations.」

「If a major earthquake, storm or flood, fire or other accident occurs, damaging stores, factories or other facilities or information systems and disrupting operations, procurement or logistics, or if customers or employees suffer personal injury, the group’s performance may be adversely affected. In addition, if a pandemic caused by a highly virulent novel influenza virus occurs, sales may decline and performance may be adversely affected by a reduction in the scale of operations.」