Risk of fluctuations in sales of seasonal products due to abnormal weather, including cold summers and warm winters

「The slow rise in temperatures from June onward delayed the start of summer consumption, while the effects of repeated natural disasters resulted in lacklustre personal consumption.」

「In addition, from June onward there were many sunny days, and temperatures were extremely high, with the average temperature reaching a record high since the Meteorological Agency began compiling statistics. Against this backdrop, customers' needs for pull-in orders aligned with actual consumer demand, involving short-lead-time product planning and delivery, increased further」

「The full-year forecast for fiscal 2023 has been left unchanged because additional orders remained weak due to the warm winter during the fall/winter 2023 season, and orders for the spring/summer 2024 season have consequently also remained difficult.」

「If sales of seasonal products differ materially from forecasts due to abnormal weather such as a cool summer or warm winter, the performance of our group may be affected.」

「However, the company struggled throughout the year due to weather conditions, including record-low sunshine in July and a warm winter, as well as a stronger tendency among customers to place pull-in orders, meaning they carefully determine order timing based on actual consumer demand at retail stores.」

「In the apparel market during the cumulative third-quarter period, winter products performed poorly and forward orders remained stalled because temperatures stayed higher than normal and specialty stores and general merchandise stores increasingly adopted a pull-based ordering approach, carefully gauging the timing of orders based on actual demand at stores.」

「However, performance for the second quarter was affected by sluggish sales of summer merchandise due to record low sunshine and low temperatures in July, as well as an increasing tendency among specialty-store chains and general merchandise stores to place orders cautiously after observing store conditions, resulting in difficulties in order-taking activities.」

「During the cumulative first quarter, performance was affected by temperatures in March and April remaining lower than normal, as well as by stronger consumer demand for actual needs in the volume zone (the general price range), which led specialty-store chains and GMS operators to place orders more cautiously based on in-store conditions, a tendency known as pull-in ordering (placing orders cautiously after observing in-store conditions). As a result, order-taking activities, particularly for women's apparel, faced a difficult environment.」

「As a result of weather factors such as typhoons, heavy rainfall and the mild winter, as well as sluggish sales of young-oriented products in women’s apparel, net sales were ¥64,815 million, down 10.9% year on year.」

「In the apparel market during the cumulative third-quarter period, early-summer products performed well as temperatures in March and April were above average. From the second quarter onward, however, company-wide sales struggled due to weather-related factors and weak performance by products targeting younger women in the women's apparel segment.」

「In the apparel market during the cumulative second-quarter period, temperatures in March and April were above average and early-summer products performed well. However, rain and low temperatures in May and June, torrential rain and typhoons in July and August, and the effects of extreme heat caused sales of practical apparel to continue showing little growth.」

「In the apparel market during the cumulative first-quarter period, above-average temperatures in March and April provided a strong start, particularly for early-summer products. In May, however, summer products weakened due to rain, low temperatures and a reaction to the strong performance through April. Consumers continued to focus on actual-need purchases, and business performance therefore remained susceptible to fluctuations.」

「The Group's principal products, including women's apparel, consist largely of highly seasonal apparel products. If sales of seasonal products differ significantly from forecasts due to abnormal weather, such as cool summers or warm winters, the Group's performance may be affected.」

「In addition, affected by this summer's abnormal weather, the difficult sales environment has continued, with recovery through autumn/winter products also proving challenging.」

「The Group's principal products, including women's apparel, consist largely of highly seasonal apparel products. If sales of seasonal products differ significantly from forecasts due to abnormal weather, such as cool summers or warm winters, the Group's performance may be affected.」