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Please explain your outlook for achieving the full-year sales volume target for the Yakult 1000 Series.
While we currently face challenges in acquiring new customers and improving retention rates, we plan to obtain a Food with Function Claims certification related to immune function early in the second half of the fiscal year (October to March), which will aid in our efforts to strengthen sales promotion and advertising initiatives and achieve our sales volume target.
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What were the factors behind operating profit in Japan reaching the planned level in the first quarter?
Although sales volume in Japan fell short of the plan, operating profit was generally in line with expectations because expenses were lower than anticipated, partly due to the postponement of certain expenditures.
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What is your approach to expense control from the second quarter onward?
We will continue to focus on the selective allocation of resources while maintaining strict budget management and thorough cost reviews.
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What was the rationale for selecting the 12 products subject to the price revisions scheduled for October?
The price revisions were implemented because continued increases in raw material, labor, and other costs, in addition to the impact of the situation in the Middle East, could no longer be fully absorbed through internal cost reduction efforts. The products selected were mainly those whose prices had remained unchanged for an extended period, taking into account the profitability of each product.
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How do you expect the price revisions to affect sales volume?
By steadily implementing sales promotion measures and other initiatives, we aim to limit the decline in sales volume to under 5%.
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How would a consumption tax reduction affect pricing and sales volume in the home delivery channel?
Selling prices vary by sales company, so there is no uniform approach. However, in general, prices would be expected to decline by an amount equivalent to the reduction in the consumption tax rate. Since many customers in the home delivery channel are regular consumers who purchase through Yakult Ladies, we believe the impact on sales volume would be limited.
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What is your approach to product strategy and production system optimization to absorb the increase in fixed costs following the start-up of the new Chiba Plant?
The new Chiba Plant will manufacture new products in addition to existing products, which we expect to contribute to earnings. Regarding production system optimization, we will continue to evaluate the situation while taking into account sales trends and utilization rates at our other plants.
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Please provide monthly sales volume and year-on-year growth rates in China for the second quarter.
April: approximately 5.01 million bottles per day, 102.6% year on year
May: approximately 4.32 million bottles per day, 83.2% year on year
June: approximately 5.26 million bottles per day, 100.4% year on year
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What were the factors behind China's sales volume declining year on year in the second quarter?
The main factors were weaker consumer spending due to higher fuel prices, unfavorable weather conditions, and the high comparison base resulting from the launch of Yakult Muscat Flavor in the previous fiscal year.
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What is your outlook for the flavor product strategy in China?
We have seen a certain degree of success in attracting new customers through our flavored products, and therefore intend to continue expanding this product category.
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Please provide an update on recent sales trends in Mexico, Indonesia, and Vietnam.
In Mexico, business conditions remain challenging due to a weaker consumer environment, but we aim to restore performance by strengthening sales promotion activities. In Indonesia, although a price revision was implemented in January, quarterly sales volumes have continued to exceed the previous year following the June launch of Yakult Strawberry Flavor, our second flavored product. In Vietnam, Yakult Peach Flavor has performed better than expected, and with the number of Yakult Ladies and retail outlets continuing to increase, we expect the business to maintain its growth trajectory.
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What were the factors behind the approximately JPY1.6 billion increase in currency-neutral operating profit in Asia and Oceania during the first quarter?
The main factors were higher gross profit driven by increased sales volume, the positive effects of price revisions in Vietnam and Indonesia, reduced fixed costs resulting from the closure of Guangzhou Plant No. 1 in China, and lower raw material costs.
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Please provide an update on recent sales trends in the United States and the progress of construction of the second plant.
Sales volume in the United States reached approximately 730,000 bottles per day in the second quarter (April to June), representing 101.6% of the prior-year level. Sales continue to remain close to production capacity limits. Demand remains strong, and we expect this trend to continue until the second plant begins operations. The start-up of the second plant is still scheduled for March 2027, with no changes at this time.
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How did raw material costs in Japan and overseas change in the first quarter compared with the same period of the previous year? Please also explain your outlook for raw material costs for the full year.
In Japan, raw material costs increased by approximately JPY500 million, while overseas operations benefited from approximately JPY500 million in lower raw material costs. By region, raw material costs decreased by approximately JPY300 million in the Americas and JPY200 million in Asia and Oceania, while Europe saw little change. For the full year, we expect raw material costs to increase by approximately JPY3.7 billion in Japan and JPY2.6 billion overseas, with no changes from the initial forecast.
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What factors could lead to the full-year consolidated revenue and operating profit guidance being exceeded?
Potential upside factors include the impact of price revisions in Japan and foreign exchange effects resulting from further depreciation of the yen.
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Please provide an update on discussions by the Committee for Enhancing Corporate Value.
The Committee for Enhancing Corporate Value is currently discussing business strategy, capital strategy, and governance from both short-term and medium- to long-term perspectives. While we are unable to disclose specific details at this stage, there has been no change to our plan to announce the results of these discussions in November.
