TOKYO — Isetan Mitsukoshi Holdings said Friday that its net profit for the six months ended September 30 grew about fifty times, benefitting from a low comparative base and a hefty one-time gain on a tax benefit linked to the merger of its two parts: Isetan and Mitsukoshi.
The retailer said its profit rose to 20.58 billion yen, or $258.43 million at average exchange rates for the period.
The earnings mark a vast improvement over the same period in 2010, when the company's net dropped over 90 percent to just 413 million yen, or $4.65 million, due to sluggish macroeconomic conditions and various losses.
Operating profit for the six months through September grew by nearly nine times last year's figure to 9.05 billion yen, or $113.62 million.
The company, Japan's largest department store operator, saw sales increase by 0.6 percent to 583.65 billion yen, or $7.33 billion. Both sales and profit exceeded the retailer's own forecasts for the half.
Isetan Mitsukoshi warned that while conditions for retailers have been improving since the March earthquake, the strong yen and unstable economic conditions in Europe and the U.S. mean that the future is still uncertain.
"Household consumption has continually been down, and even though retail sales rose once, they shifted to a minus again in August," the company said in a release. "We believe time is still needed before business conditions can make a full-scale recovery."
In a separate release, the company announced that it plans to open an 86,000-square-foot Isetan department store in Kuala Lumpur next spring. The store will be the retailer's fourth in the city, and is part of a three-year business development plan that also includes the refurbishment of its key Tokyo stores in the Shinjuku and Nihombashi districts. Isetan Mitsukoshi plans to spend between 8 and 9 billion yen, or $102.96 to $115.83 million, on each of the two stores, with remodeling due to be completed by early 2013 for the Shinjuku store and by 2014 for the Nihombashi store.
On Thursday Isetan Mitsukoshi announced plans to open a series of smaller stores aimed at increasing interaction with customers. The first of these, a luxury cosmetics store located in the shopping center attached to Shinjuku station and a small store inside Tokyo's Haneda airport, are both due to open next spring.
The retailer also revised its guidance for the full year ending March 31, slightly lowering its sales forecast but increasing profit outlook.
It now expects net profit to reach 35 billion yen, or $450.43 million at current exchange. Operating profit is predicted to rise 72.8 percent to 19 billion yen, or $244.52 million. Isetan Mitsukoshi forecasts sales will drop 0.6 percent to 1.21 trillion yen, or $15.62 billion.
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