Isetan Mitsukoshi Swings Back to Profit in 9-Month Period

The retailer also lifted its full-year earnings targets.

TOKYO—Isetan Mitsukoshi Holdings swung back into the black for the first nine months of its fiscal year and raised its full-year earnings targets.

The retailer said Thursday it posted a net profit of 12.64 billion yen, or $145.87 million at average exchange, for the nine months ended December 31. This is compared to a loss of 10.48 billion yen, or $112.14 million, for the same period in 2009.
Operating profit increased 63.7 percent to 13.67 billion yen, or $157.75 million.
The group’s sales for the period shed 4.4 percent to 935.93 billion yen, or $10.8 billion. The company cited a strong yen and the ongoing economic stagnation in Japan as factors hurting its business.
According to the Japan Department Stores Association, sales at Japanese department stores fell for 32 straight months between February 2008 to September 2010, causing many of the country’s largest retailers to restructure, close stores, and reform their business models.
Based on the group’s performance in the third quarter, Isetan Mitsukoshi lifted its guidance for the full year ending March 31, citing better than expected progress of cost reduction activities.

The company said it now expects a net profit of 15 billion yen, or $184.32 million at current exchange, compared with a previous forecast of 12 billion yen, or $147.45 million. Operating profit is now forecast at 9 billion yen, or $110.59 million, compared with a prior forecast of 4.5 billion yen, or $55.3 million.

The sales guidance remains unchanged at 1.24 trillion yen, or $15.24 billion.