WWD.com/globe-news/department-stores/isetan-fy-profit-drops-on-tax-rate-7677145/
government-trade
government-trade

Isetan FY Profit Drops on Tax Rate

Sales rose 6.9 percent on consumers' rush to buy ahead of a sales tax hike.

TOKYO — Isetan Mitsukoshi Holdings said Monday that its net profit for the year fell on extraordinary items, mainly a higher tax rate.
 
Japan’s largest department store operator’s net profit for the year ended Mar. 31 drop 16.3 percent to 21.17 billion yen, or $211.45 million at average exchange rates for the period.
 
Operating profit rose by 30.1 percent to reach 34.65 billion yen, or $346.11 million. A spokesman for the company said that this was due both to increased sales as well as to lower administrative expenses.
 
The company posted net sales of 1.32 trillion yen, or $13.2 billion up 6.9 percent from the previous fiscal year.
 
“In addition to the economic recovery, the retail world was helped by rush buying previous to the consumption tax increase, and consumption has become bullish, especially in the Tokyo area,” the retailer said in a release. Japan’s consumption tax went up from 5 percent to 8 percent on April 1.
 
Isetan Mitsukoshi also released its guidance for the current fiscal year, ending Mar. 31, 2014, indicating that its operating margins are coming under pressure and sales momentum will wane compared with the previous year.

The company said it expects full-year net profit to fall 5.5 percent to 20 billion yen, or $196.32 million at current exchange rates, while operating profit is predicted to increase by 1 percent to 35 billion yen, or $343.55 million.
 
The company is forecasting a 1.6 percent drop in net sales, to 1.3 trillion yen, or $12.76 billion.