TOKYO—Isetan Mitsukoshi Holdings saw its full-year profit jump more than 40 percent on a low base as sales dipped in the wake of last year’s sales tax hike.
Japan’s largest department store operator said its net profit for the 12 months ended March 31 grew 41.2 percent year-on-year to 29.89 billion yen, or $271.96 million at average exchange rates for the period. The growth came on a low comparative base, because the company paid out proportionally higher taxes the year before.
Yearly operating profit fell 4.5 percent to 33.08 billion yen, or $301.06 million.
The retailer’s sales were down 3.7 percent on the year, totaling 1.27 trillion yen, or $11.58 billion.
The company said that despite an uptick in the Japanese economy, the impact of last April’s consumption tax hike was greater than originally expected, resulting in a difficult fiscal second half.
But looking forward, Isetan Mitsukoshi cited positive business trends.
“In regards to the Japanese economy, the recoil from the consumption tax increase last April has decreased, corporate earnings centered around manufacture and export are recovering, and the employment rate is also improving,” the company said.
Isetan Mitsukoshi also released its guidance for the current financial year, ending on Mar. 31, 2016. It is expecting net profit to fall 16.4 percent to 25 billion yen, or $208.95 million at current exchange rates.
The company forecasts its full-year operating profit will increase by 5.8 percent to 35 billion yen, or $292.54 million.
It predicts sales growth of 2.2 percent to 1.3 trillion yen, or $10.87 billion.