TOKYO — Japan’s largest department store operator, Isetan Mitsukoshi Holdings Ltd., posted a lower-than-expected net profit for the year ended March 31, amid a protracted slump in consumer spending.
This story first appeared in the May 13, 2009 issue of WWD. Subscribe Today.
Isetan Mitsukoshi said Tuesday it generated a net profit of 4.68 billion yen, or $46.8 million at average exchange, for the period. That’s more than 50 percent lower than the target it gave in February, when the company issued a profit warning. At that time, it said net profit was on track to come in at 11 billion yen, or $122.9 million.
Full-year operating profits came in at 19.58 billion yen, or $195.8 million, while net sales were 1.43 trillion yen, or $14.3 billion.
Isetan and Mitsukoshi merged early last year so year-earlier figures were not provided.
As for the current fiscal year, which ends March 2010, Isetan Mitsukoshi said restructuring and cost-cutting will allow it to grow net profits more than four times to 20 billion yen, or $204.1 million at current exchange.
But the company warned the rest of the balance sheet won’t be as rosy. Operating profit is seen dropping nearly 90 percent to 2 billion yen, or $20.4 million. Sales are seen falling by 10.3 percent to 1.28 trillion yen, or $13.1 billion.
The company also revealed plans to close a branch of Isetan in the Tokyo neighborhood of Kichijoji in March 2010. This location has incurred losses of 1.7 billion yen, or $17.3 million, to date.