TOKYO — Isetan Mitsukoshi Holdings reported net profits for the six months ended Sept. 30 jumped 78.1 percent, thanks to increased sales and lower tax payments. Both profit and sales exceeded the retailer’s own forecasts.
Net profit totaled 10.87 billion yen, or $89.12 million at average exchange rates for the period.
The company’s first-half operating profit rose 48.6 percent to 14.5 billion yen, or $118.9 million. A spokesman for Isetan Mitsukoshi said the rise in operating profit had to do with higher sales of products such as private label and collaboration items, which have higher margins than products by independent brands.
Japan’s largest department store operator said its net sales for the six months grew 5.5 percent to 613.87 billion yen, or $5.03 billion. This was owed in part to a low comparative base, which occurred due to a tax hike last year. Increased sales to international visitors to Japan also played a role.
“At the Mitsukoshi Ginza store, in order to give not only domestic customers but also international customers a more pleasant shopping experience, we are remodeling the entire store to create the most up-to-date global department store possible, including adding an airport-style duty-free store on the eighth floor,” the company said. “Elements of the remodel include expanding the floor space for uniquely edited product selections, as well as a new foreign customer service center, which opened in the basement on Sept. 2 and provides the best in Japanese customer service to customers from around the world.”
In light of its better-than-expected first-half results, Isetan Mitsukoshi also raised its sales and profit guidance for the fiscal year ending March 31, 2016.
The company now expects yearly net profit to fall 9.7 percent to 27 billion yen, or $225.4 million at current exchange rates. This is up from a previous forecast of 25 billion yen, or $208.7 million.
The retailer is forecasting a rise of 11.8 percent in operating profit to 37 billion yen, or $308.9 million. Its earlier guidance was for 5.8 percent growth to 35 billion yen, or $292.2 million.
Isetan Mitsukoshi now predicts its full-year sales will grow 3 percent to 1.31 trillion yen, or $10.94 billion. It was previously expecting 2.2 percent growth to 1.3 trillion yen, or $10.85 billion.