TOKYO — Isetan Mitsukoshi Holdings Ltd. said Friday that net profit for the first three months of its fiscal year contracted by 1.9 percent despite a slight rise in sales, which a spokesman for the company attributed mainly to foreign exchange factors.
For the three months ended June 30, Japan’s largest department store operator posted a net profit of 4.86 billion yen, or $43.7 million at current exchange.
Operating profit was up 12.8 percent to 6.84 billion yen, thanks to lower operating costs and a low comparative base for the same period a year earlier.
The retailer posted first-quarter net sales of 296.66 billion yen, an increase of 0.7 percent on the year.
Isetan Mitsukoshi’s sales took a hit due to the closure of two of its department stores at the end of March, but were boosted by M&A activities including the purchase of Socie World, a beauty company that provides services such as spa treatments, manicures and pedicures, and wedding preparation packages.
In order to better serve Japan’s increasingly fastidious consumers in one of the most saturated markets in the world, the retailer has launched the “my department store” concept, which aims to create a uniquely catered experience for each customer through a variety of customized experiences. The company is also moving to split its focus between traditional large-format stores and smaller, more specialized retail concepts.
Isetan Mitsukoshi Holdings left unchanged its guidance for the fiscal year ending March 31, 2018. It is expecting a 33.2 percent drop in net profit, to 10 billion yen.
The company predicts its 12-month operating profit will contract by 24.8 percent to 18 billion yen.
It is forecasting yearly net sales growth of 0.9 percent, totaling 1.26 trillion yen.