TOKYO–Isetan Mitsukoshi Holdings on Friday drastically slashed its full-year earnings forecast just one week before issuing if full-year figures.
The retailer said it racked up extraordinary losses on write-downs of store assets as well as damage and costs related to last month’s earthquake and tsunami.
Isetan Mitsukoshi said it now estimates its net profit for the year ended March 31 to come in at 2.6 billion yen, or $30.42 million, compared to a much higher previous outlook of 15 billion yen, or $175.5 million. It also lowered its sales forecast to 1.22 trillion yen, or $14.27 billion, down from 1.24 trillion yen, or $14.51 billion.
The company is due to release its full-year figures on Thursday.
The retailer said write-downs caused it to book an extraordinary loss of 10.4 billion yen, or $121.68 million at average exchange rates for the period.
It also said last month’s earthquake generated additional costs as it damaged the Mitsukoshi store in Sendai. The destruction of merchandise, building repair costs and other costs incurred during the closing of the store generated losses of 2.1 billion yen, or $24.57 million.
On the upside, however, the retailer has raised its operating profit estimate to 11 billion yen, or $128.7 million, from 9 billion yen, or $105.3 million. It attributed this to better-than-expected results of cost-reduction measures.