TOKYO — Isetan Mitsukoshi Holdings said Friday that its net profit for the nine months ended Dec. 31 grew by over four times due to a low comparative base and a hefty one-time tax benefit related to the merger of its two parts, Isetan and Mitsukoshi.
The retailer, Japan’s largest department store operator, said net profit totaled 56.04 billion yen, or $711.16 million at average exchange rates, for the period. Operating profit for the first nine months increased 81.5 percent to 24.81 billion yen, or $314.84 million. Net sales dropped 0.4 percent to 932.63 billion yen, or $11.84 billion.
Commenting on its sales performance, Isetan Mitsukoshi cited difficult trading conditions due to a number of factors, including the March earthquake, its resulting power shortages and radiation fears, various revisions to the Japanese tax system, and financial unrest in Europe. It warned that the future remains uncertain.
“The [Japanese] department store business, due to a surge in sales of items such as those used during electricity shortages, saw sales increase on the year in June and July 2011, but since then year-on-year sales have continually been down due to effects of current economic trends,” the company said in a release.
However, Isetan Mitsukoshi revised its full-year guidance, increasing both its profit and sales outlooks.
The company now expects net profit for the fiscal year ending March 31 to total 55 billion yen, or $711.95 million at current exchange rates. This is up from a previous forecast of 35 billion yen, or $453.06 million. Operating profit is forecast to be slightly more than double last year’s figure at 22 billion yen, or $284.78 million. The company predicts full-year sales will increase 1.2 percent to 1.24 trillion yen, or $15.99 billion.