TOKYO–Takashimaya Co. Ltd. saw its first-quarter net profit grow more than four times despite a slight drop in sales.
The Japanese department store operator said Monday its net profit for the three months ended May 31 rose to 1.35 billion yen, or $14.67 million at average exchange rates from 316 million yen, or $3.23 million, a year earlier. Cost-cutting propelled an 88 percent jump in operating profit to 3.98 billion, or $43.26 million.
Sales for the period slipped 1 percent to 206.29 billion yen, or $2.24 billion. Takashimaya and its rivals in the department store industry have been struggling in Japan due to increased competition and consumers’ tendency to spend less on clothing and luxury goods but there are signs that business conditions are improving. Collectively Japanese department stores saw their May sales fall 2.1 percent, a drop smaller than that of previous months.
Meanwhile, Takashimaya said it has struck a deal to sell the building that housed its Fifth Avenue flagship for $142 million to New York-based real estate company Thor Equities LLC. The retailer said in March it was shuttering the store to focus on faster-growing Asian markets.
Taking that extraordinary gain into consideration, the company said it expects its net profit for the year ending Feb. 28, 2011 to come in at 11 billion yen, or $123.21 million, compared to an earlier forecast of 8 billion yen, or $89.60 million. It left its other targets in tact, including its sales estimate of 846.50 billion yen, or $9.48 billion.