Aeon clocks first-quarter net loss
Japanese retail giant Aeon clocked a net loss of 6.2 billion yen ($61.2 million) for the first quarter ended May 31, on the back of budget-conscious shoppers looking elsewhere to grab a fashion bargain.
The poor result is the first time Aeon has gone in the red for the opening three-month fiscal quarter, reported the Nikkei Asian Review, following a 5 billion yen profit this time last year. Sales rose 1% to 2.04 trillion yen, while operating profit slid 6% to 32.8 billion yen.
The error lay in the poor handling of low-priced products, Vice President Soichi Okazaki said, noting that it "was unable to fully capture increasingly price-sensitive consumers" while maintaining quality offerings.
Sales in the business increased more than 10%, undone by store opening expenses and conversions of former Daiei locations weighed heavily. Same-store sales dropped 2% at unit Aeon Retail.
Overall, Aeon reported a hefty loss of 1.9 billion yen, mainly for temporary store closings in the wake of the Kumamoto-area earthquakes.
The company said the quarter's earnings were roughly in line with plans. It maintains its forecast of net profit climbing 66% to 10 billion yen for the full year ending February 2017.
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