Oct 6, 2009
Aeon first half operating profit falls 40%, keeps outlook
Oct 6, 2009
TOKYO, Oct 6 (Reuters) - Japan's second-largest retailer, Aeon Co Ltd (8267.T), reported a 39.5 percent fall in first-half operating profit on Tuesday 6 October, hurt by prolonged weak consumer spending, but it reiterated its full-year outlook above the market forecast.
Supermarkets and department stores remain in a slump even as the country's economy crawls out of recession, with record deflation and rising job losses dampening hopes for a speedy recovery.
Aeon and rivals such as Seven & I Holdings (3382.T) have been hit by sharp falls in sales for months as thrifty consumers cut back spending on clothes and other non-daily items and defect to cheaper specialty stores like Fast Retailing's (9983.T) Uniqlo.
Aeon has been trying to lure back shoppers by expanding offerings of cheap store brand items and sprucing up shops, but its attempts to revamp its general merchandise stores -- supermarkets that sell clothes and housewares in addition to groceries -- have failed to reverse the trend.
The retail conglomerate runs about 600 supermarkets, including Jusco stores, 1,200 grocery stores and thousands of specialty shops, including U.S. apparel chain Talbots (TLB.N).
The company said its operating profit came in at 35.5 billion yen ($397 million) for the six months that ended in August, down from 58.7 billion yen a year earlier.
The firm kept its full-year forecast at a range of 130-140 billion yen in operating profit, up 4.5-12.6 percent from a year earlier and above a mean estimate of 119.8 billion yen in a poll of 12 analysts by Thomson Reuters I/B/E/S.
Shares of Aeon have fallen 5 percent so far this year, underperforming a 9 percent gain in the benchmark Nikkei average .N225.
Prior to the announcement, Aeon shares ended down 2 percent at 830 yen, underperforming a 0.2 percent gain the broader market. (Reporting by Taiga Uranaka)
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