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39393
Wed, 01/07/2009 - 20:51
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Aeon says it may fall into red in FY 2008 for 1st time in 7 yrs
TOKYO, Jan. 7 Kyodo -
Japanese retailer Aeon Co. revised downward on Wednesday its group earnings
forecast for the 2008 business year and said it may fall into the red for the
first time in seven years due to sagging consumer demand and special losses
linked to its U.S. clothing unit The Talbots Inc.
Aeon said it now expects between a consolidated net loss of 2.5 billion yen and
a net profit of 2.5 billion yen for the business year through this February,
compared with its earlier projection of a net profit of 11 billion to 15
billion yen. If the company falls into the red, it will be the first time since
fiscal 2001.
The Chiba-based company also said it incurred a group net loss of 29.45 billion
yen for the first nine months of fiscal 2008 through November, compared with a
31.92 billion yen in profit logged a year earlier. It reported an operating
profit of 65.92 billion yen, down 18.3 percent, on sales of 3.88 trillion yen,
up 2.7 percent.
''We expect the environment for spending to become markedly severer from now
on,'' said Aeon's Chief Financial Officer Masaaki Toyoshima at a press
conference in Tokyo.
Toyoshima said the company will lower its plan to invest around 800 billion yen
during fiscal 2008 to fiscal 2010, and halve the number of large-scale stores
to be newly opened between fiscal 2009 and fiscal 2010 from the initially
scheduled 12 to 14 stores to about six stores. It will also postpone renovation
plans.
Aeon, which operates Jusco and MaxValu supermarket stores, said it booked an
extraordinary loss of 25.1 billion yen, including 19.5 billion yen in
impairment losses logged by its struggling U.S. apparel chain in connection
with its decision to sell the J. Jill brand unit.
The special losses also included other costs stemming from shutting down some
of its stores.
In addition to the extraordinary loss, the company's earnings were also hurt by
consumer sentiment soured by the global economic downturn, leading to a drop in
sales of clothing and other household items.
The company said its credit card business was also sluggish despite its robust
performance in the past.
Aeon may consider lowering prices for clothing and other items and gear its
products to better match local tastes in a bid to boost flagging sales.
For the full business year, Aeon said it expects group operating profit of
between 126 billion yen and 131 billion yen, down from an earlier projection of
165 billion yen to 175 billion yen profit on sales of more than 5.2 trillion
yen, also lower than its earlier forecast of over 5.4 trillion yen.
The 2008 business year covers from last Feb. 21 through Feb. 28 this year,
eight days longer than the 2007 business year as the company moved the business
closing date to the end of February from Feb. 20.
==Kyodo
Japanese retailer Aeon Co. revised downward on Wednesday its group earnings
forecast for the 2008 business year and said it may fall into the red for the
first time in seven years due to sagging consumer demand and special losses
linked to its U.S. clothing unit The Talbots Inc.
Aeon said it now expects between a consolidated net loss of 2.5 billion yen and
a net profit of 2.5 billion yen for the business year through this February,
compared with its earlier projection of a net profit of 11 billion to 15
billion yen. If the company falls into the red, it will be the first time since
fiscal 2001.
The Chiba-based company also said it incurred a group net loss of 29.45 billion
yen for the first nine months of fiscal 2008 through November, compared with a
31.92 billion yen in profit logged a year earlier. It reported an operating
profit of 65.92 billion yen, down 18.3 percent, on sales of 3.88 trillion yen,
up 2.7 percent.
''We expect the environment for spending to become markedly severer from now
on,'' said Aeon's Chief Financial Officer Masaaki Toyoshima at a press
conference in Tokyo.
Toyoshima said the company will lower its plan to invest around 800 billion yen
during fiscal 2008 to fiscal 2010, and halve the number of large-scale stores
to be newly opened between fiscal 2009 and fiscal 2010 from the initially
scheduled 12 to 14 stores to about six stores. It will also postpone renovation
plans.
Aeon, which operates Jusco and MaxValu supermarket stores, said it booked an
extraordinary loss of 25.1 billion yen, including 19.5 billion yen in
impairment losses logged by its struggling U.S. apparel chain in connection
with its decision to sell the J. Jill brand unit.
The special losses also included other costs stemming from shutting down some
of its stores.
In addition to the extraordinary loss, the company's earnings were also hurt by
consumer sentiment soured by the global economic downturn, leading to a drop in
sales of clothing and other household items.
The company said its credit card business was also sluggish despite its robust
performance in the past.
Aeon may consider lowering prices for clothing and other items and gear its
products to better match local tastes in a bid to boost flagging sales.
For the full business year, Aeon said it expects group operating profit of
between 126 billion yen and 131 billion yen, down from an earlier projection of
165 billion yen to 175 billion yen profit on sales of more than 5.2 trillion
yen, also lower than its earlier forecast of over 5.4 trillion yen.
The 2008 business year covers from last Feb. 21 through Feb. 28 this year,
eight days longer than the 2007 business year as the company moved the business
closing date to the end of February from Feb. 20.
==Kyodo
