* Seven & I sees FY op profit at 240 bln yen vs 246 bln view
* Fast Retail sees FY op profit Y140.5 bln vs 136.8 bln
* Aeon lifts FY op profit fcast to Y130.1 bln from Y128.8
* Retail market has yet to see solid recovery-Seven & I
(Adds details, comments, graphics links)
By Taiga Uranaka
TOKYO, April 8 Seven & I Holdings (3382.T)
forecast modest profit growth this year while rivals Aeon Co
(8267.T) and Fast Retailing (9983.T) nudged their outlooks
higher, in a sign Japan's battered retail industry is past the
worst after a three-year downturn.
But Japan's top retailers also cautioned that profit
recovery would remain anaemic with consumers reluctant to spend
as long as wages and employment conditions remain weak.
"The tough economic situation will continue this year. Some
people say the worst is over, but it has not translated into a
solid recovery," Noritoshi Murata, president of Seven & I,
Japan's largest retailer, told a news conference.
Seven & I, which runs over 12,000 Seven-Eleven convenience
stores in Japan and thousands more overseas, forecast an
operating profit of 240 billion yen for the year to Feb. 2011,
slightly below the average estimate of 246 billion yen in a
poll of 15 analysts by Thomson Reuters I/B/E/S. [ID:nTOE637057]
The retailer's profit fell 12 percent in its fourth quarter
that ended on February 28 to 56 billion yen, as thrifty
consumers shied away from designer clothes at its department
stores and were less inclined to make impulsive purchases at
its convenience stores.
Seven & I's Murata said the company will try to secure
profit growth for the current financial year mostly through
cost cutting as consumers are unlikely to ease their
penny-pinching anytime soon.
It forecast same-store sales at its Ito-Yokado supermarket
chain would fall 3.1 percent this year, after a decline of 5.7
percent the year before.
The results from major Japanese retailers come at a time
investors are looking for confirmation that Japan's economy is
making the shift from a slow recovery driven by export-led
demand to more sustainable growth from consumer spending.
Graphic on Seven & I, Fast shares
Graphic on industry-wide sales link.reuters.com/qer86j
FAST RETAILING SHINES
Fast Retailing (9983.T), operator of the fashion budget
chain Uniqlo and a rare bright spot in the industry, reported
43 percent growth in first-half operating profit and raised its
profit outlook for the year to August by 8 percent to 140.5
The new forecast just topped the analyst forecasts for
136.8 billion yen in operating profit. [ID:nTOE63404D]
"They managed to outdo the consensus forecast, which is not
bad at all. I don't see any particular factor that could slow
their growth markedly," said Naoki Fujiwara, fund manager at
Shinkin Asset Management.
"But their strong performance is already in the share price
and is unlikely to drive the stock much further from here."
Fast Retailing CEO Tadashi Yanai said he was confident of a
rebound in its same-store sales following a 16.4 percent slide
in March, the biggest monthly drop in seven years.
"We have items that can generate large sales, so I think we
will be fine in April and May," Yanai told a news conference.
The company also saw strong growth in its overseas
business. The operating profit from Uniqlo's overseas
operations jumped more than three-fold from a year earlier for
the first half.
Yanai said the firm would accelerate its overseas drive,
adding the company may consider listing shares on overseas
exchanges as part of its attempt to become a major global
Aeon, the country's second-largest retailing group, said it
now expected to post an operating profit of 130.1 billion yen
for the year through end-February, 1 percent higher than its
Aeon cited cost cuts, rather than revenue growth, as the
basis for that slightly better outlook.
FamilyMart Co Ltd (8028.T) also reported earnings on
Thursday. The convenience store operator posted an 8 percent
fall in operating profit for the year just ended in March. It
forecast growth of 2 percent to 34.2 billion yen in the current
FamilyMart is accelerating store openings overseas due to
the weak prospects for growth in its home market.
"Severe consumer spending environment is likely to continue
this year," FamilyMart President Junji Ueda told a news
Before the results, shares of Seven & I closed down 1.7
percent at 2,314 yen. Aeon was unchanged at 1,060 yen and Fast
Retailing rose 0.7 percent to 150,000 yen. The benchmark Nikkei
average .N225 fell 1.1 percent.
(Additional reporting by Kiyoshi Takenaka; Editing by Valerie
Lee and Muralikumar Anantharaman)