Markets News

UPDATE 1-Japan retailer Aeon bounces back to operating profit, wary on outlook

(Recasts with quarterly numbers, adds executive’s comments)

TOKYO, Oct 7 (Reuters) - Japanese retailer Aeon Co returned to an operating profit in the three months through August but maintained a cautious outlook for the year as the pandemic weighs on consumption.

Japan’s biggest supermarket chain has seen strong food sales since the coronavirus outbreak as people cook at home instead of going out.

But its general merchandise stores and shopping malls have struggled to attract shoppers.

The company reported a 46.4 billion yen operating profit for its second quarter through August, bouncing back from a loss of 12.5 billion in the first quarter.

That was down 12 billion yen from a year earlier, but the company said it reflected a recovery, particularly in June and July, as the government eased restrictions on businesses and people resumed shopping.

Aeon reiterated its operating profit forecast for the year through February of 50 billion to 100 billion.

That was more pessimistic than analysts’ average forecast of around 125 billion yen, Refinitiv Eikon data showed.

Aeon said it had to be cautious given lingering concerns about the virus and weak consumer sentiment.

“We expect negative macroeconomic trends to continue having an impact,” President Akio Yoshida said on a conference call.

Japan suffered its biggest economic slump on record in the second quarter as the pandemic and anti-virus measures crippled demand.

Analysts expect any recovery to be modest as fears of a second wave of infections weigh on consumption. (Reporting by Ritsuko Ando; editing by Louise Heavens and Jason Neely)