Japan’s Aeon posts higher profit on revamp boost

TOKYO: Aeon Co Ltd, Japan’s largest retailer by sales, reported a 37% jump in third-quarter operating profit, helped by restructuring efforts that drove up business at its struggling general merchandising stores.

The supermarket and shopping mall operator has been taking measures such as redesigning and rebranding to boost traffic at its general merchandise stores, which have lost customers to discount stores and specialists in products such as clothing and electronics.

Aeon’s operating profit for the three months ended November was 17.8 billion yen (US$159.08mil), versus 13 billion a year ago, calculations based on nine-month results show.

It beat an average estimate of 13.8 billion yen from two analysts polled by Thomson Reuters.

Aeon kept its forecast for a record high operating profit of 200 billion yen for the year to February.

While Japanese corporate profits are near an all-time high, consumption remains weak with households sitting on cash amid uncertainty over the economic outlook.

Aeon, which is targeting 340 billion yen in operating profit for the year ending February 2021, has continued to cut prices to draw in Japan’s thrifty shoppers, even as some other firms move to raise prices in the face of cost pressures including the tightest labour market in decades. — Reuters