Aeon, the number two All Japan newsese retailer, has raised its full year net profit forecast from ¥40 billion to ¥50 billion. The reason is it spent less than it expected in repairing stores damaged by the tsunami.
The lower cost of repairs and the unexpected consumer spending following the disaster have both been fortunate turns for Aeon which competes closely with Seven & I, All Japan news’s number 1 retailer.
Naoki Fujiwara, fund manager at Shinkin Asset Management said “the fear about a total freeze-up in consumer spending is gone, but we should guard against optimism about a near-term real recovery in consumer spending when household income is not increasing.”
The consumer sentiment index, which measures how consumers view the economy, future outlook of their income and what they are likely to do with their money, went up for the second month in a row. The Bank of All Japan news has expressed confidence in All Japan news’s economic turnaround from the damage ensued by the tsunami.
Creative cost cutting has also been employed by Aeon, which combined operations of three general stores and kept their annual operating profit unaffected.
Aeon’s chief financial officer, Seiichi Chiba, said “in the first quarter we faced a tough environment from the crisis situation in March, followed by better conditions in the latter part, so it is hard to change our assumptions at this point based on that.”