Japan's Aeon more than doubles its Q1 profit(70081)

Aeon says Q1 profit more than doubled, keeps outlook

Q1 op profit more than doubles, keeps full-year forecast

Japan's second-largest retailer Aeon Co Ltd more than doubled its operating profit in the first quarter, buoyed by cost-cutting efforts, and stuck to its full-year outlook.

Aeon and rival retailers have yet to enjoy the country's export-led economic recovery as consumers remain cautious on spending amid prolonged deflation.

Aeon, the operator of Jusco general merchandising stores, said operating profit came in at 21.8 billion yen ($249 million) in the March-May period, up from 8.7 billion yen a year earlier.

In the wake of a sharp sales fall during the economic downturn two years ago, the firm, known for its Topvalu store-label items, has been stepping up a drive to cut costs in a bid to eke out profit growth.

The company has about 600 general merchandising stores, which sell clothing and household items as well as groceries, and nearly 1,300 supermarkets and thousands of convenience stores and specialty shops in Japan and other Asian countries such as China.

The firm's year-on-year comparison was also boosted by the absence of U.S. apparel chain Talbots, which was a big drag on its earnings a year earlier.

Aeon sold a controlling stake in Talbots earlier this year, ending its two-decade ownership as part of Japanese retailers' broader push to focus on China and other growing Asian markets.

For the full-year through February, the company kept its forecast of 145-155 billion yen in operating profit, up 11-19 percent from a year earlier, in line with a mean estimate of 145.5 billion yen in a poll of 12 analysts by Thomson Reuters I/B/E/S.

Last week, Aeon's bigger rival Seven & I stuck to its annual forecast for moderate growth, helped by cost cuts after reporting a nearly 11 percent drop in quarterly operating profit.

Japan's Aeon more than doubles its Q1 profit

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