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Daiei Jumps After Forecasting Return to Profit: Tokyo Mover
Daiei Inc. (8263) shares jumped the most in almost 6 months in Tokyo after the Japanese supermarket chain forecast it will return to profit for the first time since 2008 by increasing private brand sales.
The retailer rose 3.8 percent, the most since Oct. 11, to 277 yen in Tokyo, compared with a 0.8 percent decline on the broader Topix Index.
“Daiei’s stock has been valued low for some time now, so there was a certain amount of surprise there,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo.
Daiei President Michio Kuwahara said the retailer will increase the portion of private-label goods it sells to 15 percent this year, from 12 percent. “That will raise our profitability,” he told reporters in Tokyo today.
Net income will probably jump to 1 billion yen ($12.2 million) in the year ending February 2013, from an 11.4 billion yen loss in the previous year, while sales are expected to remain little changed at 870 billion yen, according to its earnings statement today.
Net loss widened to 11.38 billion yen for the year ended Feb. 29, from 5.32 billion yen a year earlier, according to today’s statement. Sales dropped 5 percent to 869.5 billion yen.
The retailer also forecast operating profit will more than double to 8 billion yen this fiscal year from 3.73 billion yen in the previous 12 months.
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