Wednesday , September 30 2020

Muji owner suffers drop on profit problems


Shares of Ryohin Keikaku Co tumbled 19%, the most on record, after the Muji operator cut its profit forecast, citing uncertainty in its East Asian operations.
The retailer of everything from furniture to clothing and food lowered its full-year operating profit target 17% to 37.8 billion yen ($343 million). It reported third-quarter operating profit of 9.2 billion yen versus the average analyst estimate of 12 billion yen.
Meanwhile, shares of peer Fast Retailing Co rebounded 2.2%, recouping most of its post-results loss. The Uniqlo parent similarly lowered its outlook amid the impact of political protests in Hong Kong and Japan’s trade spat with South Korea.
“Both of them suffer from issues in Korea and Hong Kong, but the consensus is that for Fast Retailing, the problems are isolated and therefore temporary,” Jefferies Japan Ltd analyst Michael Jon Allen said by phone. “But for Ryohin Keikaku, investors think it’s a structural problem, because it’s affecting across all regions.”

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