JM Holdings plunged on the 4th after cutting its earnings forecasts for the previous fiscal year. Revenue remained solid, but delayed pass-through of higher procurement costs led to an outlook for lower earnings.
JM Holdings opened sharply lower on the 4th after cutting its earnings forecasts for the fiscal year ended July, announced the previous day. The indicative price fell from the morning session, with the stock temporarily declining to ¥1,363.
The company operates supermarkets including Hanamasa the Meat and others. Consolidated operating profit for the previous fiscal year was ¥9.0 billion, down 10.4% from the fiscal year before last and below the previous forecast of ¥10.9 billion.
Supported by strong sales at existing stores, revenue exceeded the plan, rising to ¥198.5 billion, up 6.6% year on year, compared with the plan of ¥196.0 billion. However, the company was unable to offset higher procurement costs through price increases.
The net profit forecast was cut from ¥7.0 billion to ¥4.9 billion, down 24.1% from the fiscal year before last. The decline in the profitability of subsidiary stores also weighed on results, as the company recorded more than ¥1.0 billion in impairment losses as an extraordinary loss. The market was left with a strong impression of the intensifying competitive environment.
In the market on the 4th, selling came first following the downward revision to the earnings outlook, and the decline was wider than a year earlier.