Okuwa swung to a first-half operating loss and sharply revised down its full-year outlook at the end of last week. Same-store sales are expected to fall short of plan, while raw material costs and foreign-exchange effects are said to be weighing on profit.
At the end of last week, Okuwa announced a downward revision to its earnings forecast, with first-half operating results deteriorating from the previously projected profit to a loss of ¥60 million. Consumers’ increased thriftiness amid rising prices is believed to have had an impact, and same-store sales are now expected to fall short of plan.
The full-year earnings forecast was sharply reduced from the previous ¥2.1 billion to ¥1.3 billion, a projected decrease of 30.8% year on year. Higher raw material prices and foreign-exchange movements are pushing profit margins below expectations.