Shares of Ryohin Keikaku, the owner of the popular brand MUJI, experienced a significant surge as the company projected a substantial improvement in earnings for the upcoming fiscal year. This expected boost is attributed, in part, to the expansion of their store network.
As of Monday morning, the company’s shares witnessed an 11% increase to reach 2,007.0 yen. The rise had peaked at 15% earlier.
Ryohin Keikaku announced last Friday, after market close, that it anticipates a 50% rise in net profit to reach Y33.00 billion ($220.6 million) by the end of the fiscal year in August 2024. This optimistic outlook is based on their strategic plans to open new stores in Japan, China, Thailand, and Vietnam, while simultaneously closing unprofitable ones in the U.S. and Europe.
Moreover, the company foresees a 10% growth in revenue to touch Y640.00 billion this fiscal year. The anticipated increase is expected to result from the expansion of their store network and a positive boost in same-store and e-commerce sales globally.
A significant highlight is Ryohin Keikaku’s projection to increase its total number of stores to 1,331 by the end of this fiscal year. This expansion will bring their count up from 1,188 stores at the close of August.
Despite a 10% decline in net profit to Y22.05 billion for the year ending in August, largely due to increased raw material costs, the company witnessed a 17% surge in revenue reaching Y581.41 billion. This growth was primarily influenced by their successful new store openings.