Saturday, October 5, 2013
Yoshinoya Lowers Earnings Outlook As Price Cuts Flop
TOKYO (Nikkei)--Yoshinoya Holdings Co. (9861) downgraded its full-year earnings forecast on Friday because price reductions for its signature beef bowls failed to attract the hordes of customers anticipated.
The restaurant chain now expects a consolidated net profit of 250 million yen for the year through February, a sharp decrease from its earlier projection of 1 billion yen. It posted a net loss of 364 million yen the previous year.
Overall sales are projected to grow 4% to 172 billion yen, 1 billion yen lower than previously forecast. Same-store sales at its domestic beef bowl restaurants are seen increasing 3-4%, short of the target by about 10 percentage points.
With the effect of April's 100 yen price cuts fading, same-store sales in September slipped 1.7% on the year, the first decline in six months. Poor weather, including typhoons, was also a factor that kept customers away. Sales per customer fell 8.4% that month, while customer traffic grew just 7.3%.
Yoshinoya had anticipated a drop in purchasing costs after import restrictions on U.S. beef were eased in February. But prices barely declined due to the weaker yen and growing demand in Asia outside Japan, according to a company official. Operating profit is expected to fall 15% to 1.6 billion yen this fiscal year, partly due to higher utility expenses.
(The Nikkei, Oct. 5 morning edition)