Wal-Mart Japan Unit Sees Wider Net Loss in 2006
Wal-Mart Stores' Japanese subsidiary, Seiyu, on Tuesday forecast a wider net loss for 2006 due to sluggish sales, making it its fifth straight year of losses. Seiyu estimated its group net loss at 55.8 billion yen ($459 million) instead of its earlier projection of a 54.5 billion yen loss for the year ended December. The new forecast is in line with a consensus projection by four analysts for 55.6 billion yen, according to Reuters Estimates.
Its 2006 same-store sales showed their first year-on-year rise in 15 years at a 0.6% increase, but spokesman Yasuhisa Nezu said that was below the company's target.
Wal-Mart , the world's largest retailer, owns 53% of Seiyu and sees it as a key to expanding in the Japanese market.
However, the Japanese retailer has yet to return to profitability despite more than $1 billion investments by Wal-Mart since it took a small stake in Seiyu in 2002.
Wal-Mart Vice Chairman Michael Duke told the Nikkei business daily in an interview that the company might look for more acquisition opportunities in Japan, although spokeswoman Amy Wyatt said on Monday it was more focused on expanding business at the Seiyu chain.
Before the announcement, Seiyu shares closed up 2.6% at 195 yen, outperforming a 0.11% rise in the Nikkei average.