Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

Not many apparel-based retailers improved performance during 2020 but <a href="https://www.smartkarma.com/entities/nishimatsuya-chain-co-ltd" target="_blank" data-smartkarma-citation="entities:13375:1" rel="noopener">Nishimatsuya Chain (7545 JP)</a> was an exception, with its suburban locations, reasonable prices and house-bound children and parents all contributing.Whether the children’s retailer can continue the momentum depends on private brands and more non-apparel. The children’s market remains wide open for any brand or retailer with high cost-performance given market fragmentation.

Not many apparel-based retailers improved performance during 2020 but Nishimatsuya Chain (7545 JP) was an exception, with its suburban locations, reasonable prices and house-bound children and parents all contributing.Whether the children’s retailer can continue the momentum depends on private brands and more non-apparel. The children’s market remains wide open for any brand or retailer with high cost-performance given market fragmentation.

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> delivered 2QFY21 results on 9th April 2021 with revenue and operating profit falling behind consensus estimates by ¥21.5bn (4%) and ¥6.7bn (11%) respectively. However, the company raised its FY21 consolidated revenue and operating income guidance by ¥10.0bn each to ¥2,210bn and ¥255.0bn respectively.Even following a 20% decline in the share price in the last couple of months, Fast Retailing’s valuation remains extremely expensive. Thus, we would not rush to buy this dip.

Fast Retailing (9983 JP) delivered 2QFY21 results on 9th April 2021 with revenue and operating profit falling behind consensus estimates by ¥21.5bn (4%) and ¥6.7bn (11%) respectively. However, the company raised its FY21 consolidated revenue and operating income guidance by ¥10.0bn each to ¥2,210bn and ¥255.0bn respectively.Even following a 20% decline in the share price in the last couple of months, Fast Retailing’s valuation remains extremely expensive. Thus, we would not rush to buy this dip.

Fast Retailing: Trying to Pass Benefits of Cost Cutting to Customers

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Thematic (Sector/Industry)

• LARGER CAP RESULTS - 8th APRIL •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/593/original/image_50653961221617916076677.png?1617916077" class="editor-image img-responsive" data-smartkarma-image-id="199593"></figure><div class="content-caption"> Source for all charts &amp; tables: Japan Analytics </div>RESULTS - 48% of Thursday's 29 results announcements scored positively; however, of the largest caps, only <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> and <a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift (3697 JP)</a> had that distinction. <a href="https://www.smartkarma.com/entities/aeon-mall-co-ltd" target="_blank" data-smartkarma-citation="entities:5262:1" rel="noopener">AEON Mall (8905 JP)</a> and <a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson Inc (2651 JP)</a>, both of which had revised down in the recent weeks, anchored the bottom of the table.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/595/original/image_25682293741617916377763.png?1617916379" class="editor-image img-responsive" data-smartkarma-image-id="199595"></figure>• FORECASTS/REVISIONS - 8th APRIL •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/596/original/image_76440807551617916411847.png?1617916413" class="editor-image img-responsive" data-smartkarma-image-id="199596"></figure>FORECASTS/REVISIONS - Conversely, 81% of annual forecasts were positive, with Aeon Mall and Lawson particularly optimistic about FY22. Fast Retailing, which only has six months left to forecast, was more circumspect. For the second year in a row, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I (3382 JP)</a> did not make an initial forecast with the full-year results. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/597/original/image_28112384961617916762514.png?1617916763" class="editor-image img-responsive" data-smartkarma-image-id="199597"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/598/original/image_37677060271617916798074.png?1617916799" class="editor-image img-responsive" data-smartkarma-image-id="199598"></figure>

• LARGER CAP RESULTS - 8th APRIL • Source for all charts &amp; tables: Japan Analytics RESULTS - 48% of Thursday's 29 results announcements scored positively; however, of the largest caps, only Fast Retailing (9983 JP) and Shift (3697 JP) had that distinction. AEON Mall (8905 JP) and Lawson Inc (2651 JP), both of which had revised down in the recent weeks, anchored the bottom of the table.• FORECASTS/REVISIONS - 8th APRIL •FORECASTS/REVISIONS - Conversely, 81% of annual forecasts were positive, with Aeon Mall and Lawson particularly optimistic about FY22. Fast Retailing, which only has six months left to forecast, was more circumspect. For the second year in a row, Seven &amp; I (3382 JP) did not make an initial forecast with the full-year results. 

🇯🇵 JAPAN • Results & Revisions 04/​​​​08 - 7&I Fast Re and Hisamitsu Dreams

• LARGE CAP RESULTS - 5th APRIL •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/987/original/image_46394735821617656683433.png?1617656684" class="editor-image img-responsive" data-smartkarma-image-id="198987"></figure><div class="content-caption"> Source for all charts &amp; tables: Japan Analytics</div>RESULTS - Of Friday's 23 results, only 10 scored positively; however, 73% of annual revisions were positive. Of the larger caps, <a href="https://www.smartkarma.com/entities/shimamura-co-ltd" target="_blank" data-smartkarma-citation="entities:15213:1" rel="noopener">Shimamura (8227 JP)</a> had a third-successive positive quarter, while <a href="https://www.smartkarma.com/entities/kewpie-corp" target="_blank" data-smartkarma-citation="entities:10681:1" rel="noopener">Kewpie (2809 JP)</a> and <a href="https://www.smartkarma.com/entities/adastria-co-ltd" target="_blank" data-smartkarma-citation="entities:11895:1" rel="noopener">Adastria (2685 JP)</a> had double-digit year-on-year sales declines, and drugstore <a href="https://www.smartkarma.com/entities/create-sd-holdings-co" target="_blank" data-smartkarma-citation="entities:12945:1" rel="noopener">Create SD (3148 JP)</a> saw profits decline.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/989/original/image_51513331531617657092402.png?1617657093" class="editor-image img-responsive" data-smartkarma-image-id="198989"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/990/original/image_56921939741617657150504.png?1617657151" class="editor-image img-responsive" data-smartkarma-image-id="198990"></figure>• LARGER CAP FORECASTS/REVISIONS - 5th APRIL • <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/991/original/image_89489650351617657220460.png?1617657221" class="editor-image img-responsive" data-smartkarma-image-id="198991"></figure>FORECASTS/REVISIONS - Adastria offset its weak results with a bullish FY22 forecast, as did restaurant chain <a href="https://www.smartkarma.com/entities/ichibanya-co-ltd" target="_blank" data-smartkarma-citation="entities:2914:1" rel="noopener">Ichibanya (7630 JP)</a>. Shimamura's interim forecast was much more bullish than for the full year. <a href="https://www.smartkarma.com/entities/kobe-steel-ltd" target="_blank" data-smartkarma-citation="entities:209:1" rel="noopener">Kobe Steel (5406 JP)</a> revised up further into the black, while <a href="https://www.smartkarma.com/entities/jins-holdings-inc" target="_blank" data-smartkarma-citation="entities:12002:1" rel="noopener">JINS (3046 JP)</a> revised its interim and full-year sales and operating income slightly lower.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/992/original/image_65197346461617657668077.png?1617657668" class="editor-image img-responsive" data-smartkarma-image-id="198992"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/993/original/image_33740867171617657704461.png?1617657705" class="editor-image img-responsive" data-smartkarma-image-id="198993"></figure>

• LARGE CAP RESULTS - 5th APRIL • Source for all charts &amp; tables: Japan AnalyticsRESULTS - Of Friday's 23 results, only 10 scored positively; however, 73% of annual revisions were positive. Of the larger caps, Shimamura (8227 JP) had a third-successive positive quarter, while Kewpie (2809 JP) and Adastria (2685 JP) had double-digit year-on-year sales declines, and drugstore Create SD (3148 JP) saw profits decline.• LARGER CAP FORECASTS/REVISIONS - 5th APRIL • FORECASTS/REVISIONS - Adastria offset its weak results with a bullish FY22 forecast, as did restaurant chain Ichibanya (7630 JP). Shimamura's interim forecast was much more bullish than for the full year. Kobe Steel (5406 JP) revised up further into the black, while JINS (3046 JP) revised its interim and full-year sales and operating income slightly lower.

🇯🇵 JAPAN • Results & Revisions 04/​05 - Shimamura & JINS

<a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> shares have dropped 13.6% since the BOJ announced changes to the way ETF buying was conducted on 19th March 2021 and 23.6% from all time high on 25th February 2021.Even so, the company is still valued at 26.2x FY+2 EV/EBIT compared to its past three-year average of 20.7x and 41.3x FY+2 PER compared to compared to the three-year average of 34.1x.We believe that there is still considerable downside risks to Fast Retailing’s share price and would not rush into this dip at this moment.

Fast Retailing (9983 JP) shares have dropped 13.6% since the BOJ announced changes to the way ETF buying was conducted on 19th March 2021 and 23.6% from all time high on 25th February 2021.Even so, the company is still valued at 26.2x FY+2 EV/EBIT compared to its past three-year average of 20.7x and 41.3x FY+2 PER compared to compared to the three-year average of 34.1x.We believe that there is still considerable downside risks to Fast Retailing’s share price and would not rush into this dip at this moment.

Down 24% From February Peak, But Still Has a Long Way to Go Before The Longs Get Back On Board

Japan

FAST RETAILING CO., LTD. operates a chain of clothing stores, UNIQLO, throughout Japan and in other markets overseas including UK, China, Hong Kong, South Korea, US, France, Singapore and Russia.  The Company designs, manufactures, and retails its own line of casual clothing.

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Fast Retailing (9983 JP)

Nishimatsuya Chain Thrives in Covid

Nishimatsuya Chain thrived in the pandemic but can it continue to build on this momentum? The children's market in Japan may be contracting but is...

Michael Causton

Fast Retailing: Trying to Pass Benefits of Cost Cutting to Customers

Fast Retailing's 2QFY21 results missed consensus but the company raised its FY21 revenue and operating income guidance by ¥10.0bn each to ¥2,210bn...

Oshadhi Kumarasiri

🇯🇵 JAPAN • Results & Revisions 04/08 - 7&I Fast Re and Hisamitsu Dreams

RESULTS - 48% of Thursday's 29 results announcements scored positively; however, of the largest caps, only Fast Retailing (9983 JP) and Shift (3697...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 04/05 - Shimamura & JINS

RESULTS - Of Friday's 23 results, only 10 scored positively; however, 73% of annual revisions were positive. Of the larger caps, Shimamura (8227...

Campbell Gunn

Down 24% From February Peak, But Still Has a Long Way to Go Before The Longs Get Back On Board

Fast Retailing's shares have dropped 13.6% since the BOJ announced changes to the way ETF buying was conducted on 19th March 2021 and 23.6% from...

Oshadhi Kumarasiri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Nishimatsuya Chain Thrives in Covid

Nishimatsuya Chain thrived in the pandemic but can it continue to build on this momentum? The children's market in Japan may be contracting but is...

Michael Causton

Fast Retailing: Trying to Pass Benefits of Cost Cutting to Customers

Fast Retailing's 2QFY21 results missed consensus but the company raised its FY21 revenue and operating income guidance by ¥10.0bn each to ¥2,210bn...

Oshadhi Kumarasiri

🇯🇵 JAPAN • Results & Revisions 04/​​​​08 - 7&I Fast Re and Hisamitsu Dreams

RESULTS - 48% of Thursday's 29 results announcements scored positively; however, of the largest caps, only Fast Retailing (9983 JP) and Shift (3697...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 04/​05 - Shimamura & JINS

RESULTS - Of Friday's 23 results, only 10 scored positively; however, 73% of annual revisions were positive. Of the larger caps, Shimamura (8227...

Campbell Gunn

Down 24% From February Peak, But Still Has a Long Way to Go Before The Longs Get Back On Board

Fast Retailing's shares have dropped 13.6% since the BOJ announced changes to the way ETF buying was conducted on 19th March 2021 and 23.6% from...

Oshadhi Kumarasiri

🇯🇵 JAPAN • Results & Revisions 04/08 - 7&I Fast Re and Hisamitsu Dreams

🇯🇵 JAPAN • Results & Revisions 04/05 - Shimamura & JINS