Village Vanguard announced its consolidated financial results for the fiscal year ending May 2013. The group's consolidated sales increased 1.9% year-on-year to ¥43.765 billion, while operating income decreased 25.8% to ¥2.525 billion and ordinary income decreased 23.1% to ¥2.703 billion. The net loss for the fiscal year was ¥3.833 billion. The same period last year saw a profit of ¥1.553 billion. Despite steady growth, this fiscal year marked the first loss since the company's listing. Overall sales increased during the fiscal year due to the consolidation of directly managed and franchised stores and strong sales at Titicaca, a subsidiary selling ethnic goods and clothing. However, operating income declined significantly due to higher labor costs resulting from an expansion in stores and increased selling, general, and administrative expenses due to the impact of POS installation costs. Furthermore, the company revised its inventory valuation standards, resulting in the recording of an extraordinary loss of approximately 4.6 billion yen in inventory valuation losses.
By segment, Village Vanguard Corporation's sales decreased 3.0% year-on-year to 37.758 billion yen. Operating profit decreased 35.5% to 1.024 billion yen. Titicaca's sales increased 46.1% year-on-year to 5.798 billion yen. Operating profit increased 23.6% to 142 million yen.
In order to strengthen its management structure, Village Vanguard plans to change its inventory valuation standards, utilize various analytical data from POS systems, and implement a scrap-and-build strategy for stores. At the same time, it will review and reduce other selling, general, and administrative expenses. From a store perspective, it aims to improve the operating profit margin per store and promote new store openings.
For the next fiscal year, sales are expected to increase 7.3% year-on-year to 46,945 million yen, operating profit is expected to increase 4.4% year-on-year to 2,635 million yen, ordinary profit is expected to increase 2.7% year-on-year to 2,775 million yen, and net profit for the period is expected to be 964 million yen.
By segment, Village Vanguard Corporation's sales decreased 3.0% year-on-year to 37.758 billion yen. Operating profit decreased 35.5% to 1.024 billion yen. Titicaca's sales increased 46.1% year-on-year to 5.798 billion yen. Operating profit increased 23.6% to 142 million yen.
In order to strengthen its management structure, Village Vanguard plans to change its inventory valuation standards, utilize various analytical data from POS systems, and implement a scrap-and-build strategy for stores. At the same time, it will review and reduce other selling, general, and administrative expenses. From a store perspective, it aims to improve the operating profit margin per store and promote new store openings.
For the next fiscal year, sales are expected to increase 7.3% year-on-year to 46,945 million yen, operating profit is expected to increase 4.4% year-on-year to 2,635 million yen, ordinary profit is expected to increase 2.7% year-on-year to 2,775 million yen, and net profit for the period is expected to be 964 million yen.
