Paul Tudor Jones sees potential market rally after late October
Introduction & Market Context
AEON Co., Ltd. (TYO:8267) reported record-high operating revenue and profit for the first half of fiscal year 2025, according to the company’s presentation on October 14, 2025. The Japanese retail giant demonstrated strong performance across multiple business segments, with its private brand "TOPVALU" playing a crucial role in driving sales growth amid rising consumer prices.
The company’s results highlight successful implementation of its digital transformation initiatives and cost structure reforms, particularly in its General Merchandising Store (GMS) business where operating losses were significantly reduced.
Quarterly Performance Highlights
AEON achieved consolidated operating revenue of ¥5,189.9 billion for the first half of fiscal 2025, representing a 3.8% year-over-year increase. Operating profit surged by 19.8% to ¥118.1 billion, while ordinary profit rose 18.5% to ¥106.4 billion. Profit attributable to owners of the parent company increased by 9.1% to ¥4.0 billion.
As shown in the following consolidated results table, AEON demonstrated solid growth across all major financial metrics:
The company’s performance has shown consistent improvement over recent quarters, establishing a clear upward trajectory in both revenue and profitability:
A key driver of AEON’s growth has been the strong performance of its private brand "TOPVALU," which saw significant sales increases across all business segments. The company’s strategy of supporting customers during periods of rising prices through its private brand offerings has proven effective, with Group Total TOPVALU sales growing by 11.7% year-over-year.
The following chart illustrates TOPVALU’s sales growth by segment and category:
Detailed Financial Analysis
AEON’s General Merchandising Store (GMS) business showed remarkable improvement, reducing operating losses from ¥16 billion in the first half of fiscal 2024 to ¥8.2 billion in the current period. This turnaround was primarily driven by store-level digital transformation initiatives and cost structure reforms.
The following chart details the GMS business performance:
A deeper analysis of AEON Retail, the company’s core GMS business, reveals that operating losses were reduced from ¥18.5 billion to ¥8.2 billion. This improvement was achieved through enhanced operational efficiency, workforce reallocation, and improved labor productivity through self-checkout systems and AI-based ordering.
The Supermarket (SM) business delivered a double-digit increase in operating profit, reaching ¥12.9 billion. This growth was driven by TOPVALU expansion, strategic pricing, structural cost reforms, and improved labor productivity. The company also noted the successful expansion of its My Basket stores.
AEON’s Health & Wellness business demonstrated strong performance with double-digit profit growth attributed to private brand expansion and operational efficiency improvements. Both the retail category and dispensing pharmacy category contributed to increased revenue.
The Financial Services business showed increased revenue driven by transaction volumes and receivables balances. AEON Pay membership growth and advanced credit assessment were highlighted as key factors in this segment’s success.
Strategic Initiatives
AEON’s presentation emphasized several strategic initiatives that have contributed to its strong performance:
1. Private Brand Expansion: TOPVALU products have seen significant growth across all segments, with particularly strong performance in price-focused (BESTPRICE) items, which grew by 13.9% year-over-year.
2. Digital Transformation: Implementation of self-checkout systems (Regi-Go) in 287 stores and AI-based ordering in 370 stores has improved operational efficiency and labor productivity.
3. Cost Structure Reforms: The company has optimized its cost structure through workforce reallocation and equipment efficiency, contributing to improved profitability.
4. International Expansion: AEON’s international business has shown growth, particularly in ASEAN markets, with AEON Malaysia and AEON Vietnam specifically mentioned as contributors.
Forward-Looking Statements
For the full fiscal year 2025, AEON forecasts operating revenue of ¥10,500.0 billion, representing a 3.6% year-over-year increase. The company expects operating profit to reach ¥270.0 billion (+13.6% YoY), ordinary profit of ¥250.0 billion (+11.5% YoY), and profit attributable to owners of the parent of ¥40.0 billion (+47.2% YoY).
The company plans to continue its positive momentum from Q1, accelerate price strategies, and achieve its full-year earnings targets. It’s worth noting that the impact of full ownership and consolidation of subsidiaries is not reflected in the forecast.
Additionally, AEON announced a 3-for-1 stock split and provided information on its dividend policy. For FY2025, the company plans to pay an ordinary dividend of 20 yen per share for the end of the second quarter and 7 yen per share (equivalent to 21 yen before stock split adjustment) for the fiscal year-end, for a total of 27 yen per share (equivalent to 41 yen before adjustment).
AEON’s consolidated balance sheet at the end of August 2025 shows total assets of ¥14,498.8 billion (excluding financial subsidiaries), with cash and deposits of ¥1,360.5 billion and shareholders’ equity of ¥1,083.5 billion.
With record-high performance across multiple business segments and successful implementation of strategic initiatives, AEON appears well-positioned to achieve its full-year targets and maintain its growth trajectory in the Japanese retail market.
Full presentation:
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