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Investing.com -- Shimamura Co. reported first quarter operating profit of ¥15.3 billion, representing a 5.0% increase year-over-year and exceeding the IFIS consensus by 5.5%.
The Japanese retailer posted sales of ¥168.4 billion for the quarter, a 2.4% rise compared to the same period last year. Despite this growth, sales slightly missed the company’s guidance.
During a results briefing, Shimamura’s management stated that the first quarter operating profit was broadly in line with their outlook.
The company’s Shimamura format experienced weak bedding and interior sales, which management attributed to numerous rainy weekends during the quarter. Meanwhile, the Birthday format saw delays in initial sales momentum for summer goods.
Gross margin improved by 0.9 percentage points year-over-year, driven by better markups following price revisions and increased sales of high value-added products. The company may have benefited from reduced markdowns at its Shimamura format following winter inventory reductions earlier in the year.
Selling, general and administrative expenses increased by 5.1% compared to the same period last year, which was lower than the company’s first-half guidance of 6.7%. The company managed to curb advertising spending compared to its initial plan.
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