'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Thematic (Sector/Industry)

<div><p style="text-align: center;"><strong>• BEST &amp; WORST • </strong></p></div><div>
<p>We resume our results &amp; revision updates after a Christmas break as the February/May/ August/November year-end cohort of companies kick off disclosure. Friday's best and worst pair are retailers <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori (9843 JP)</a> and <a href="https://www.smartkarma.com/entities/takashimaya-co-ltd" target="_blank" data-smartkarma-citation="entities:370:1" rel="noopener">Takashimaya (8233 JP) </a>although we would note that earnings momentum is fading for the former and bottoming out for the latter. With Nitori mean-reverting from being Overbought in August, Takashimaya has outperformed Nitori by 8% over the last three months. As the impact of COVID wanes by the Sroing, we expect this performance 'gap' to close further in 2021.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/180/167/original/2020-12-28_06-14-04.png?1609103740" class="editor-image img-responsive" data-smartkarma-image-id="180167"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/180/168/original/2020-12-28_06-16-21.png?1609103792" class="editor-image img-responsive" data-smartkarma-image-id="180168"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/180/169/original/2020-12-28_06-22-11.png?1609104143" class="editor-image img-responsive" data-smartkarma-image-id="180169"></figure></section><p></p>
</div>

• BEST &amp; WORST • 
We resume our results &amp; revision updates after a Christmas break as the February/May/ August/November year-end cohort of companies kick off disclosure. Friday's best and worst pair are retailers Nitori (9843 JP) and Takashimaya (8233 JP) although we would note that earnings momentum is fading for the former and bottoming out for the latter. With Nitori mean-reverting from being Overbought in August, Takashimaya has outperformed Nitori by 8% over the last three months. As the impact of COVID wanes by the Sroing, we expect this performance 'gap' to close further in 2021.



🇯🇵 JAPAN • Results & Revisions 12/​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​25 - Nitori & Takashimaya

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. 

<p>Last year the Japanese fashion market contracted below ¥16 trillion for the first time in more than a decade and this year is proving much, much worse.</p><p>In the last big crises – the 2008 financial shock and 2011 triple disasters – demand also fell dramatically and then recovered. But <strong>this time is different: as well as a fall in demand, the Covid-19 crisis has also led to a marked fall in supply</strong>.</p><p>But there is some good news. Above all, Japanese are not travelling either at home or abroad and they are also eating out less.</p><p><strong>In the seven months to July, the average working household had cumulatively saved a net ¥1.25 million, more than 11 months in both 2018 and 2019 and more than an entire year before 2018.</strong></p><p><strong>Suddenly wallets are full</strong>, which could mean more money to spend on treats – good news for luxury but also any brand or retailing offering something fun to divert from the all bleak news.</p><p>While the short-term outlook remains dark, the medium-term should see both a return to a more stable trading environment and something of a splurge too as people express their relief that it’s all over.</p><p>The following is a complete review of the Japanese apparel/fashion sector including rankings of the top 100 retailers by sales, top by profit, sales growth, and store openings/closures.</p><p><em>This insight is labelled bullish because the Japanese apparel/fashion sector will rebound from the current crisis although the long-term outlook for this sector is stagnant stability rather than significant growth. However, within this, there are significant growth stocks as detailed below.</em></p>

Last year the Japanese fashion market contracted below ¥16 trillion for the first time in more than a decade and this year is proving much, much worse.In the last big crises – the 2008 financial shock and 2011 triple disasters – demand also fell dramatically and then recovered. But this time is different: as well as a fall in demand, the Covid-19 crisis has also led to a marked fall in supply.But there is some good news. Above all, Japanese are not travelling either at home or abroad and they are also eating out less.In the seven months to July, the average working household had cumulatively saved a net ¥1.25 million, more than 11 months in both 2018 and 2019 and more than an entire year before 2018.Suddenly wallets are full, which could mean more money to spend on treats – good news for luxury but also any brand or retailing offering something fun to divert from the all bleak news.While the short-term outlook remains dark, the medium-term should see both a return to a more stable trading environment and something of a splurge too as people express their relief that it’s all over.The following is a complete review of the Japanese apparel/fashion sector including rankings of the top 100 retailers by sales, top by profit, sales growth, and store openings/closures.This insight is labelled bullish because the Japanese apparel/fashion sector will rebound from the current crisis although the long-term outlook for this sector is stagnant stability rather than significant growth. However, within this, there are significant growth stocks as detailed below.

Japan Fashion Retailing Complete Review 2019-20: Pain Now but a Recovery Is Certain

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/oisix-ra-daichi-inc" target="_blank" data-smartkarma-citation="entities:10145:1" rel="noopener">Oisix ra daichi (3182 JP)</a> has managed to grow rapidly during the pandemic and make a much improved profit at the same time. The business remains small compared to supermarkets, but has a unique position as the only pureplay retailer for fresh foods. This has attracted new partners, the latest of which are Ootoya and Ebay's Qoo10.</p>
<p>Given current momentum to buy food online, even if competitors are also expanding, Oisix has now updated its forecasts, expecting sales to hit ¥90 billion, a 15.4% increase with operating profit coming in at ¥5 billion.</p>

Oisix ra daichi (3182 JP) has managed to grow rapidly during the pandemic and make a much improved profit at the same time. The business remains small compared to supermarkets, but has a unique position as the only pureplay retailer for fresh foods. This has attracted new partners, the latest of which are Ootoya and Ebay's Qoo10.
Given current momentum to buy food online, even if competitors are also expanding, Oisix has now updated its forecasts, expecting sales to hit ¥90 billion, a 15.4% increase with operating profit coming in at ¥5 billion.

Oisix Thrives in Crisis, Ties with Ootoya

<p>At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.</p>
<p>Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.</p>
<p>Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.</p>
<p>The following is an in-depth review of Japan's retail sector, providing:</p>
<ul>
<li>An overview of consumer demand and retail performance</li>
<li>Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.</li>
<li>Rankings:
<ul>
<li>Market share and size by sector/format</li>
<li>By sales for all retailers with sales over ¥250 billion</li>
<li>By gross and operating margins, split by format and category.</li>
</ul>
</li>
</ul>
<p>As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. <a href="https://www.smartkarma.com/insights/the-japan-retail-review-winners-and-losers-in-japanese-retailing-part-i" target="_blank" rel="noopener">Part I, which provides a quick overview of all retailing, can be read here</a>.</p>

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.
Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.
Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.
The following is an in-depth review of Japan's retail sector, providing:

An overview of consumer demand and retail performance
Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.
Rankings:

Market share and size by sector/format
By sales for all retailers with sales over ¥250 billion
By gross and operating margins, split by format and category.



As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. Part I, which provides a quick overview of all retailing, can be read here.

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/148/784/original/2020-07-30_08-23-32.png?1596065031" class="editor-image img-responsive" data-smartkarma-image-id="148784"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/148/785/original/2020-07-30_08-24-39.png?1596065092" class="editor-image img-responsive" data-smartkarma-image-id="148785"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/148/786/original/2020-07-30_08-25-16.png?1596065140" class="editor-image img-responsive" data-smartkarma-image-id="148786"></figure><div class="content-caption">Source • Japan Analytics</div>
<p><strong>29th JULY</strong> - As the pace of announcements picks up, <a href="https://www.smartkarma.com/entities/ana-holdings-inc" target="_blank" data-smartkarma-citation="entities:5308:1" rel="noopener">ANA (9202 JP)</a>, <a href="https://www.smartkarma.com/entities/showa-corp" target="_blank" data-smartkarma-citation="entities:15079:1" rel="noopener">Showa (7274 JP)</a>, and <a href="https://www.smartkarma.com/entities/isetan-mitsukoshi-holdings-ltd" target="_blank" data-smartkarma-citation="entities:18871:1" rel="noopener">Isetan Mitsukoshi (3099 JP)</a> were the three 'worst' large-cap results yesterday in terms of our scoring methodology. In the<strong> DETAIL</strong> below, we cover all the results and forecasts for companies with a market cap of over ¥100 billion and make some trading suggestions.</p>
<hr>
<p style="text-align: center;"><strong>DAILY STATS</strong></p>
</div><hr><div><p style="text-align: center;"><strong>85 Quarterly Results</strong></p></div><div><ul>
<li>
<strong>Results Score</strong>: 30 Positive / 5 Neutral / 50 Negative</li>
<li>
<strong>Average Results Score Change:</strong> -2.4</li>
<li>
<strong>Average % Change in Revenue:</strong> -9.7% Quarter YoY / -2.7% Rolling TTM YoY </li>
<li>
<strong>Average Operating Profit Margin Change:</strong> -1.0ppt</li>
<li>
<strong>Percentage Making Quarterly Losses:</strong> 24%</li>
</ul></div><hr><div><p style="text-align: center;"><br><strong>35 Annual • 15 Interim Forecasts/Revisions</strong></p></div><div><ul>
<li>
<strong>Annual Forecast/Revision Score:</strong> 6 Positive / 1 Neutral / 28 Negative</li>
<li>
<strong>Interim Forecast/Revision Score Change: 4 </strong>Positive / 0 Neutral / 11 Negative</li>
<li>
<strong>Average Forecast/Revision Score Change:</strong> -12.8</li>
</ul></div>


Source • Japan Analytics
29th JULY - As the pace of announcements picks up, ANA (9202 JP), Showa (7274 JP), and Isetan Mitsukoshi (3099 JP) were the three 'worst' large-cap results yesterday in terms of our scoring methodology. In the DETAIL below, we cover all the results and forecasts for companies with a market cap of over ¥100 billion and make some trading suggestions.

DAILY STATS
85 Quarterly Results

Results Score: 30 Positive / 5 Neutral / 50 Negative

Average Results Score Change: -2.4

Average % Change in Revenue: -9.7% Quarter YoY / -2.7% Rolling TTM YoY 

Average Operating Profit Margin Change: -1.0ppt

Percentage Making Quarterly Losses: 24%
 35 Annual • 15 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 6 Positive / 1 Neutral / 28 Negative

Interim Forecast/Revision Score Change: 4 Positive / 0 Neutral / 11 Negative

Average Forecast/Revision Score Change: -12.8


🇯🇵 JAPAN • Results & Revisions 29th July - Kao, SMFG, Nomura, NRI, Asahi Holdings, NRE

Japan

Isetan Mitsukoshi Holdings Ltd. is a holding company established through a merger of Mitsukoshi and Isetan. The group operates department stores nationwide, selling clothing, foods, household goods, cosmetics and general merchandise.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
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Isetan Mitsukoshi Holdings Ltd (3099 JP)

🇯🇵 JAPAN • Results & Revisions 12/25 - Nitori & Takashimaya

We resume our results & revision updates after a Christmas break. Friday's best and worst pair are retailers Nitori (9843 JP) and Takashimaya...

Campbell Gunn

Japan Fashion Retailing Complete Review 2019-20: Pain Now but a Recovery Is Certain

The following is a complete, in-depth review of the Japanese apparel/fashion sector covering key trends, rankings of the top 100 by sales and top...

Michael Causton

Oisix Thrives in Crisis, Ties with Ootoya

Oisix Ra Daichi is a quality brand in a nascent market: online food retailing where e-commerce has less than 3% share. It is a huge prize and...

Michael Causton

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 29th July - Kao, SMFG, Nomura, NRI, Asahi Holdings, NRE

29th JULY - As the pace of announcements picks up, ANA (9202 JP), Showa (7274 JP), and Isetan Mitsukoshi (3099 JP) were the three 'worst'...

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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🇯🇵 JAPAN • Results & Revisions 12/​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​25 - Nitori & Takashimaya

We resume our results & revision updates after a Christmas break. Friday's best and worst pair are retailers Nitori (9843 JP) and Takashimaya...

Campbell Gunn

Japan Fashion Retailing Complete Review 2019-20: Pain Now but a Recovery Is Certain

The following is a complete, in-depth review of the Japanese apparel/fashion sector covering key trends, rankings of the top 100 by sales and top...

Michael Causton

Oisix Thrives in Crisis, Ties with Ootoya

Oisix Ra Daichi is a quality brand in a nascent market: online food retailing where e-commerce has less than 3% share. It is a huge prize and...

Michael Causton

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 29th July - Kao, SMFG, Nomura, NRI, Asahi Holdings, NRE

29th JULY - As the pace of announcements picks up, ANA (9202 JP), Showa (7274 JP), and Isetan Mitsukoshi (3099 JP) were the three 'worst'...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 12/25 - Nitori & Takashimaya