Japan retailing sector: 26/8 Q4 and 27/2 Q2 results — Fast Retailing, Seven & i Holdings, Sugi Holdings

Nomura quick note on the Japan retailing sector covering Fast Retailing, Seven & i Holdings and Sugi Holdings. Fast Retailing [9983] (Neutral): 26/8 Q4 business profits rose 30% y-y to ¥718.5bn, broadly in line with our forecast; the company guides for 27/8 business profits to rise 16% y-y to ¥830.0bn, with growth mainly in overseas operations; first impression in line as the share price has already recovered to a certain extent. Seven & i Holdings [3382] (Neutral): 27/2 Q2 operating profits fell 11% y-y to ¥127.2bn, slightly below our forecast, and management's measures offered little new; first impression slightly negative, with few grounds for optimism as consumers remain budget-minded. Sugi Holdings [7649] (Neutral): 27/2 Q2 operating profits down 1% y-y at ¥12.5bn, gross margin 31.7%; management lowered full-year operating profit guidance from ¥54.0bn to ¥51.0bn; bad news has largely run its course but concerns remain over non-dispensing sales and SG&A costs in H2.