Japanese retailer Muji is expected to end its latest quarter with a 10 per cent year-on-year rise in group operating profit to about 10.5 billion yen (US$95.5 million), a record for the period.

Sales for the parent company, Ryohin Keikaku, will probably have similar growth to reach about 85 billion yen.
During the three months, the company opened 13 stores in Japan. Sales at directly run stores rose 8.1 per cent in March and 7.3 per cent in April. The demand for Muji brand processed foods, such as pasta sauces and freeze-dried rice, has been growing since they were featured on TV. Stronger sales of storage furniture, around 30,000 yen, will probably help lift per-customer sales on average between 2000 and 3000 yen.

Ryohin Keikaku has also performed solidly abroad, where it generates slightly more than 30 per cent of its sales. In China, which accounts for nearly half of the company’s overseas sales, same-store sales appear on track to beat the year-earlier amount by roughly 5 per cent, thanks to the popularity of lotions and other daily household items.

Processed foods remain popular at Muji Chinese stores. By bolstering local production, the company was able to expand its food line-up in China, fueling sales growth.

However, the yen’s appreciation will probably hurt Ryohin Keikaku’s overseas earnings.

For the full year through to next February, Ryohin Keikaku projects a 9 per cent rise in sales to 336.5 billion yen and a 10 per cent increase in operating profit to 38 billion yen. Both would be record-breaking levels.