Japan's Aeon Q1 profit jumps 11.4 pct from restructuring boost

Aeon Co Ltd, Japan's largest retailer by sales, on Wednesday reported a 11.4 percent rise in first-quarter profit, beating estimates, boosted by improved performance at its struggling general merchandising stores.

Operating profit reached 36.6 billion yen ($323.18 million)for the three months through May. That compared with a 35.2 billion yen average of three analysts polled by a Thomson Reuters.

The supermarket operator reiterated its operating profit forecast for the year ending Feb. 28 at 195 billion yen, versus the 198.9 billion yen average of nine analyst estimates.

With its general merchandising stores struggling, Aeon is trying to boost sales of its higher-margin own-brand food, clothing and furniture lines. The company has been restructuring its Daiei and Aeon Retail subsidiaries as it works towards its 290 billion yen operating profit target for the fiscal year ending February 2020.

Competition is rising from Japan's ubiquitous convenience stores, which have cut prices on a range of everyday items to tempt shoppers away from supermarkets.

The earnings performance of major Japanese retailers such as Aeon are closely watched for signs of change in consumer spending.

Core consumer prices in Tokyo, a leading indicator of nationwide price trends, remained unchanged in June on a year earlier.