Muji parent company hits record high on overseas expansion plans

Ryohin Keikaku shares hit a record high after the Muji operator posted better-than-expected annual results and outlined an ambitious international expansion plan.

The stock climbed as much as 10.7%, the biggest gain in more than a year, in Tokyo trading Thursday. Ryohin Keikaku expects operating income to grow around 10% to ¥114 billion for the fiscal year through August 2027, exceeding the average analyst estimate.

The earnings results point to broad-based growth across Muji’s global footprint, with full-year revenue exceeding expectations in each of its four geographic segments. Profitability improved in Japan as in-house production lowered costs, markdowns were restrained and store operations became more efficient, while mainland China recorded sales growth across every product category.

Muji is shifting its focus toward growth investment after building a stable profit base, and will be expanding in Europe, the Americas, India and the Middle East, Ryohin Keikaku President Satoshi Shimizu told reporters in Tokyo on Wednesday.

“We had been pacing our store openings, but now we are going to press hard on the accelerator to expand our footprint across the entire United States,” Shimizu said.

Prioritizing overseas growth with more store openings, workforce investment and spending is a positive sign for a company that had previously focused heavily on operating profit margins, SMBC Nikko Securities analyst Kuni Kanamori wrote in a note to clients.

Sales grew in Taiwan, Hong Kong and South Korea, while new stores and wider product ranges supported Southeast Asia and Oceania. Same-store and online sales also increased in Europe and North America.