PPIH Likely to Beat Profit Guidance on Solid Same-Store Growth and Margins; Shares Overvalued

Flexibility is the essence of Pan Pacific’s business model and is an underlying strength supporting its price leadership. As an early entrant to the fringe off-price retail market, PPIH has built its success on Japan’s deflationary economy. Deep discounts offered by a broad array of off-price items lure consumers who trade down on commoditized products and seek bargains. A unique store concept with a mazelike layout and densely stocked shelves enhances the treasure-hunt shopping experience and draws many foreign tourists, whose spending makes up around 7% of the group’s sales.