Takashimaya has raised its long-term shareholder-return targets well above the original plan. In a question-and-answer summary of its interim results briefing, held on October 15, the department store operator said it now aims for a dividend payout ratio of at least 50% and a dividend on equity (DOE) ratio of at least 5% for the 2031 fiscal year. The original plan set them at 30% and 2.5%.
These are targets, not payouts. The summary gives no per-share dividend for 2031, and the questioner's reference to an increase this year is not itemised in the document. For earlier results coverage, see Earlier Tokyo Brief coverage.
ROE goal and cash generation
Management also set a return-on-equity target of 10% or more for the 2031 fiscal year. Asked whether this signals a total shareholder-return target that includes buybacks, the company said the ROE goal is a message that it will raise cash generation and allocate it between growth investment and shareholder returns with the numbers in mind.
The company said it had been careful to judge how much cash it can generate sustainably as the current mid-term plan reaches its final year. It had considered presenting the whole capital policy in the new plan starting next year, but an upward revision to its earnings forecast raised its confidence in cash generation, so it disclosed what it could now.
Buybacks left for the next plan
Takashimaya had previously set a total payout ratio of 70% to ease concern about earnings dilution from its convertible bonds. It withdrew that target after buying back and cancelling the bonds. It said it still keeps roughly 70% in mind for the future, and that a concrete policy including share buybacks will come in the next mid-term plan.
Profit target and overseas growth
The company also raised its 2031 target for business profit, defined as operating profit plus equity-method income and dividends received from businesses such as Vietnam. The new range is ¥80bn to ¥85bn, up from ¥75bn to ¥80bn. Management attributed about ¥5bn of the increase to at least ¥3bn in net gains from tighter integration across the group, plus profit growth in overseas businesses centred on finance and Vietnam.
On the next plan, the company said it still sees it as a phase of harvesting past investment. Vietnam has begun contributing profit and the finance business is starting to convert to earnings, though part of the expected Vietnam benefit will arrive gradually through the next plan because of external conditions.
Cost pressure at home
In domestic department stores, the company is absorbing what it now calls procurement costs, a relabelling of what it previously described as high prices. It said these rose, notably for utilities and outsourcing, and lifted full-year selling and administrative costs by ¥700mn from the April plan. Total planned cost savings are ¥4.3bn, against ¥4.5bn in April.