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Pan Pacific International's Annual Profit Jumps 22% as Donki Traffic, Tax-Free Sales Drive Growth

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Pan Pacific International's Annual Profit Jumps 22% as Donki Traffic, Tax-Free Sales Drive Growth

Pan Pacific International (TYO:7532) posted record annual profit, driven by stronger customer traffic, robust domestic retail sales, and record tax-free sales, while productivity gains offset higher labor and energy costs.

The Japanese retailer posted an 8.8% increase in net sales to 2.45 trillion yen and a 22% rise in profit attributable to owners of the parent to 110.1 billion yen for the year ended June 30, according to its earnings presentation.

Operating income rose 7.7% to 174.8 billion yen.

The discount store business was a key growth driver, with sales rising to 1.55 trillion yen and operating income reaching 110.7 billion yen.

Same-store sales increased by 5%, while customer traffic rose by 1%, as pricing strategies and promotions helped attract shoppers.

Meanwhile, tax-free sales reached a record 228.6 billion yen, up 31%, supported by stronger demand from customers across Asia, Europe, and the U.S.

Sales growth from mainland China visitors slowed, while customer acquisition in other Asian markets, Europe, and the U.S. remained strong.

Private-label and original-equipment-manufacturing sales also continued to expand, rising 19.7% to 379.6 billion yen and contributing to profitability. The company plans to develop a new strategy to accelerate business growth.

For fiscal 2027, PPIH expects net sales to rise 9.9% to 2.69 trillion yen and operating income to increase 2.4% to 179.0 billion yen.

Excluding Olympic Group, sales are forecast to rise 5.6% to 2.58 trillion yen and operating income 5.2% to 184.0 billion yen.

The company expects to allow gross margin to decline temporarily as it prioritizes customer traffic and responds to changing consumer behavior, while investing in new stores, human capital, marketing, and AI.

Olympic Group is expected to post an operating loss of 5 billion yen in fiscal 2027 as PPIH invests in its transformation. The company plans to convert Olympic stores into Don Quijote, MEGA Don Quijote, or Robin Hood formats, targeting sales of 200 billion yen and a 6% operating margin over the longer term.

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Alibaba Group (HKG:9988) has launched a beta version of its new AI music-generation model called HappyShrimp 1.0, according to a press release on Monday.The model, developed by Alibaba's Token Hub business group, converts texts to "a fully produced song" containing melody, arrangement, lyrics, and vocals, the Chinese tech company said."HappyShrimp 1.0 allows users to generate complete tracks from a single prompt, whether based on an emotion, a story concept, or a target genre," Alibaba said, noting that the model can produce tracks across genres like Chinese style, pop, R&B/soul, hip hop, rock, funk, electronic, classical, and jazz.The company did not disclose how it plans to monetize the music model. HappyShrimp 1.0 would likely rival AI music startups like Suno and Udio, as well as Google's MusicFX and Meta's AudioCraft.The launch expands Alibaba's generative AI offerings into the audio sector, further boosting its Cloud business. In the fiscal year ended March 31, Alibaba Cloud's external revenue growth accelerated to 40%, with AI-related products making up 30% of the total.Earlier this month, Alibaba Cloud launched Qwen3.8-Max, which it described as its "largest and most capable flagship model to date." The model features 2.4 trillion parameters and supports a context window of up to 1 million tokens."Alibaba's full-stack AI investments have progressed from incubation to commercialization at scale," Alibaba CEO Eddie Wu said in May.At the time, the company said it expects AI model and application services annualized recurring revenue to top 10 billion yuan in the June quarter and 30 billion yuan by the end of the year.Alibaba expects AI-related product revenue to surpass 50% of Cloud Intelligence Group's total external revenue to become the unit's primary growth driver.In March, Wu said Alibaba aims to surpass $100 billion in combined cloud and AI external revenue over the next five years.

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Update: Equities Fall, Oil Rallies as US-Iran Ceasefire Expires
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Update: Equities Fall, Oil Rallies as US-Iran Ceasefire Expires

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