Japan's electronics maker Panasonic Corp said on Thursday it expects sales in fiscal year 2018 to miss an earlier-set target by 12 percent due to a weaker global economy. In its medium-term business outlook, Panasonic said it now expects sales of 8.8 trillion yen ($78.3 billion) for the year starting April 2018, scrapping a previous target of 10 trillion yen.
The move shows that even one of the strongest of Japan's consumer electronics companies is struggling to grow as the country's consumer spending weakens, inflation stalls and China's slowdown threatens to undermine the export-reliant economy.
"The 10 trillion yen sales target was meant to give a strong message that we would strive for growth," chief executive Kazuhiro Tsuga told reporters. "But we are now seeing that chasing sales is not necessarily appropriate."
Markets had already expected Panasonic's ambitious target would be difficult to achieve, after the company cut its sales outlook for the year ending on Thursday to 7.55 trillion yen from a previous forecast of 8 trillion yen.
Analysts on average had already estimated fiscal 2018 sales of around 8 trillion yen, according to Thomson Reuters data. The company said that while it would no longer set an official target for topline growth, it would continue targeting an operating profit - of 500 billion yen for fiscal year 2018, up from 410 billion yen estimated for the year ending Thursday.
Panasonic moved faster than Japanese peers such as Sony Corp and Sharp Corp to withdraw from low-margin products like smartphones and plasma television sets and avoid competition from cheaper Asian rivals.
In the past few years, the Osaka-based company has reinvented itself as a maker of industrial products such as high-tech auto parts and high-end appliances such as LED lighting and home monitoring.
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