Hello Kitty stock soars 93% as Tokyo heat sends tourists indoors
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Japan had a record number of overseas tourists in July and their preferences are shifting in accordance with the weather.
PHOTO: AFP
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Heat waves and heavy rain wreck the pleasure of outdoor amusement parks.
That simple fact has hammered the shares of Oriental Land, which operates Tokyo Disney Resort. Sweltering temperatures this summer coupled with increasing bouts of torrential rains have kept visitors away from the parks and as a result the company’s stock has plunged 25 per cent in 2024, the seventh-worst performer on the Nikkei 225.
Japan had a record number of overseas tourists in July, and their preferences are shifting in accordance with the weather. Companies that offer indoor entertainment have seen visitor numbers swell along with profits and their share prices. Sanrio, the owner of the Hello Kitty brand, operates two indoor theme parks and has enjoyed a 93 per cent gain in its stock in 2024. Round One, which operates a chain of air-conditioned arcades with bowling alleys and video games, has seen shares rise 56 per cent.
Like much of the world, Japan has suffered from extreme heat in 2024. Average temperatures in July reached an all-time high for the month, according to meteorological agency data going back to 1898. That may continue in the months ahead, as the weather agency has forecast high temperatures nationwide from September to November.
“When there’s a risk of heatstroke and you have kids, you’re going to stick to staying indoors,” said IwaiCosmo Securities analyst Norikazu Shimizu. “With intense heat, you just avoid going out.”
Oriental Land expects operating income to drop in the fiscal first half ending September. It has cited the ongoing heat and heavy rain as key factors in keeping visitors away. It is not alone. Fuji Kyuko, which runs amusement park Fuji-Q Highland, has seen its shares tumble 38 per cent so far in 2024.
In contrast, Sanrio saw an increase in customers, led by more visitors from South Korea, Taiwan and China. The company’s first-quarter profits and full-year outlook exceeded analyst expectations.
If the heatwave continues, the shift from outdoor entertainment to indoors will become even more pronounced, according to the IwaiCosmo analyst. BLOOMBERG
