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Record profit masks Nitori's swelling costs

Renovation and urban expansion behind fiscal 2017 earnings shortfall

Nitori Holdings has been opening more stores in urban areas, where labor costs and rent tend to be higher than in the suburbs.

TOKYO -- Furniture seller Nitori Holdings' net profit grew 7% to an all-time high of 64.2 billion yen ($607 million) last fiscal year, but rising costs have made investor expectations of continued growth tougher to meet.

The Japanese company's sales climbed 12% to 572 billion yen in the year through Feb. 20, beating the forecast by about 4 billion yen, on strong demand for such signature products as comfortable beds and mattresses and the N Warm series of heat-retaining bedding. Same-store sales rose 2.9%.

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