We are cutting the earnings assumption in our base-case scenario for AEON because its retail business, including general merchandising stores and supermarkets, continues to perform poorly amid a persistently harsh business environment. AEON's business performance is likely to recover gradually over the next one to two years as the group continues to restructure its businesses. However, we expect the pace of recovery to be sluggish and believe profitability has come under increasing pressure. We are affirming all of our ratings on AEON. The negative outlook reflects our view that the company's financial risk profile remains at the weaker end of tolerances for the long-term corporate credit rating and will recover only slowly. We will consider lowering the rating if the
