Fast Retailing posts 32% profit jump to record ¥743bn, beats forecasts
Fast Retailing, owner of Uniqlo, posted a 32% rise in annual operating profit to ¥743.13bn, beating forecasts, driven by strong global demand. The company forecast higher profit next year but warned a weak yen and higher import costs would weigh on Japan.
Fast Retailing, the Japanese owner of clothing brand Uniqlo, posted its fifth consecutive record annual operating profit on Thursday, driven by strong results across all regions and offsetting the impact of a weak yen at home.
Operating profit rose about 32 per cent to 743.13 billion yen (US$4.70 billion) in the 12 months ended August 31, from 564.3 billion yen a year earlier, the company said. The result beat the company's own forecast of 730 billion yen and the 726.45 billion yen average estimate from 16 analysts polled by LSEG.
For the year ending August 2027, Fast Retailing forecast operating profit of 830 billion yen.
The Uniqlo operator has beaten quarterly expectations throughout the year and repeatedly raised its profit guidance. However, management warned that a weak yen was making conditions more difficult in Japan, where higher import costs were expected to weigh on fourth-quarter results and lead to price increases.
North America and Europe have been highlights for the company's overseas operations in recent periods, providing a counterbalance to sluggish results in mainland China, where consumers remain reluctant to spend. From one store in Hiroshima in 1984, the group has grown to more than 2,500 Uniqlo locations globally, selling inexpensive fleeces and basic goods made primarily in Asian manufacturing hubs.
Founder Tadashi Yanai, Japan's richest man, has long said he wants to make Fast Retailing the world's top clothing retailer, putting the company in competition with Zara owner Inditex and Sweden's H&M.
Fast Retailing is widely seen as a bellwether for consumer sentiment in Japan and China, still its biggest foreign market with nearly 900 Uniqlo shops. Store numbers have levelled off in both markets, reaching saturation levels in Japan while the company is shutting underperforming locations in China and replacing them with newer, larger shops to revive foot traffic.
With online retail eating into the business of standard Uniqlo outlets, Fast Retailing is putting increasing focus on massive, multi-level stores that act as destinations unto themselves. The format has helped grow the brand in North America and Europe, and Fast Retailing is looking to double the number of so-called flagship stores in Japan to 20 in the next decade, Yanai told the Nikkei newspaper in August.