Retail in Asia

Fast Retailing profits dip on China, Japan contraction

Fast Retailing Co. announced total revenues for the first quarter reached JPY 716.3 billion (USD 5.56 billion), up 14.2 percent  year-on-year, while operating profit declined to JPY 117 billion, down 2 percent on the prior-year period.

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The Tokyo-headquartered company said that Uniqlo Japan revenue rose 6.4 percent to JPY 240.9 billion, with an operating profit decline of 5.6 percent to JPY 39.4 billion.

International revenues climbed 19.4 percent to JPY 357.8 billion, an operating profit fell 4.4 percent JPY 57.2 billion, hindered by Mainland China, which reported a large decline in profits due to Covid-19 restriction during the quarter.

Other Uniqlo operations recorded “strong results and significant increases” in both revenue and profit, while Southeast Asia, North America, and Europe reported “record performances,” the company said in a press release.

The company’s GU brand also clocked higher revenue and profit, up 13.6 percent and 19.3 percent, respectively, “and is moving back onto a steady growth track,” the company added.

The company’s global brands division clocked revenue of JPY 37.6 billion, up 22.4 percent, with an operating profit of JPY 0.7 billion, down 72.1 percent. Theory reported a large increase in revenue but a decline in profits, while Comptoir des Cotonniers reported a decline in revenue and a slight expansion in operating losses.

“While first-quarter performance fell short of our consolidated business estimates, we have enjoyed strong sales since December, and so we do expect to be able to achieve both our first-half and full-year business forecasts,” the company added.

Looking ahead, the company expects to achieve consolidated revenue of JPY 2.65 trillion, up 15.2 percent year-on-year, while operating profit is expected to hit JPY 350 billion, up 17.7 percent year-on-year.

“We expect revenue and profit to increase in the first half of fiscal 2023 as initially expected,” said Fast Retailing. “While performance in the Mainland China market remains fluid due to Covid19, we do expect to be able to achieve our business estimates for the second half of fiscal 2023 as well as this stage.”