Fast Retailing, the parent company of Uniqlo, has revised its full-year profit forecast upwards for the third consecutive year, projecting operating profits of 475 billion yen ($2.94 billion) for the fiscal year ending in August. This adjustment marks an increase from the previous forecast of 450 billion yen, driven by robust sales performance in both domestic and international markets since the second half of the fiscal year.
According to a statement from the company, Uniqlo Japan and the international business segment, particularly in North America, Europe, and Southeast Asia, have delivered strong results contributing to this upward revision.
Fast Retailing, known for its affordable and quality basics through Uniqlo, has also benefited from a favorable currency environment, with the yen sliding to a 38-year low. This depreciation has bolstered the value of its overseas sales, further enhancing its financial performance.
The company is strategically focusing on aggressive growth in key regions such as Greater China, North America, and Europe. This expansion plan aligns with a broader consumer trend post-pandemic, where value-oriented products are increasingly preferred over luxury items.
Fast Retailing operates more than 900 stores in mainland China, positioning itself as a significant player in one of the world’s largest consumer markets.
In the three-month period ending May 31, Fast Retailing reported a 31% increase in operating profit to 144.7 billion yen compared to the same period last year, surpassing analysts’ consensus forecast of 127.1 billion yen based on a LSEG poll.
However, the company noted challenges in its Greater China operations, citing a decline in revenue and significant profit drop compared to the previous year, partly attributed to tough year-on-year comparisons and a slowdown in consumer demand.
Despite these challenges, Fast Retailing shares have surged approximately 26% year-to-date, closely tracking the performance of the Nikkei benchmark index.
The upward revision in profit forecast underscores Fast Retailing’s resilient business strategy and its ability to capitalize on shifting consumer preferences and favorable market conditions in key regions around the globe.
