TOKYO — Fast Retailing Co. Ltd., Asia’s largest retailer, saw higher full-year profits and revenue but warned that sales growth is slowing for the current fiscal year.
The company, which owns Uniqlo, Theory and Helmut Lang, saw its net profit for the year ended Aug. 31 jump 26.1 percent to 90.38 billion yen, or $1 billion at average exchange rates for the period.
Fast Retailing posted a 5.1 percent increase in operating profit to 132.92 billion yen, or $1.48 billion. That figure missed its previous guidance for 147.5 billion yen, or $1.5 billion, as it engaged in discounting at its core Uniqlo business.
Net sales for the year rose 23.1 percent to 1.14 trillion yen, or $12.65 billion.
In terms of guidance for the current fiscal year ending Aug. 2014, the retailer said it will improve in terms of operating profit growth but see a slower rate of sales growth across all of its business sectors.
For the current fiscal year, Fast Retailing forecast that net profit will advance 1.8 percent to 92 billion yen, or $936.7 million, while operating profit will increase 17.4 percent to 156 billion yen, or $1.59 billion.
The retailer predicted that full-year sales will grow 16.4 percent to 1.33 trillion yen, or $13.54 billion.
Sales from Uniqlo’s stores in Japan still make up the majority of Fast Retailing’s business. Domestic Uniqlo sales for the year ended Aug. 31 rose 10.2 percent to 683.3 billion yen, or $7.58 billion. Customer numbers increased 12 percent.
Profit margins from Uniqlo’s Japan business took a hit as the company discounted prices to boost traffic, but Fast Retailing chairman, president and chief operating officer Tadashi Yanai said at a press briefing that, in the current fiscal year, the company plans to offer more items with higher margins, such as cashmere sweaters. Uniqlo, which in Japan still has a strong image as a discount, roadside retailer, will also continue its marketing efforts to re-brand itself as a more upmarket yet well-priced label.
The company’s overseas Uniqlo sales represent a smaller piece of the pie, but are growing more rapidly. They rose 64 percent to 251.1 billion yen, or $2.8 billion, as the company opened 154 Uniqlo stores outside of Japan during its previous fiscal year.
The remainder of Fast Retailing’s sales come from its global brand business, which includes Theory, Helmut Lang and J Brand, among others. Those sales rose 34.8 percent to 206.2 billion yen, or $2.29 billion.
On Thursday, Yanai again stressed the importance of international markets to the future of his company. During the current fiscal year, he said the firm plans to open an additional 15 Uniqlo stores in the U.S., as well as the first in Germany and three in Australia. Currently, seven of Uniqlo’s top 10 stores in terms of sales are located outside of Japan. Within the next few years, Fast Retailing plans to open as many as 30 stores a year in the U.S., Yanai said.
Asia remains Fast Retailing’s largest international market, and the company recently opened its largest Uniqlo store in Shanghai. The opening also marked the first international door of G.U., Uniqlo’s lower priced sister brand. Yanai said the store has been performing very well so far.