Fast Retailing Ups Earnings Forecast

Net profit grew 38.7 percent year-on-year for the six months ended Feb. 29.

TOKYO — Fast Retailing said Thursday that due to strong performance at home and abroad, both its profit and sales for the six months ended Feb. 29 grew, prompting an upward revision of the company’s full-year earnings outlook.

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Net profit for the six-month period grew 38.7 percent year-on-year to 57.8 billion yen, or $747.3 million at average exchange rates for the period.

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Operating income increased 11.8 percent to 91.75 billion yen, or $1.19 billion.

Sales for the half totaled 525.5 billion yen, or $6.79 billion, an increase of 14.9 percent compared with the same period last year.

Uniqlo’s sales in Japan increased 6.6 percent overall to 364.59 billion yen, or $4.71 billion. The company opened 24 Uniqlo stores over the six-month period, bringing it to a total of 828 locations throughout the country.

The retailer continued its international push with 53 store openings overseas throughout the half in cities such as New York, Taipei and Seoul, for a total of 234 Uniqlo stores outside of Japan. Uniqlo’s international sales jumped 68.8 percent to 84.82 billion yen, or $1.1 billion.

On Wednesday, Uniqlo revealed plans to open its first store on the U.S. West Coast on San Francisco’s Powell Street this fall. At a press conference in Tokyo on Thursday, chairman, president and chief executive Tadashi Yanai reiterated his ambitious plans for international expansion.

“We project that Uniqlo’s international sales will overtake Uniqlo Japan’s sales by the fiscal year 2015,” Yanai said.

To that end, the company aims to open between 200 and 300 stores a year outside of Japan in the near future, including 100 stores in Greater China and another 50 to 100 elsewhere in Asia. Ten years from now, the company envisions both of these numbers will be more than 1,000.

The first Uniqlo in the Philippines is set to open in June, and this fall the company also plans to open a store in New Jersey. It also hopes to open 20 to 30 shops in and around New York and an additional 20 to 30 in and around San Francisco and Los Angeles, although the time frame for this expansion has not been set.

“In New York, the places where a great number of people actually live are on the outskirts….So, opening stores in the suburbs is a prerequisite for progress,” Yanai said. “I think San Francisco is a great city. It’s a place with some good culture and it’s close to Silicon Valley, so I think it will definitely be a plus for our digital commerce in the future.”

Yanai said he also has his eye on European cities such as Berlin, Milan and Barcelona.

When asked what he thought of increasing competition in Japan from international retailers such as American Eagle, which is due to open its first store here next week, Yanai said he welcomes the challenge.

“I want them to keep coming. We’ll make a great effort to compete against each other, and that’s how growth starts,” the executive responded. “This is the age of global players — international players from around the world will pop up around the world — so if we can’t win and advance to the next round, I don’t think there will be any hope for us.”

Fast Retailing upped its guidance for the full year ending August 31, due to better-than-expected performance at Uniqlo. It now expects net profit to grow 49.9 percent to 81.5 billion yen, or $1.01 billion at current exchange rates. Operating profit is expected to increase by 18.6 percent to 138 billion yen, or $1.71 billion. The company forecasts full-year sales of 941.5 billion yen, or $11.65 billion, which would represent growth of 14.8 percent. The company increased its forecasts for Uniqlo in Japan but left its international guidance unchanged.