By  on July 10, 2014

TOKYO — Fast Retailing Co. Ltd. reported higher operating profit and sales for the first nine months of the year but cut its full-year net profit forecast to account for a possible impairment loss at money-losing denim label J Brand.

Citing difficulties competing in the increasingly tough premium denim market, the Japanese company left its current full-year operating profit and sales forecasts in tact but cut its full-year net profit target. It now expects net profit to fall 13.7 percent to 78 billion yen, or $767.44 million at current rates. Previously the retailer was forecasting a net profit of 88 billion yen, or $865.83 million.

This is Fast Retailng's second profit warning so far this year. In April, when releasing first-half numbers, it lowered its full-year earnings forecasts, citing foreign exchange factors and arise in operating costs in its home market of Japan.

The company, which owns the Uniqlo, Theory, GU and Princesse Tam Tam brands, said its net profit for the nine months ended May 31 fell 4.1 percent to 84.84 billion yen, or  $831.43 million at average exchange rates. Fast Retailing said it registered a contraction in foreign exchange profits of 12.5 billion yen, or $122.50 million, which bit into its bottom line.

 

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