TOKYO — Fast Retailing Co. Ltd.’s shares fell more than 10 percent on Monday as investors digested disappointing March comps at Uniqlo.
Blaming cold weather for low shopper turnout, Fast Retailing said Friday Uniqlo’s same-store sales slid 16.4 percent last month. Those figures refer exclusively to Uniqlo’s business in Japan.
On Monday, Fast Retailing’s shares lost 10.6 percent, or 1,770 yen, to close at 14,920 yen, or $157.62 at current exchange, on the Tokyo Stock Exchange. The overall Nikkei index rose 0.47 percent. (For more on global stocks, see page 14.)
Yukimi Oda, a Tokyo-based analyst at Morgan Stanley, said Monday he cut his earnings forecasts for Fast Retailing but still expects the company to beat its own guidance.
Morgan Stanley estimates that Fast Retailing’s first-half operating profit will come in at about 93 billion yen, or $982.5 million, beating the retailer’s target of 89 billion yen, or $940.2 million. Fast Retailing’s second-quarter numbers are due Thursday.
Morgan Stanley cut its full-year operating profit forecast for the Japanese retailer by about 4 percent to 136.9 billion yen, or $1.45 billion. The bank said it expects same-store sales in the second half of the year to grow only 0.3 percent compared with an earlier forecast of 8.8 percent.
As for Uniqlo’s drop in March sales, Oda attributed the decline to colder than normal temperatures and said “the industry as a whole is experiencing fairly lackluster demand for spring items.” He went on to state that Uniqlo’s spring merchandising mix, including jeans and innerwear, featured less-expensive items than a year earlier.
A spokeswoman for Fast Retailing declined comment on Monday’s stock market performance but said the company will likely address the drop in sales during Thursday’s press conference on earnings.
Meanwhile, Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo, said he doesn’t think the drop in same-store sales for March is indicative of a long-term slowdown for Fast Retailing.
“February and March are not important months for the company,” he said. “We might see a difficult comparison in the short term, as last year’s sales were going up very rapidly.”
Ogawa also blamed the sudden drop in sales on unseasonably cold weather in Japan. But he predicted “there will be some pickup” as temperatures rise.
Goldman Sachs analysts Sho Kawano and Keiti Wei said Monday they cut their operating profit estimates for Fast Retailing’s fiscal year ending Aug. 31 by 5 percent and that of the year ending Aug. 31, 2011, by 4 percent.
“It looks as though our concerns of a domestic sales slowdown are being realized, with a lack of customer pullers on the scale of [fall-winter’s] HeatTech this spring and summer,” the analysts wrote. “[There’s a] growing consumer awareness of competitors’ low-price innerwear.”
They went on to state they will be looking for news about a possible acceleration of Uniqlo store openings outside Japan. Uniqlo’s international presence includes stores in New York, Paris, London, Singapore and China. The company last Friday opened its first Russian store in Moscow.
“Uniqlo International has major profit potential and we are monitoring scale and attainment. We think openings are on schedule, with an urban focus,” they said.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)