TOKYO — Fast Retailing Co. Ltd.’s first-half net profit rose 24 percent to 35.55 billion yen, or $370.4 million at average exchange for the period, showing the company’s continued resilience to a weak retail climate in Japan and abroad.
The strength of its core Uniqlo brand propelled a 13 percent jump in sales to 357.42 billion yen, or $3.72 billion, for the six-month period ended Feb. 28.
“Even in the midst of difficult economic circumstances and sluggish retail performance worldwide, Uniqlo was able to achieve a surge in sales,” Tadashi Yanai, president, chairman and chief executive officer of Fast Retailing, said Thursday during a news conference at Tokyo’s stock exchange.
The company’s first-half operating income rose 28.7 percent to 69.86 billion yen, or $727.94 million.
Encouraged by retail trends so far, Fast Retailing raised its guidance for the full year ending Aug. 31. The company kept its original net profit forecast of 50 billion yen, or $499.71 million. But it now expects operating profit to come in at 101 billion yen, or $1.01 billion, up from an original forecast of 99 billion yen, or $989.43 million. Sales are now seen coming in at 660 billion yen, or $6.6 billion, compared with an earlier estimate of 627 billion yen, or $6.27 billion.
A strong yen contributed to a smaller-than-expected rise in international sales, but continued expansion outside Japan boosted global sales by 17.9 percent to 18.67 billion yen, or $194.54 million. Uniqlo opened its first store in Singapore on Thursday, and this fall plans to open a global flagship in Paris’ L’Opera district.
The devaluation of the British pound and the Korean won prompted Fast Retailing to trim Uniqlo’s full-year international sales forecast by four billion yen, or $41.68 million, to 37 billion yen, or $385.54 million.
However, the company said it is expecting better profitability at the international division because of strong results in Hong Kong, China and South Korea. Full-year international operating income is now seen coming in at 1.5 billion yen, or $14.99 million.
As for Uniqlo’s business in Japan, full-year net sales are now expected to increase 12.7 percent to 521 billion yen, or $5.43 billion. That is 19 billion yen, or $197.98 million, higher than January forecasts.
Yanai attributed his company’s success to its emergence as a global brand, and said his goal is to create a worldwide retailing force with name recognition rivaling that of Coca-Cola or Sony.
The brand’s top-selling products include staples like jeans and underwear, but plans are in place to expand this lineup to include more fashion-forward styles, thereby increasing sales of women’s products by two to three times the current figures. Last month, Uniqlo tapped German designer Jil Sander to oversee the brand’s men’s and women’s collections.
Yanai said he aims to create an “affordable luxury” group with shops on the high streets of Tokyo, New York, Paris, Shanghai and other world cities. He cited the importance of the Theory and Princess Tam Tam brands to this initiative.
Yanai also hopes to open more concept shops in top department stores around the world, similar to the men’s shop in London’s Selfridges that opened in February.