TOKYO — Fast Retailing Co. Ltd., Asia’s largest apparel retailer, has raised its full-year net profit forecast by 20 percent, citing strong sales at Uniqlo stores in Japan, continued growth overseas and a weak yen.
Fast Retailing said Thursday that it expects net profit of 120 billion yen, or $999.95 million, for the fiscal year through August, versus a prior estimate of 100 billion yen, or $833.29 million. If it reaches this figure, it will represent net profit growth of 61 percent over the previous year.
Tadashi Yanai, Fast Retailing’s chairman, president and chief executive officer, said the company is lifting its targets on the back of fast growth in Uniqlo’s international markets, especially Greater China and South Korea, and strong sales of core products at Uniqlo outlets in Japan.
Fast Retailing is expecting operating profit of 200 billion yen, or $1.67 billion, up from its previous estimate of 180 billion yen, or $1.5 billion, and an increase of 53.4 percent over last year. Reuters’ average forecast of 22 analysts was for profits of 197.25 billion yen, or $1.64 billion.
The company also raised its net sales forecast, from 1.6 trillion yen, or $13.33 billion, to 1.65 trillion yen, or $13.75 billion. This new estimate would represent year-on-year growth of 19.3 percent.
In its September-February fiscal first half, Fast Retailing’s net profit grew 56.2 percent to 104.75 billion yen, or $911.33 million at average exchange rates for the period. The company said currency translation adjustments on the back of a weak yen helped propel earnings growth. Those adjustments resulted in net financial income of 13.5 billion yen, or $117.45 million, the company said.
First-half operating income rose 40.2 percent to 150.08 billion yen, or $1.31 billion. First-half net sales grew 24.2 percent to 949.68 billion yen, or $8.26 billion.
Uniqlo saw an 8.4 percent rise in same-store sales at its Japanese outlets during the half.
The fast-fashion retailer’s international business also continued its robust growth, generating revenue of 345.5 billion yen, or $3.01 billion, up 48.9 percent year-on-year. Business was especially strong in China, Hong Kong, Taiwan and South Korea.
Yanai has said he aims to grow the company to become the world’s number-one apparel manufacturer and retailer. He is expecting to reach sales of 2.5 trillion yen, or $20.83 billion, three years from now, and sales of 5 trillion yen, or $41.66 billion, within about five years.
International expansion is a key component of the growth strategy. He said Thursday that the number of Uniqlo stores outside Japan will surpass the number of stores in Japan by the fall. As of March 31, the company had 840 stores in Japan.
In North America, Uniqlo has plans to enter new areas, including Chicago this fall, followed by Denver and Seattle. The first Uniqlo store in Washington, D.C., is expected in spring 2016, and an entry into the Canadian market is slotted for fall of the same year. Yanai has said there is a possibility that the company will set up a new production center closer to North America. Currently, Fast Retailing conducts the bulk of its manufacturing in Asia.