Japan’s Fast Retailing Co. Ltd. posted double-digit gains in profit and sales for the first nine months of the year, citing strong momentum in Asian markets.
Asia’s largest clothing retailer and the corporate parent of Uniqlo said Thursday its net profit for the nine months ending May 31 rose 51.5 percent to 132.36 billion yen, or $1.14 billion at average exchange rates for the period.
Sales at the Japanese company increased 23.9 percent to 1.35 trillion yen, or $11.61 billion.
Operating profit for the period advanced 35.5 to 189.27 billion yen, or $1.63 billion, growing at a slightly slower rate than the 40 percent rate seen in the first six months of the year.
The company said all group operations saw increases in sales and profit with Uniqlo International performing particularly strongly. The company also said the depreciation of the yen boosted the bottom line, generating financial income of 21 billion yen, or $180.60 million — that is why net profit grew at a faster pace than operating profit.
Fast Retailing kept its full-year forecasts intact. It expects net profit to grow 61 percent to 120 billion yen, or $966.32 million at current exchange. The company said full-year revenue should grow 19.3 percent to 1.65 trillion yen, or $13.57 billion.
Uniqlo International’s nine-month sales increased 47 percent to 481.8 billion yen, or $4.14 billion, while operating profit grew 55 percent to 51.9 billion yen, or 446.63 million, Fast Retailing said.
In terms of Uniqlo’s international operations, Fast Retailing said that Mainland China, Hong Kong, Taiwan and South Korea reported higher-than-expected increases in revenue and profit. Greater China, Uniqlo’s biggest market outside its native Japan, counted 442 Uniqlo stores as of the end of May.
Fast Retailing said the March closing of the Oxford Street store in London for refurbishment caused Uniqlo Europe’s profits to dip in the third quarter but profits and revenue for the region still posted growth over the nine-month period. The company said operating losses at Uniqlo USA expanded after “persistently sluggish sales led to greater discounting.”
The Japanese company said Uniqlo’s performance in its home market surpassed expectations. Uniqlo Japan nine-month sales grew 12 percent to 638.1 billion yen, or $5.49 billion, and operating profit advanced 21.6 percent to 113.7 billion yen, or $977.82 million. In Japan, Uniqlo is currently rationalizing its store network and closing smaller stores with larger ones. At the end of May, it counted 814 stores in Japan.
As for Fast Retailing’s other brands, it said that fast-fashion brand GU saw double-digit growth in sales and operating profit but Theory fell short of its target and J Brand reported “persistent operating losses, despite a rise in sales.” Comptoir des Cotonniers and Princesse Tam Tam reported flat performances, Fast Retailing said.