TOKYO — Fast Retailing said Thursday that its sales and profit for its fiscal first quarter both declined compared to the same period a year prior. The company attributed the drops to disappointing performance by its core Uniqlo brand in South Korea and Hong Kong, as well as to the impact of unseasonably warm weather.
The Japanese retailer said its net profit for the three months ended Nov. 30 fell by 8.2 percent on the year, for a total of 102 billion yen, or $938.3 billion.
The company’s operating profit dropped 12.4 percent to 91.6 billion yen.
Fast Retailing’s first-quarter sales totaled 623.4 billion yen, represented a year-on-year decline of 3.3 percent.
Overall, Uniqlo’s international business recorded a decline in revenue of 3.6 percent to 280.7 billion yen. This was partly due to political tensions and protests in certain Asian regions. In South Korea, a move to boycott Japanese products that began in July last year led to a sharp decline of same-store sales. And in Hong Kong, where protest have been ongoing for months, Uniqlo recorded same-store sales that were lower than the company’s expectations, while also logging an operating loss.
Uniqlo Greater China saw a rise in first-quarter revenue. Profit for the period rose in local currency terms, but fell when converted to yen. Mainland China performed strongly, and online sales continued to expand by about 30 percent year-on-year.
In both North America and Europe, Uniqlo reported a rise in sales, with growth reaching double digits in Europe. Uniqlo Japan saw its revenue decline by 5.3 percent to 233 billion yen.
The expansion of Uniqlo’s lower-priced, on-trend sister brand GU continued to pay off, with both its revenue and operating profit growing sharply in the first quarter. The brand’s sales were up by 11.4 percent on the year, coming in at 36.1 billion yen.
Based on its lower-than-expected results for the first quarter, Fast Retailing revised its guidance for the year ending Aug. 31. It now expects its net profit to increase by 1.5 percent to 165 billion yen, down from a previous forecast of 175 billion yen.
The company is now predicting full-year operating profit will contract by 4.9 percent to 245 billion yen, compared to an earlier forecast of 275 billion yen.
Fast Retailing is now forecasting yearly sales growth of 2.2 percent, totaling 2.34 trillion yen for the 12 months. Its previous forecast was 60 billion yen higher.