TOKYO — Fast Retailing said Thursday that it posted record-high profit and sales for its most recent fiscal year, bolstered by strong performances by both Uniqlo International and GU. Uniqlo International had a particularly good year, with its revenue reaching 1 trillion yen, or $9.31 billion, for the first time.
For the 12 months ended Aug. 31, the company’s net profit rose 5 percent on the year, totaling 162.5 billion yen. Operating profit grew by 9.1 percent to 257.6 billion yen.
Fast Retailing saw yearly net sales growth of 7.5 percent, for a total of 2.29 trillion yen.
Uniqlo International’s strong growth was driven largely by the brand’s business in Greater China, Southeast Asia and Oceania. Overall, the business segment’s sales rose 14.5 percent year-on-year to 1.026 trillion yen. In Greater China alone, yearly revenue was up by 14.3 percent, totaling 502.5 billion yen. Sales and profit also rose at Uniqlo Europe, and Uniqlo USA was able to “significantly reduce” its operating loss.
“Beginning with the world’s most major cities including New York, Paris, London, Shanghai and Singapore, Uniqlo has opened flagship stores all over the world, especially centering on greater China and other Asian regions,” said Tadashi Yanai, Fast Retailing’s chairman, president and chief executive officer, at an earnings briefing in Tokyo. ”We have achieved an overwhelming brand position. Even in places such as Europe, North America and Australia, we are receiving support from a wide range of customers. There is no other company like this.”
Yanai added that after recent openings in Milan and India, Uniqlo will open two more stores in Delhi this fall, and it hopes to open its first store in Vietnam soon, as well.
Uniqlo Japan’s sales grew, but its operating profit for the year fell. Revenue totaled 872.9 billion yen, an increase of 0.9 percent year-on-year. In the first half of the year, the segment’s same-store sales declined, but they picked up in the second half. E-commerce sales at Uniqlo Japan increased by 32 percent to 83.2 billion yen, with online sales representing a revenue share of 9.5 percent, compared with 7.3 percent in the previous year.
Masanobu Kusaka, one of Fast Retailing’s group senior vice presidents, spoke about the importance of e-commerce in the group’s overall growth strategy. He said that while platforms will remain separated by brand, the company is working on consolidating its global digital commerce, rather than having different portals for different countries and regions.
Kusaka said e-commerce represented 11.6 percent of the group’s total sales in fiscal 2019, but that it is aiming for this figure to grow to 13.7 percent by fiscal 2020. He also said a goal is for online sales to eventually represent an overall revenue share of 30 percent.
GU, the trend-driven, low-priced sister brand to Uniqlo, achieved a record performance, with its sales gaining 12.7 percent over last year, to total 238.7 billion yen. “The label’s trendy oversize garments, including sweatshirts, knitwear and T-shirts, proved standout hit products, recording sales of several million units each,” Fast Retailing said in its release.
While sales in the company’s global brands segment fell, it returned to profit in its most recent fiscal year. Revenue for the segment was down by 2.9 percent year-on-year to 149.9 billion yen, but its operating profit came in at 3.6 billion yen, compared with a 4.1 billion yen loss in the previous year. Within the segment, Theory showed stable growth, leading to a rise in both revenue and profit.
Yanai spoke of the importance of sustainability to Fast Retailing moving forward, saying that the company’s concept of “LifeWear” is not about making clothes as fashion, but about making clothes that help to improve people’s quality of life. He mentioned two projects that Fast Retailing is working on together with Japanese textile giant Toray. One will result in products made using recycled down, due to launch in the fall of 2020. In the other, recycled plastic drink bottles are turned into polyester fibers used in the company’s Dry-Ex line.
Fast Retailing also released its guidance for the current financial year, ending Aug. 31, 2020. The company said it expects all four of its business segments — Uniqlo Japan, Uniqlo International, GU and its global brands segment — to generate gains in both profit and sales.
Overall, yearly net profit is expected to rise by 7.6 percent to 175 billion yen. Fast Retailing is forecasting its full-year operating profit to gain 6.7 percent, coming in at 275 billion yen. The company predicts its revenue will grow by 4.8 percent year-on-year, to total 2.4 trillion yen.