TOKYO — Fast Retailing on Thursday reported a rise in both profit and sales in its fiscal first half. Due to the strong results, the Japanese retailer also revised upward its full-year estimates.
For the six months ended Feb. 28, Fast Retailing’s net profit rose 7.1 percent to 104.15 billion yen ($973.9 million), despite a 9.9 billion yen impairment loss and a foreign exchange loss of 6.9 billion yen.
Operating profit for the period grew by 30.5 percent to 170.49 billion yen.
The company posted first-half revenue of 1.19 trillion yen, growth of 16.6 percent compared to the same period a year earlier.
Among Fast Retailing’s four business segments, Uniqlo Japan, Uniqlo International and GU all reported gains in both revenue and profit, while the global brands business posted higher sales but an overall operating loss.
Sales from Uniqlo Japan grew by 8.5 percent on the year to 493.6 billion yen. The company said that unusually cold weather boosted sales of warm clothing throughout the winter. Results were also helped by a comprehensive sales plan that “closely correlates production, distribution and retail, hence ensuring ample inventory of popular items and facilitating timely markdowns on less popular items,” according to the statement. Online sales from Uniqlo Japan expanded 31.6 percent year-over-year, for a 7.5 percent share of total revenue.
All regions represented by Uniqlo International posted higher-than-forecast results, leading to total sales growth of 29.2 percent for the segment. First-half revenue was 507.4 billion yen.
GU, a lower-priced sister brand to Uniqlo which, until the current fiscal year was reported as a part of the global brands segment, saw sales growth of 8.3 percent to 105.8 billion yen.
The global brands business, which includes such labels as Theory, J Brand and Comptoir des Cotonniers, reported first-half revenue of 78.4 billion yen, representing growth of 11.4 percent.
Due to the strong results in the first half, Fast Retailing raised its full-year guidance for the 12 months ending Aug. 31. It now expects net profit to gain 9 percent on the year to 130 billion yen. The previous forecast was for 120 billion yen.
The company is now predicting operating profit will grow by 27.5 percent to 225 billion yen.
It forecasts yearly sales growth of 13.3 percent to 2.11 trillion yen.
At a press briefing Thursday, Fast Retailing’s chairman, president and chief executive officer Tadashi Yanai spoke about Fast Retailing and Uniqlo’s efforts towards greater digitization.
“The [purpose of the] Ariake project is not limited to the propulsion of e-commerce or the propulsion of internet sales, but is about changing the entire company,” the executive said, referring to Uniqlo’s new headquarters and logistics center in Tokyo, which opened last year. He added that as these changes occur, e-commerce sales will increase naturally.
While the 69-year-old Yanai has in the past put off his planned retirement due to the lack of a suitable successor, he currently says he plans to step down from his position at age 70. But it’s not because he doesn’t love what he does and the challenges it brings.
“Even though I’m getting up in years, I’m the most excited I’ve ever been in my life,” he said in reference to the future of the retailing industry and his goal to make Fast Retailing the world’s number one apparel retailer. “Asia’s time has finally come.”
Yanai has not set a deadline for when he wants to achieve his goal, but the company calls it its “medium-term vision.”
“Personally, I don’t think business itself is a simple thing,” Yanai said. “My attitude is that I enjoy making changes to new things and I believe that by changing ourselves we can change the world.”