Fast Retailing’s Q1 Net Drops While Sales Climb
TOKYO — Fast Retailing reported a decline in net profit of more than 9 percent for the first three months of its fiscal year. The Uniqlo parent blamed the decrease on pandemic-related restrictions in China, as well as a weaker yen.
For the quarter ending Nov. 30, Fast Retailing’s net profit contracted by 9.1 percent year-on-year to 85 billion yen.
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Operating profit for the period also declined, coming in 2 percent lower than the same period in the previous year, at 117 billion yen.
The Japanese retailer’s net sales for the first quarter rose by 14.2 percent to 716.3 billion yen.
Among the group’s individual business segments, Uniqlo International’s revenue gained 19.4 percent on the year, coming in at 357.6 billion yen, while operating profit declined by 4.4 percent to 57.2 billion yen.
“While Uniqlo operations in the Greater China region and Japan each reported a contraction in profit, all other Uniqlo operations generated significant increases in both revenue and profit, demonstrating the group’s continued diversification in its earnings pillars,” Fast Retailing wrote in a release.
Uniqlo’s operations in mainland China particularly suffered due to stringent COVID-19 restrictions. The company said that up to 247 of its stores in the country closed temporarily during the period under review. Consequently, Uniqlo reported significant declines in both sales and operating profit in mainland China.
In Japan, revenue was up by 6.4 percent to 240.9 billion yen, while operating profit fell by 5.6 percent to 39.4 billion yen. Same-store sales increased by 4.7 percent on the year.
GU, which Fast Retailing describes as its “fashion casualwear brand,” posted strong first-quarter growth in both sales and profit. Its revenue jumped by 13.6 percent to 79.3 billion yen. Operating profit increased by 19.3 percent to 10.6 billion yen.
“The strong first-quarter performance was generated by a further tightening of the product range and steps to better capture mass fashion trends,” the retailer said. “With the distribution schedule back to normal, GU also had higher flexibility to place additional orders for popular items.”
Fast Retailing’s global brands segment, which includes Theory, Comptoir des Cotonniers, J Brand and others, saw sales grow 22.4 percent to 37.6 billion yen, while operating profit plummeted 72.1 percent to 0.7 billion yen.
The group left unchanged its guidance for the current fiscal year ending Aug. 31. It expects its net profit to decline by 15.9 percent to 230 billion yen, while operating profit is forecast to rise by 17.7 percent to 350 billion yen. Fast Retailing is predicting yearly sales growth of 15.2 percent to 2.65 trillion yen.
