Fast Retailing Reports Record Earnings

TOKYO (Reuters) – Japan's Fast Retailing, the owner of Uniqlo, announced its third consecutive year of record earnings on Thursday, driven by increased profit margins in international markets.

Operating profit surged 31% to 500.9 billion yen ($3.35 billion) for the 12 months ending in August, up from 381.1 billion yen a year earlier, according to the company's statement.

This result surpassed the 478.3 billion yen average forecast from 15 analysts compiled by LSEG and the company's own prediction of 475 billion yen.

Fast Retailing anticipates that operating profit will further rise to 530 billion yen in fiscal 2025.

Uniqlo, recognized for its fleece jackets and affordable undergarments, has benefited from a historically weak yen, influencing both domestic and international sales. A boom in tourism in Japan has resulted in increased duty-free shopping, while revenue from expansion into Western markets gains traction when converted back into yen.

Conversely, earnings in China, Fast Retailing's largest overseas market, have been less favorable. With over 900 stores in the region, the company has been viewed as a barometer for the retail sector in the world's second-largest economy. Pandemic restrictions previously impacted results, but now the brand faces challenges from a sluggish Chinese economy that has dampened consumer confidence.

Founder Tadashi Yanai has long sought to establish Fast Retailing as the world's leading fashion retailer, competing against Inditex, owner of Zara, and H&M. He mentioned that in the post-pandemic era, consumers are prioritizing value over luxury, a trend that could benefit Uniqlo.

Yanai, Japan's wealthiest individual, is set to address the company’s earnings briefing alongside Daisuke Tsukagoshi, Uniqlo's president, whom Yanai has hinted may be a potential successor.

(Note: $1 = 149.2500 yen)