Fast Retailing cuts earnings forecast on Hong Kong
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Fast Retailing, the parent of the Japanese fast-fashion retailer Uniqlo, has reduced forecasts for its full-year operating profit by 11 percent.
The Japanese company says its business has been adversely affected by protests in Hong Kong and a trade war between Japan and South Korea that resulted in a boycott of Japanese products in a territory that contains the most Uniqlo outlets in a single territory after China.
“Korea is a very important segment for us, and it’s not clear how long this situation will continue,” said Fast Retailing CFO Takeshi Okazaki.
Fast Retailing has reported consistently increasing earnings since 2016 – until now. In the current financial year’s first quarter, sales dropped by 3.6 percent, while its international operating profit fell 28 percent.
Questions & Answers
Q.What factors led Fast Retailing to cut its earnings forecast?
What factors led Fast Retailing to cut its earnings forecast?
The company reduced its forecast due to the impact of protests in Hong Kong. It also cited a trade war between Japan and South Korea, which resulted in a boycott of Japanese products and affected a significant market.
Q.How has the current financial year started for Fast Retailing?
How has the current financial year started for Fast Retailing?
Sales dropped by 3.6 percent in the first quarter of the current financial year. The international operating profit saw a more significant fall, decreasing by 28 percent during the same period.
Q.What is the significance of the South Korean market to Uniqlo?
What is the significance of the South Korean market to Uniqlo?
South Korea holds the most Uniqlo outlets in a single territory after China, making it a very important segment for the company. The CFO noted uncertainty regarding the ongoing trade dispute's duration.
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