Fast Retailing Group’s profit soars despite efforts

Fast Retailing Group’s profit soared 30.5 per cent in the six months to the end of February – on sales up a healthy 16.6 per cent.

The Japanese fast-fashion company, which owns Uniqlo and GU, among other brands, said consolidated revenue totalled ¥1.1867 trillion (US$11.05 billion) while operating profit reached ¥170.4 billion (US$1.587 billion).

Uniqlo’s international business drove the growth, with both Uniqlo Japan and the fast-growing GU brand performing strongly as well.

As it pursues its medium-term vision to become the world’s largest apparel retailer, the company is focusing on Uniqlo and GU. It sees opening global flagships and large-format stores in major cities around the world as a key strategy “to help consolidate Uniqlo’s position as a key global brand”.

“Within the Uniqlo International segment, Greater China (Mainland China, Hong Kong and Taiwan), Southeast Asia and South Korea are entering a new stage of growth as the key drivers of operational growth for the Fast Retailing Group,” the company said in an earnings statement.

Operating losses at Uniqlo USA contracted, putting that business on track to turn a profit going forward.

“In terms of the GU operation, we plan to open more GU stores in Japan, while expanding the brand’s international presence, especially in Greater China.”

Uniqlo’s domestic Japanese operation also achieved an increase in sales and profit in the first half year. Revenue totalled ¥493.6 billion (up 8.5 per cent) and operating profit ¥88.7 billion (up 29 per cent). In the six months to February 28, same-store sales, including online sales, expanded by 8.4 per cent year-on-year. Online sales increased 31.6 per cent to constitute 7.5 per cent of total revenue.

Uniqlo International’s profitability improved in Greater China and South Korea on higher sales, driven by strong sales of winter ranges such as HeatTech and down. Uniqlo Southeast Asia and Oceania continued to generate a strong performance, with solid demand for summer clothing and firm demand from travellers for winter clothing resulting in significantly higher first-half revenue and profit.