Uniqlo owner Fast Retailing forecasts profit recovery as pandemic abates

Japan’s Fast Retailing expects continued recovery in sales and profits in the year to August 2022 as the pandemic abates, the owner of clothing brand Uniqlo said on Thursday.

The company said it expects operating profit to climb 8.4% to 270 billion yen ($2.4 billion) in fiscal 2021-22.

For the year ended in August, it reported 249 billion yen in operating profit, topping the 245.7 billion forecast in a Refinitiv poll of 13 analysts.

“Vaccinations are being carried out all over the world to control the spread of the disease, and the economy is growing in earnest,” chief executive Tadashi Yanai told reporters.

Fast Retailing expects the pandemic will still drag on results in the first half of the fiscal year but will then recover in the second half as shopping habits return to normal.

The company said it expects some negative effects from production or logistic delays, problems that have plagued major clothiers and their global supply lines in recent months.

In September, Fast Retailing said The company said in late September that its clothing releases will be delayed due to COVID-19 lockdowns at partner factories in Vietnam some clothing releases would be delayed due to pandemic-related lockdowns at partner factories in Vietnam.

That followed crises in Myanmar and China that upset supply lines and created reputational challenges.

Fast Retailing halted operations at some partner facilities in Myanmar as a military coup led to social unrest and lockdowns. In China, the company and other foreign brands faced a customer backlash over criticisms of alleged human rights abuses in Xinjiang province.

Fast Retailing operates about 800 Uniqlo stores on the Chinese mainland, about the same number as in Japan.

Yanai said the company carried out regular inspections of production sites and had built up a team to improve monitoring of how it gets raw materials for its clothes.

“In the future, we will ensure a higher level of traceability of the materials we procure, including the farmers who produce the raw goods,” Yanai said.