Uniqlo sales bounce back
In this article (4)
Uniqlo sales have bounced back from decline, giving parent Fast Retailing a much-needed round of good news for May.
Same-store Uniqlo sales in Japan rose 5.9 per cent year-on-year, even though customer traffic fell 3.6 per cent. The average purchase increased by 9.9 per cent to make up for the customer shortfall.
Total sales including online increased by 7.6 per cent.
The figures show only trading in Uniqlo’s Japan division.
Analyst Masafumi Shoda of Nomura Securities said in a research note that Fast Retailing’s sales decline appeared to have bottomed.
“While jogger pants remained strong, trendy merchandise such as women’s t-blouses and embroidered t-shirts also emerged as drivers. Another contributing factor was the successful expansion of the mainstay Airism line to bottoms. Even factoring out the boost from the customer appreciation sale at the end of the month, signs are beginning to emerge that the company is successfully asserting leadership on both price and fashion.”
But Shoda said profitability will be likely to decline both overseas and in Japan in the March to May period, due to retooling, “but we think it will improve in June to August thanks in part to the likelihood of a rebound from prior-year results dampened by unseasonable weather”.
Questions & Answers
Q.What specifically caused the rise in Uniqlo's same-store sales despite fewer customers?
What specifically caused the rise in Uniqlo's same-store sales despite fewer customers?
The average purchase value increased by 9.9 per cent. This higher spend per customer compensated for the 3.6 per cent drop in customer traffic, leading to the overall sales rise.
Q.Which specific product lines were highlighted as drivers for the sales improvement?
Which specific product lines were highlighted as drivers for the sales improvement?
Jogger pants remained strong, while women’s t-blouses and embroidered t-shirts also drove sales. The successful expansion of the Airism line to bottoms was another contributing factor to the improved performance.
Q.Why does an analyst predict Uniqlo's profitability might decline in the short term, despite the sales bounce?
Why does an analyst predict Uniqlo's profitability might decline in the short term, despite the sales bounce?
Analyst Masafumi Shoda predicts a profitability decline for the March to May period due to retooling efforts. He anticipates improvement from June to August, helped by a rebound from previous unseasonable weather.
Reader pulse
Uniqlo's Japan turnaround:
16,522 votes so far