Uniqlo‘s owner Fast Retailing expects to break records this year, with profits up by almost half. The Japanese fashion company has had a strong third quarter and now wants to conquer the American market.
Fast Retailing has more than doubled its net profit to 90.9 billion yen (650 million euros), helped in the comparison by the historically weak yen. Still, at both current and constant exchange rates, the operating results achieve records. Operating profit ended at 81.8 billion yen, 36.5 % higher than last year.
Sales rose 10.3 % to 546.1 billion yen (3.9 billion euro), driven by robust sales in the home market of Japan and the Asia-Pacific region. The fashion group also returned to growth in North America and Europe, even though it had to halt operations in Russia due to war sanctions.
China remains a source of concern due to ongoing Covid-19 restrictions. The country accounts for almost a quarter of Uniqlo’s sales, but both sales and profits fell significantly last quarter. Fortunately, sales picked up in June and July in areas where the restrictions have been lifted, surpassing those of last year, CFO Takeshi Okazaki told Bloomberg.
Focus on America
After the strong quarter, Fast Retailing is raising its targets for the full fiscal year, which ends in August. The company is now aiming for a net profit of 250 billion yen (1.8 billion euro), compared to a previous forecast of 190 billion yen. That would be 47.2 % more than last fiscal year and would break the record set in 2019. The Japanese company is now also forecasting annual sales of 2.25 trillion yen (16.2 billion euros), which would represent an increase of 5.5 %.
Partly due to the uncertainty in China and Russia, Uniqlo is also focusing on the North American market. So far, the fashion group has only 57 shops there, but this number is expected to rise to 200 within five years.