Japanese retail conglomerate Fast Retailing, the parent company of popular brands Uniqlo, GU, and Theory, has announced a robust first-half performance, prompting an upward revision of its full-year profit forecast. If current trends continue, the company is on track for its third consecutive year of record profits, primarily driven by strong sales from its flagship Uniqlo brand both domestically and internationally.
For the six months ending in February, Fast Retailing reported a 12 per cent increase in consolidated revenue, reaching US $ 12.5 billion. Operating profit saw a significant surge of 18.3 per cent to US $ 2.13 billion, while net profit jumped to US $ 1.63 billion from the previous year’s US $ 1.37 billion.
Based on this strong performance, the company has raised its full-year consolidated operating profit forecast by 8.8 per cent to US $ 3.81 billion, with consolidated revenue now expected to rise by 9.5 per cent to US $ 23.8 billion. Fast Retailing highlighted strong first-half sales in Japan, North America, Europe, and Southeast Asia.
The Uniqlo brand remains the company’s largest and most successful. In Japan, Uniqlo’s revenue increased by 11.6 per cent to US $ 3.79 billion, and operating profit soared by 26.4 per cent to US $ 683 million. Comparable sales, including online, rose by 9.8 per cent, attributed to strategic product development and marketing tailored to weather conditions, resulting in strong sales of year-round items and thermal wear. Increased sales to international visitors also played a crucial role, alongside an improved gross profit margin due to stricter discounting.
Uniqlo International also reported substantial growth, with revenue climbing 14.7 per cent to US $ 7.10 billion and operating profit expanding by 11.7 per cent to US $ 1.18 billion. Operations in Southeast Asia, India & Australia, North America, and Europe showed particularly strong revenue and profit gains.
However, the Greater China market presented challenges, with mainland China experiencing a revenue decline of approximately 4 per cent and an operating profit contraction of roughly 11 per cent, primarily due to subdued consumer demand and an “inappropriate product mix” failing to meet regional temperature variations. Elsewhere in Greater China, Hong Kong saw a decline in both revenue and profit, while Taiwan reported increased revenue and profit.
The GU brand experienced a 3.9 per cent increase in revenue to US $ 1.16 billion in the first half, but its operating profit declined by 9.3 per cent to US $ 97.2 million. While certain items like Barrel Leg Pants and outerwear performed well, same-store sales saw only marginal growth due to a lack of “hit products” appealing across seasons and shortages of popular items. The profit drop was attributed to higher store rents from the new US flagship store, increased head office costs, and higher advertising and promotion expenses related to increased TV advertising in Japan.
Fast Retailing’s Global Brands segment, which includes Theory, PLST, and Comptoir des Cotonniers, continued to be the weakest performer, reporting a 2.3 per cent revenue decline to US $ 474 million. However, the segment achieved an operating profit of US $ 6.3 million, a significant improvement from theUS $ 11.9 million loss in the first half of fiscal 2024.
Despite a revenue decline due to weak sales in Theory Asia and insufficient casualwear offerings, the Theory brand saw an increase in operating profit driven by an improved gross profit margin and better control of selling, general, and administrative expenses. PLST reported increased revenue and moved into profitability in the first half, attributed to strategic stock management of popular items and improvements in store operations and displays. Comptoir des Cotonniers saw a revenue decline due to store closures but experienced a significant increase in same-store sales of more affordable items, leading to a reduction in overall losses.
