// Fast Retailing cuts its annual profit forecast as Covid-19 restrictions dent footfall
// Strong sales of Uniqlo U summer ranges helped to improved revenue from March to May
Uniqlo owner Fast Retailing has lowered its annual profit forecast as a result of additional Covid-19 related government restrictions in Japan and overseas denting footfall.
Last week, a fortnight before the Olympic Games is set begin, Japan declared a coronavirus state of emergency in Tokyo.
The group anticipates a 64 per cent increase in operational profit for the fiscal year ending in August, to £176 billion, a ten-billion-dollar reduction from the earlier estimate.
However, profits increased to £149 billion in the nine months ending in May, up from £878 billion the previous year.
Uniqlo Japan reported large increases in revenue and profit in the first nine months, with revenue rising 12.7 per cent year-on-year and operating profit rising 51 per cent.
First-half revenue rose and profit “expanded significantly on the back of strong sales of products that fulfilled customer demand for stay-at-home items, as well as core Fall Winter ranges”.
Revenue and profit also “subsequently expanded significantly in the third quarter compared to a low previous-year performance”.
Strong sales of Uniqlo U T-shirts, Kando pants, and other summer ranges, as well as loungewear, super stretch activity pants, and other goods, improved revenue from March to May 2021.
Its ecommerce revenue also increased as its online sales continued to expand, however the Q3 Uniqlo Japan performance still fell short of its business plan.
At Uniqlo International, it saw a rise in revenue and a large increase in profit in the first nine months, with revenue up 9.8 per cent and operating profit increasing 88.7 per cent.
Profit increased significantly in H1 due to improved profitability in its East Asia operations while all regions reported significant recoveries in the third quarter and the Mainland China market reported large rises in both revenue and profit.
South Korea also moved back into the black in terms of operating profit.
North America and Europe reported major revenue gains and smaller operating losses during the period as the Covid situation improved in those regions.
Meanwhile, its GU operation saw revenue climb 7.1 per cent in the nine months and operating profit jump 18.9 per cent.
GU performance “held steady year-on-year” while both revenue and profit “increased considerably in the third quarter”.
From March to May, items such as chef’s pants, airy shirts, and coloured flared trousers contributed to the rise in revenue.
However, more recently the group stated that sales struggled and GU performance fell short of its business estimates due to the announcement of another state of emergency in Japan and the fact that some GU products did not fully grasp the prevailing trend.
And Fast Retailing’s Global Brands revenue declined with operating losses widening in the first nine months.
Revenue fell 3.3 per cent and the segment reported an operating loss of £58 billion compared to a loss of £39 billion a year ago.