Fast Retailing, the parent company of renowned fashion brands Uniqlo, Theory, and GU, has announced impressive financial results for its latest fiscal year, despite facing certain obstacles. The company’s operating profit for the 12-month period ending in August rose to ¥297.3 billion, surpassing both its own guidance and analysts’ expectations. This marks a significant increase from the previous year’s operating profit of ¥249 billion and even surpasses the record figure of ¥263 billion achieved in the pre-pandemic year of 2019.

Notably, Fast Retailing expects its profits to continue growing, with a projected operating profit of ¥350 billion for the current fiscal year. The company’s net profit for the latest year also saw a substantial increase of 61%, reaching ¥273 billion. Additionally, annual sales rose by 7.9% to ¥2.3 trillion, and Fast Retailing anticipates a further increase of over 15% in revenues for the current year.

Taking a closer look at Fast Retailing’s business units, Uniqlo Japan experienced a decline in revenue but managed to increase its profit. Despite a 2.8% decrease in revenue to ¥810.2 billion, the operating profit rose 0.6% to ¥124 billion. Same-store sales for Uniqlo Japan, including e-commerce, fell by 3.3% year-on-year but showed improvement in the second half compared to a weak first half.

On the international front, Uniqlo International reported considerable growth in both revenue and profit. Revenue increased by 20.3% to ¥1.1 trillion, while operating profit saw a substantial rise of 42.4% to ¥158.3 billion. This growth was partly attributed to the progressive weakening of the yen, but the segment also experienced stronger revenue and higher profits in local currency terms.

Fast Retailing’s Greater China region saw a 1.2% increase in revenue at ¥538.5 billion, although operating profit declined by 16.8% to ¥83.4 billion. However, sales recovered in the fourth quarter once pandemic-related restrictions on movement were eased, resulting in higher revenue and a significant increase in profit.

Meanwhile, Uniqlo S/SE Asia & Oceania achieved remarkable growth in both revenue and profit. Revenue rose by approximately 60% to around ¥240 billion, leading to a sharp improvement in the operating profit margin to approximately 19% and more than tripling of operating income.

Fast Retailing also made significant strides in North America and Europe (excluding Russia). In North America, the region experienced a substantial increase in revenue and achieved profitability, with an operating profit margin just below 10%. Europe saw significant revenue growth and moved into profits, with an operating profit margin of approximately 12%. Uniqlo’s LifeWear concept and the opening of flagship stores in major cities played a pivotal role in driving strong sales and garnering increased customer support in these regions.

However, the company’s GU segment faced a decline in revenue and a significant dip in profits. Revenue decreased by 1.4% to ¥246 billion, while operating profit fell by 17.4% to ¥16.6 billion. The first half of the fiscal year posed challenges due to product shortages caused by delays in production and distribution. Nevertheless, the segment managed to improve its revenue in the latter half by offering a focused range of product types, implementing robust marketing strategies, and capturing mass fashion trends.

Fast Retailing’s Global Brands segment reported a 13.8% increase in revenue to ¥123.1 billion. However, it incurred an operating loss of ¥0.7 billion, which was an improvement compared to the previous fiscal year’s loss of ¥1.6 billion. The company’s Theory brand witnessed an increase in revenue and profit, thanks to a recovery in performance in the United States and Japan. Theory successfully expanded its customer base by offering comfortable and high-quality lightweight clothing, strategically expanding its product lines with revised price points.

Overall, Fast Retailing’s latest financial results underscore its resilience and ability to overcome challenges. The company’s strong performance in various regions, particularly in Uniqlo’s international markets, reflects its successful strategies and the unwavering popularity of its brands. With a positive outlook for the current fiscal year, Fast Retailing expects to sustain its growth trajectory and further solidify its position in the global fashion industry.

Links:
1. Fast Retailing Investor Relations
2. Uniqlo – Fast Retailing