Fast Retailing, the parent company of popular apparel brands Uniqlo and GU, has experienced a mixed performance in the third quarter of this year. While Uniqlo Japan reported impressive increases in revenue and profit, driven by the strong demand for stay-at-home items and their core Fall Winter ranges, the overall performance fell short of the business plan. On the other hand, Uniqlo International saw a rise in revenue and a significant increase in profit, with all regions reporting recoveries. Notably, the Mainland China market showed substantial growth in both revenue and profit. Meanwhile, GU’s performance remained steady year-on-year, although recent sales were impacted by the announcement of another state of emergency in Japan and a lack of alignment with current trends.

Fast Retailing’s Global Brands segment experienced a decline in revenue and widening operating losses in the first nine months. However, there was an improvement in the third quarter, primarily due to the performance of their brand Theory.

The Covid-19 pandemic and government restrictions have played a significant role in shaping Fast Retailing’s performance. Japan’s declaration of a state of emergency in Tokyo, particularly before the Olympic Games, resulted in a decrease in footfall and impacted the company’s profitability. In response to these challenges, Fast Retailing has adjusted its annual profit outlook, projecting a 64% increase in operating profit compared to the previous prediction of ¥245 billion ($2.23 billion).

Despite these setbacks, Uniqlo has demonstrated resilience with strong revenue growth. Uniqlo Japan reported a substantial revenue expansion of 12.7% and an impressive increase of 51% in operating profit in the first nine months. This success can be attributed to the brand’s ability to meet customer demand for stay-at-home items and the popularity of their Fall Winter ranges. The third quarter also saw a significant increase in revenue, driven by strong sales of their Uniqlo U T-shirts, Kando pants, loungewear, and other items.

Uniqlo International also experienced positive growth, with a 9.8% increase in revenue and a remarkable 88.7% increase in operating profit in the first nine months. This growth was fueled by improved profitability in their East Asia operations and the recovery of all regions in the third quarter. The Mainland China market stood out with noteworthy growth in both revenue and profit, while North America and Europe reported substantial revenue gains and smaller operating losses.

GU, Fast Retailing’s affordable fashion brand, showed a consistent performance year-on-year, with a 7.1% increase in revenue and an 18.9% increase in operating profit in the nine months. However, recent sales were impacted by another state of emergency in Japan and a lack of alignment with prevailing trends. Despite these challenges, GU remains optimistic about its future prospects.

Fast Retailing’s Global Brands segment faced a decline in revenue and widening operating losses in the first nine months. Revenue dropped by 3.3% to ¥80.5 billion, and the segment reported an operating loss of ¥8.9 billion. However, there was a significant improvement in the third quarter driven by the performance of Theory. Revenue saw a sharp increase, and the operating loss reduced to ¥0.7 billion.

Overall, Fast Retailing’s performance in the third quarter reflects the challenges posed by the ongoing pandemic and government restrictions. While some brands, like Uniqlo and GU, have shown resilience and positive growth, others, such as the Global Brands segment, have faced more significant challenges. As the situation continues to evolve, Fast Retailing remains cautiously optimistic about its future prospects and adapts its strategies to meet changing consumer demands and market conditions.

Useful Links:
Uniqlo Official Website
GU Official Website