Fast Retailing, the parent company of Uniqlo, has reported strong Q1 results, attracting attention for its impressive performance. However, it is important to also evaluate the performance of the company’s other brands. Uniqlo witnessed substantial growth in both revenue and profit, but other brands within the group encountered difficulties.

A standout performer in the quarter was Fast Retailing’s youth-oriented brand, GU. This brand saw significant increases in revenue and profit, with revenue rising by 10.7% to ¥87.8 billion and operating profit increasing by 16.4% to ¥12.3 billion. Initially, the warm weather in September and October impacted sales of GU’s AW23 products. However, as the weather turned colder in November, sales picked up, aided by successful efforts to stock popular winter items. Heavy Weight Sweat items, Heat Padded outerwear, Parachute Cargo Pants, and other mass fashion trends were particularly popular. This contributed to a 0.7-point improvement in GU’s operating profit margin. Furthermore, enhancements in production efficiency helped to lower the cost of sales and improve the gross profit margin.

On the flip side, the Global Brands segment faced challenges during the quarter. Both revenue and profit declined, with revenue contracting by 2.4% to ¥36.6 billion and operating profit declining by 43.9% to ¥0.3 billion. The Theory brand experienced a decline in profits due to warm winter weather affecting sales, as well as higher personnel costs primarily in Theory USA. Consequently, there was a deterioration in the selling, general, and administrative expense ratio. Similarly, the PLST brand witnessed lower revenue and a slight operating loss due to a reduction in the store network compared to the previous year. Lastly, French label Comptoir des Cotonniers saw falling revenue due to sluggish consumer sentiment in the European market and warmer winter weather. However, the brand managed to narrow its losses as the gross profit margin improved.

While Uniqlo continues to shine, the performance of other brands within the Fast Retailing group presents some challenges. It remains to be seen how these brands will adapt and overcome these obstacles in the coming quarters.

Useful links:
Fast Retailing Annual Report 2020
Uniqlo Today News