record first half, Uniqlo’s international dynamism

Japanese ready-to-wear group Fast Retailing reported “record” half-year results on Thursday, boosted mostly by its flagship brand Uniqlo in North America, Europe and South-East Asia, and slightly raised its full-year profit forecast.

In the first half, from September 2023 to February 2024, net profit totalled 195.9 billion yen (approximately 1.2 billion euros), up 27.7% year-on-year, while operating profit 257 billion yen (+16.7% year-on-year), according to the press release.

Sales rose by 9% to 1,598.9 billion yen (9.7 billion euros), driven mainly by Uniqlo’s dynamic international business, but also by that of the group’s second major brand, GU.

In Japan, on the other hand, Uniqlo sales weakened (-2%), an under-performance that Fast Retailing blamed on an “insufficient level of products” adapted to a warmer-than-usual winter, as well as “poor communication” about its products.

In China too, the milder winter and a “general slowdown in consumer appetite” weighed on Uniqlo’s sales.

Apart from Uniqlo and GU, the group’s other brands (Theory, PLST, Comptoir des Cotonniers and Princesse tam.tam) remain convalescent: they reported a slight fall in total sales (-1.2% year-on-year) and an operating loss of 1.7 billion yen (-€103 million).

The number of Comptoir des Cotonniers shops has been reduced by 10% compared to last year, which partly explains the decline in sales, Fast Retailing said.

The group is still forecasting record results for 2023/24. On Thursday, it modestly raised its annual profit forecast to 320 billion yen (+8% year-on-year), 10 billion yen more than its previous target.

It maintained its annual operating profit forecast unchanged at 450 billion yen (+18.1% year-on-year), but lowered its sales forecast from 3,050 to 3,030 billion yen (€18.4 billion at current exchange rates). This would still be equivalent to robust sales growth (+9.5% year-on-year).

Fast Retailing has also raised its annual dividend forecast to 350 yen per share, compared with 330 yen previously. This would represent an increase of more than 20% on its dividend for the previous financial year.