Hong Kong company reporting season

Owner of Japanese clothes brand Uniqlo reports record full-year profit, forecasts steady growth

PUBLISHED : Friday, 12 October, 2018, 6:32am
UPDATED : Friday, 12 October, 2018, 2:38pm

Fast Retailing, owner of the Japanese casual wear brand Uniqlo, said Thursday its full-year profit hit a record, and forecast even stronger results in the current operating year owing to steady growth in Asia and a recovery at its stores in the US.

The company’s operating profit jumped 34 per cent to a record 236.2 billion yen (US$2.11 billion) for the financial year through August, in line with analysts’ median forecast for 237.5 billion yen, according to Refinitiv data. The company reported earnings per share of 1,517 yen.

The company’s Hong Kong depositary receipts ended half day trade on Thursday down 2.8 per cent at HK$39.90, ahead of the results announcement.

Driving the growth is increased sales in the US and Asia, according to the company. Looking ahead, the company said it expects “all four Fast Retailing business segments are expected to generate increases in both revenue and profit in fiscal 2019”.

“While the demand for Uniqlo products will remain strong in the Asia market, it is crucial for Uniqlo to strengthen its e-commerce strategies in line with its aggressive physical store expansion,” said Gordon Tsui, managing director of Hantec Group Hong Kong. “In China, in particular, the traffic in shopping malls remains low, owing to the prevalent use of fast payment and the convenience of logistics advancement.”

Founded in 1963 by Japanese billionaire Tadashi Yanai, Fast Retailing is mostly known for its success behind international chain store Uniqlo.

Yanai, one of Japan’s richest entrepreneurs, has said he wants Uniqlo to overtake H&M and Zara parent Inditex as the world’s top apparel retailer.

The retailer’s global ambitions are evident as tennis star Roger Federer was spotted in Uniqlo-branded apparel at Wimbledon in June. The Swiss tennis player has reportedly signed a US$300 million sponsorship contract with Uniqlo lasting 10 years.

Fast Retailing voluntarily suspended its trading on Hong Kong stock exchange with effect from 1pm on Thursday pending the release of the annual results announcement. Trading will resume on Friday morning.