On Thursday, Japan’s Fast Retailing Co disclosed a 25% surge in first-quarter operating profit, propelled by robust overseas sales. The Uniqlo operator is set to achieve a third consecutive year of record earnings.
Earnings for the three months ending in November amounted to 146.7 billion yen ($1.01 billion), reflecting a notable increase from the 117.1 billion yen reported in the same period the previous year.
The consensus forecast was for 137.9 billion yen, according to the average estimate of five analysts surveyed by LSEG.
Fast Retailing maintained its full-year operating profit forecast at 450 billion yen, following record earnings of 381.1 billion yen in fiscal 2023.
Uniqlo noted a significant surge in revenue and profit for its operations in mainland China during the first quarter.
Founded and led by Japan’s richest man, the company secured successive record earnings over the past three years, driven by its aggressive growth strategy overseas.
In fiscal 2023, business in mainland China, its largest foreign market, experienced a revival after enduring over two years of slowdown due to the strict zero-COVID policy, which entailed city-wide lockdowns.
Uniqlo’s Expansion Plans: 20 New Stores in the US and Canada
During China’s economic downturn, the company intensified its efforts in North America, resulting in nearly doubling operating income last year. Fast Retailing aims to expand its presence by opening 20 new stores in the United States and Canada in 2024, in addition to the 72 stores already in operation as of the end of December.
Fast Retailing anticipates achieving another record profit in 2024, although the company, recognized for its rapid introduction of seasonal items like fleece jackets and thermal wear, could face challenges due to climate change.
Last year, deemed the hottest on record, analyst Mark Chadwick predicted a “sluggish beginning to the fiscal year” in a report on the Smartkarma platform before the results were announced, citing unusually warm conditions from September through December.
In October, Fast Retailing announced its intention to launch 80 new stores annually in Greater China, encompassing Hong Kong and Taiwan. With 931 Uniqlo outlets in mainland China, surpassing the count in Japan, the company stands as a key indicator for retailers operating in the world’s second-largest economy.
Fast Retailing’s shares surged by 32% in 2023, surpassing the 30% growth of the benchmark Nikkei index.
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