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Fast Retailing Co. reported better-than-expected fiscal first-half profit and raised its full-year forecast on the back of higher demand for its Uniqlo casual apparel.
Operating profit climbed 18 percent to 304 billion Japanese yen ($2.07 billion) in the six months ended February, according to a statement Thursday. That compares with the 293.5 billion Japanese yen average of analyst estimates. Sales increased 12 percent to 1.79 trillion Japanese yen for the period.
Sales in Japan, Europe, North America and the Asia-Pacific showed “very good performance” for the first half, Fast Retailing said. The results show Asia’s largest clothing retailer is benefiting from its strategy of growing in newer markets beyond its traditional strongholds of Japan and China.
Japan sales rose thanks to a strategic roll-out of products, marketing tailored to temperature trends and foreign shoppers, Fast Retailing said.
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Operating profit in China fell about 11 percent due to consumer sentiment across the country, as well as insufficient adaptation of products to meet the needs amid greater-than-usual temperature differences between areas, it said.
The company raised its full-year operating profit forecast by 2.8 percent to 545 billion Japanese yen. Previous guidance was 530 billion Japanese yen.
The company released its earnings after markets in Tokyo closed. Shares of Fast Retailing had jumped 9.1 percent in Tokyo Thursday on a broad market rebound after US President Donald Trump announced a 90-day pause on higher tariffs that had hit dozens of trade partners.
The impact of the new US tariffs on the company’s operating profit for the second half of the year will be approximately 2 to 3 percent, based on the assumption that they remain at they were announced last week, chief financial officer Takeshi Okazaki said in a post-earnings briefing in Tokyo Thursday. The outlook may be revised if the assumption changes, said Okazaki.
The impact of the duties is expected to be limited as “a considerable volume” of products has already been imported into the US for the latter half of the fiscal year, according to Okazaki. The company will closely monitor the situation and respond appropriately for the next fiscal year, he added.
By Kanoko Matsuyama
Learn more:
Fast Retailing Expected to Post 14% Jump in Q2 Profit as Tariffs Loom
The Japanese parent of Uniqlo is expected to post another quarter of strong earnings on Thursday, but the focus will be on how the firm navigates a trade environment thrown into disarray by new US tariffs.
