• FY profit up 14.4% to JPY49.7bn
  • Net sales climb 16.8% to JPY685.0bn
  • Sees 24.5% hike in profit for year ahead

Japan's Fast Retailing Co Ltd is forecasting a 24.5% hike in profit for the year ahead, after surging sales at its Uniqlo casual clothing chain helped lift operating income to an eight-year high in the 12 months to August.

The company, which also operates the low-price g.u. casual brand as well as French brands Comptoir Des Cotonniers and Princesse Tam.Tam, said it is also planning ambitious expansion in China, Hong Kong, South Korea and Singapore.

The catalyst for this growth is a stellar performance in Fast Retailing's most recent financial year, with results released today (8 October) highlighting a 14.4% hike in profit to JPY49.7bn (US$561.8m).

Operating income soared 24.2% to JPY108.6bn as net sales climbed 16.8% to JPY685.0bn.

The engine of growth behind the figures continues to be its Uniqlo stores in Japan - which accounts for 78% of Fast Retailing's sales - where same-store sales rose 11.3% in the year.

The 770-store chain managed to lure customers away from its rivals with innovative lines like Heat Tech underwear which uses heat-trapping fabric, Bratop camisoles with built-in bras, and washable sweaters helping net sales rise 16.4% to JPY538.1bn.

Uniqlo's international stores have also contributed to expanded profits after operating income more than quadrupled from JPY0.3bn to JPY1.6bn on lower losses in the UK and US and business expansion in Asia.

Net sales here rose 28.8% year-on-year to JPY37.7bn.

In its other Japanese apparel business, popular lines such as the JPY990 jeans at the g.u. brand helped lower operating losses, although sales stayed flat at JPY51.5bn.

However, the worsening consumer environment in both Europe and the US was blamed for shrinking profits in the Global Brands operation.

Looking ahead, Fast Retailing expects sales for the year to August 2010 to rise 16.5% to JPY798.0bn,  with operating income climbing 10.5% to JPY120.0bn and profit up 24.5% to JPY62.0bn.

New large-format Uniqlo stores and unique lines like the +J Collection created with Jil Sander, are seen helping the chain's sales grow by 10.6% in Japan.

The number of stores in Asia is forecast to grow from 76 to 132 and next spring the first Uniqlo store is due to open in Russia.