Fast Retailing Co Ltd, operator of the Uniqlo-brand casual-wear shops, on Thursday (12 July) reported an 11.5% drop in group profit for the nine months to May, blaming losses at its overseas subsidiaries and new GU and Onezone formats.

Net income for the September-May period fell to JPY31.6bn (US$258.7m), from JPY35.7bn in the same period last year.

Fast Retailing, which earlier this month launched a $900m buyout bid for Jones Apparel Group's Barneys New York subsidiary, said group sales rose 18.8% year-on-year to JPY441.2bn helped by a 3.1% climb in same-store sales at the domestic Uniqlo operation.

Operating income fell 5.0% to JPY59.3bn, with the mainstay domestic Uniqlo stores down 4.6% and a wider loss at Uniqlo USA Inc, Onezone Corporation and GU Co Ltd.

In the third quarter from March to May, same-store sales at Uniqlo shops rose 3.7% on jeans and linen promotions, but slowed at the end of the period as mild weather delayed the start of the country's 'Cool Biz' summer clothing drive.

Fast Retailing said sales at its newly formed GU cheaper casual clothing operation, which opened in October 2006 and now has 50 stores, fell "far short" of initial projections, and that its domestic footwear chain Onezone posted a third-quarter loss.

But it added that third-quarter sales at its French operation, Comptoir Des Cotonniers and lingerie brand Princesse Tam.Tam were strong and now plans to open new stores in Europe and Japan.

For the full-fiscal year to end August, the company cut its group net profit projection to JPY36.9bn from its previous outlook of JPY38.2bn. Sales are expected to rise 19.2% to JPY535.1bln.