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April 14, 2022

Fast Retailing sees profits, sales jump despite China lag

Fast Retailing has booked a jump in first-half profits and higher sales despite China performance lagging as a result of Covid restrictions.

By Hannah Abdulla

Fast Retailing, which owns the Uniqlo and Gu brands, said the result can be attributed primarily to an expansion in business operations, with strong performances reported by Uniqlo operations in South Asia, Southeast Asia & Oceania, North America, and European regions.

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  • Revenue increased to JPY1.21trn (US$9.7bn) from JPY1.2trn a year earlier.
  • Operating profit rose 12.7% year on year to JPY189.2bn.
  • Profit for the period increased to JPY154.3bn from JPY109.2bn
  • Profit attributable to owners of the parent grew to JPY146.8bn from JPY105.8bn a year earlier.

However, Uniqlo operations in Japan and the Greater China region as well as the Gu business segment reported declines in H1 revenue and profit.

Fast Retailing results summary for H1

Uniqlo Japan

  • Revenues 10.2% down year-on-year to JPY442.5bn
  • Operating profit down 17.3% to JPY80.9bn.
  • Same-store sales 9% lower year on year.

Uniqlo International

  • Revenues up 13.7% year on year to JPY593.2bn.
  • Operating profit up 49.7% year on year to JPY100.3bn.

GU

  • Revenue fell 7.4% year on year to JPY122.8bn.
  • Operating profit fell 40.9% to JPY9.3bn.

Global Brands

  • Revenue grew 8.1% to JPY58.9bn.
  • Operating profit of JPY1bn compared with a loss of JPY8.1bn for the same period last year.

“As a united group, we are determined to strengthen initiatives designed to expand our business operations and promote sustainability as part of our quest to become a global number one brand. We work hard to ensure our LifeWear ultimate everyday clothing is produced in working environments that are healthy, safe, and environmentally conscious, and strive to help solve a variety of social issues,” the group said in its financial results announcement release.

“We are currently channelling our efforts into expanding our e-commerce, Uniqlo International, and GU businesses as key pillars of operational growth. With regards to e-commerce, we are accelerating the building of a framework that will promote our main business by melding online and physical stores so we can offer as many of the products and information that customers want, whenever they want them. We are already pressing ahead with reforms that will enable us to offer more services that combine the strengths of our physical store and e-commerce network and unify inventory management. Regarding Uniqlo International, we are accelerating the opening of new stores in all markets and areas in which we operate, and seeking to instill deeper and more widespread empathy for Uniqlo’s LifeWear concept by opening global flagship stores and large-format stores in the world’s major cities. In terms of our GU segment, we are working to strengthen GU’s position as a brand that offers fun fashion at amazingly low prices and seeking to expand the GU store network primarily in Japan.”

Last month Fast Retailing hit headlines as it committed to keeping stores open in Russia; in stark contrast to its global peers, after firms such as Nike, Inc and Puma AG, suspended operations in the country due to its invasion of Ukraine. 

The brand then made a U-turn following a social media backlash saying it became clear it could no longer proceed due to a ‘number of difficulties’ and therefore, decided to temporarily suspend its operations from 10 March. 

Related Companies

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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