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Tumbling sales at Uniqlo Japan have impacted first-quarter profits at parent company Fast Retailing.

For the three months to 30 November, group net profit amounted to JPY73.4bn (U$673.6m), representing a decline of 6.4% on the prior year period.

Group revenue, however, climbed 4.4% on last year to JPY644.4bn, helped by positive sales growth in Uniqlo’s international arm, it’s GU and Global Brands businesses.

At home, Uniqlo reported a decline in both revenue and profit in the period, with sales slipping 4.3% to JPY246.1bn and operating profit tumbling 29.9% to JPY37.9bn. Full-year same-store sales were down 4.3% year-on-year with sales of core winter ranges especially sluggish due to an unseaonably warm October and November. Online sales, however, grew 30.9.% to JPY23.7bn.

Uniqlo International, meanwhile, enjoyed higher revenues and profits on the back of better sales in Greater China, South Korea, Southeast Asia and Oceania. Uniqlo US and Uniqlo Europe were said to have generated significant revenue and profits.

Revenue in the international arm grew 12.8% to JPY291.3bn, while operating profit jumped 12.6% to JPY52.5bn, far outstripping that of Uniqlo Japan.

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Meanwhile, the group’s GU business saw higher revenues but a fall in profits, again attributed to unseasonal weather. Revene in the period climbed 7.7% to JPY65.4bn, while operating profit fell 4.9% to JPY8.5bn.

And it was a similar story at Global Brands with a fall in profits but increased revenue growth. The segment comprises businesses including Helmut Lang, Comptoir des Cotonniers, J Brands, Princesse Tan-Tam and Theory. 

While Theory reported a “significant” profit gain on stronger performance in the US, remaining labels all posted first-quarter losses.

Operating profit for the segment fell 9.9% to JPY2.7bn and revenues increased 1.8% to JPY40.7bn.

Full-year business estimates remain unchanged from initial forecasts Fast Retailing said, with the expectation of an 8% increase in consolidated revenue to JPY2.3trn and a 14.3% growth in consolidated operating profit to JPY270bn.

“While we expect operations that were most affected by the warm winter such as Greater China and South Korea will increase discounting in the second quarter to promote the sale of winter ranges, we predict Uniqlo International’s first-half revenue and profit will surpass our initial estimates. 

“By contrast, Uniqlo Japan is expected to report a larger decline in first-half profit than initially expected, given our plans to increase second-quarter discounting following the below-target first-quarter performance during the warm winter. However, we expect Uniqlo Japan profit will increase sharply in the second half on the back of an improved gross profit margin and strong cost controls, so we aim to generate higher overall revenue and profit at Uniqlo Japan for the full financial year.”

The group added it intends to ensure GU sales continue to rise on the back of the label’s new product mix, resulting in an expected higher full-year revenue and sharp full-year profit gain. In addition, the Global Brands segment is expecteed to generate higher revenue and a sharp rise in profit in FY2019.