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Fast Retailing reports rise in annual revenues and profit

By Prachi Singh

11 Oct 2018

The Fast Retailing Group, for the twelve months to August 31, 2018, reported consolidated revenue of 2.1300 trillion Japanese yen, up 14.4 percent year-on-year and operating profit of 236.2 billion Japanese yen, up 33.9 percent year-on-year. The company attributed this strong performance to a significant revenue and profit increase at Uniqlo International, and stable revenue and profit growth at Uniqlo Japan.

The consolidated gross profit margin improved by 0.5 points year-on-year in fiscal 2018. Profit before income taxes expanded to 242.6 billion Japanese yen, up 25.5 percent and profit attributable to owners of the parent increased to 154.8 billion Japanese yen, up 29.8 percent.

Uniqlo Japan and Uniqlo International drive growth at Fast Retailing

Uniqlo Japan revenues rose 6.7 percent to 864.7 billion Japanese yen and operating profit totalled 119 billion Japanese yen, an increase of 24.1 percent. The company’s full-year same-store sales, including online sales, expanded by 6.2 percent driven by rising customer visits and in the first half, same-store sales grew at 8.4 percent on the back of unseasonably cold winter weather and timely increases in production of stronger selling items. In the second half, same-store sales expanded by 3.3 percent on the back of strong sales of summer items such as Airism, UT and Dry T-shirts.

Full-year online sales increased by 29.4 percent to 63 billion Japanese yen, constituting 7.3 percent of total revenue. The gross profit margin improved by 0.4 point year-on-year.

Uniqlo International revenue totalled 896.3 billion Japanese yen, up 26.6 percent and operating profit increased to 118.8 billion Japanese yen, an increase of 62.6 percent. The gross profit margin improved by 1.1 points year-on-year driven by new store openings and consistently strong sales performances from all operations.

The GU business segment reported a 6.4 percent rise in revenue but 13.1 percent fall in profit in fiscal 2018. The company’s said, GU’s full-year same-store sales declined due to issues with product mixes and volume planning. Against this backdrop of sluggish sales, the full-year gross profit margin declined 0.1 point year-on-year and the business expenses to net sales ratio increased by 1.2 points.

Global Brands revenue rose by 9.5 percent to 154.4 billion Japanese yen but the segment reported an operating loss of 4.1 billion Japanese yen, following the 9.9 billion Japanese yen in impairment losses on Comptoir Des Cotonniers and other labels. The Theory fashion operation reported a rise in both revenue and profit, driven by stable growth in both the United States and Japan, and a favourable expansion in Theory’s Japan-based PLST brand. The company added that Comptior Des Cotonniers, Princesse Tam.Tam and J Brand reported continued losses for the full business year.

Fast Retailing expects 8 percent revenue growth in FY19

In fiscal 2019, Fast Retailing expects to achieve consolidated revenue of 2.3 trillion Japanese yen, a growth of 8 percent, operating profit of 270 billion Japanese yen, an increase of 14.3 percent, profit before income taxes of 270 billion Japanese yen, a rise of 11.3 percent and profit attributable to owners of the parent of 165 billion Japanese yen, up 6.6 percent.

All four Fast Retailing business segments are expected to generate increases in both revenue and profit in fiscal 2019. The company forecasts the overall Fast Retailing Group network will expand to a total of 3,677 stores by the end of August 2019: 827 stores (including franchise stores) at Uniqlo Japan, 1,412 stores at Uniqlo International, 423 stores at GU and 1,015 stores at Global Brands.