Uniqlo International and GU drive sales and profit growth at Fast Retailing
By Prachi Singh
10 Oct 2019
For the year ended August 31, 2019, Fast Retailing Co. Ltd., parent of Uniqlo brand announced consolidated revenues of 2.2905 trillion yen, up 7.5 percent and operating profit of 257.6 billion yen, up 9.1 percent on the prior year. The company said in a statement that this impressive performance was due largely to strong results from Uniqlo International, and significant increases in both revenue and profit of GU casual fashion brand. The consolidated gross profit margin declined by 0.4 points, while profit before income taxes expanded to 252.4 billion yen, up 4 percent and profit attributable to owners of the Parent increased to 162.5 billion yen, an increase of 5 percent compared to the prior year.
Revenues at Uniqlo Japan of 872.9 billion yen, rose 0.9 percent, while operating profit totalling 102.4 billion yen, declined 13.9 percent. The company added that full-year same-store sales, including online sales, expanded by 1 percent. Full-year online sales increased by 32 percent to 83.2 billion yen, and the online sales proportion of total revenue rose from 7.3 percent to 9.5 percent. On the profit front, Fast Retailing added, the gross profit margin contracted by 1.7 points, adversely affected by the warm winter and an early rundown of excess Spring Summer inventories.
Fast Retailing’s Uniqlo International and GU showcase positive momentum
Revenue from the Uniqlo International segment, the company further said, topped 1 trillion yen for the first time, and the segment reported a consistently high operating profit margin of 13.5 percent. Overall, Uniqlo International’s revenue totalling 1.0260 trillion yen, increased 14.5 percent and operating profit increased 16.8 percent to 138.9 billion yen. Uniqlo Greater China reported revenue expansion of 14.3 percent to 502.5 billion yen and operating profit rise of 20.8 percent to 89 billion yen. The region’s same-store sales continued to rise and the region’s online sales also expanded by 30 percent in fiscal 2019.
Both revenue and profit of Uniqlo Southeast Asia & Oceania expanded by approximately 20 percent, with revenue reaching the 170 billion yen. However, both revenue and profit declined at Uniqlo South Korea. Uniqlo USA managed to reduce its operating loss and Uniqlo Europe achieved rising revenue and profit, with sales reaching the 100 billion yen, and the Russian operation continuing to generate strong revenue and profit gains.
Uniqlo International opened its first store in the Netherlands in Amsterdam in September 2018, followed by a first store in Denmark in Copenhagen in April 2019, a first store in Italy in Milan in September 2019, and a first store in India in Delhi in October 2019.
The GU business segment recorded revenues of 238.7 billion yen, up 12.7 percent and operating profit doubled to 28.1 billion yen, up 139.2 percent. Full-year same-store sales increased on the back of the company’s decision to switch the focus of GU’s product mix to mass fashion trends and to strengthen GU marketing. GU’s operating profit margin also improved by 6.2 points to 11.8 percent. Global Brands revenue declined 2.9 percent to 149.9 billion yen, while the segment reported an operating profit of 3.6 billion yen, compared to a 4.1 billion yen operating loss in the previous year following the recording of 9.9 billion yen in impairments losses on Comptoir des Cotonniers and other labels. The Theory fashion operation reported a rise in both revenue and profit on the back of stable growth. While our Japan-based PLST brand reported a rise in revenue, operating profit came in flat due to the higher costs of increased new store openings. Comptoir des Cotonniers, Princesse tam. tam and J Brand reported continued losses for the fiscal year ended August 31, 2019.
Picture credit: Charley Gallay/Getty Images for Uniqlo