Uniqlo owner Fast Retailing posts rise in H1 revenue and profit
By Prachi Singh
11 Apr 2019
Fast Retailing Group has reported 6.8 percent rise in its first half revenues to 1.2676 trillion yen, while operating profit of 172.9 billion yen (1.56 billion dollars), increased 1.4 percent, and pre-tax profit rose 5.5 percent to 174.2 billion yen (1.57 billion dollars). The company said in a statement that profit attributable to owners of the parent was 114 billion yen (1.03 billion dollars), representing growth of 9.5 percent.
First half revenue and profit at Uniqlo Japan declined by 0.5 percent and 23.7 percent to 491.3 billion yen (4,42 billion dollars) and 67.7 billion yen (0.61 billion dollars), respectively. The company’s same-store sales were down 0.9 percent due to warm winter effect. However, the company said, same-store sales did recover to rise 2.8 percent year on year in the second quarter after the temperature turned colder from December onwards. Online sales rose 30.3 percent, raising the e-commerce proportion of total sales from 7.5 percent to 9.9 percent. First half gross profit margin contracted 3.3 points as a result of stronger discounting in second quarter.
Uniqlo International improves sales by 14.3 percent
Contrary to Uniqlo Japan, revenues of Uniqlo International increased 14.3 percent to 580 billion yen (5.22 billion dollars), while operating profit improved 9.6 percent to 88.4 billion yen (0.80 billion dollars). Looking at individual markets, the company said, Mainland China continued to report strong results, which helped Uniqlo Greater China (Mainland China, Hong Kong, Taiwan) achieve double-digit growth in both revenue and profit. Uniqlo Southeast Asia & Oceania also reported revenue and profit gains. Uniqlo South Korea reported rising revenue and profit, while Uniqlo USA turned a profit in the first half. Uniqlo Europe, the company added, reported a flat result.
Revenues at GU improved 10.7 percent to 117.1 billion yen (1.05 billion dollars) and operating profit was up 54.3 percent to 14.1 billion yen (0.13 billion dollars). Same-stores sales, Fast Retailing said, recovered on the back of focus on mass trend-oriented clothing and successful marketing, TV and online advertising. Global Brand revenue of 77.7 billion yen (0.70 billion dollars) dropped 0.9 percent, while operating profit increased. Theory achieved rise in profit on a strong performance in the United States, while Comptoir des Cotonniers operation reported a wider loss on continued sluggish sales.
Fast Retailing cuts FY2019 forecast
To reflect the below-plan first-half performance, Fast Retailing has revised down its full-year forecasts for the business year through August 2019 for both business profit and operating profit by 10 billion yen each. However, the company still expects to achieve another record full-year performance.
For FY19, consolidated revenue is expected to reach 2.3000 trillion yen, up 8 percent, 5 percent rise in consolidated business profit to 265 billion yen (2.39 billion dollars), 10.1 percent increase in operating profit to 260 billion yen (2.34 billion dollars), and 6.6 percent rise in profit attributable to owners of the parent to 165 billion yen (1.49 billion dollars) . The company forecasts an annual dividend per share in FY19 of 480 yen (4.32 dollars), which includes an interim dividend of 240 yen (2.16 dollars).