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Fast Retailing posts record Q3 profit on overseas Uniqlo sales
JAPAN'S Fast Retailing Co on Thursday reported a record high quarterly operating profit, in a sign the owner of clothing chain Uniqlo was reaping the benefits of a push to expand its overseas sales.
The retailer, which is chasing the top spot in worldwide apparel sales, flagged its ambitions last week when tennis star Roger Federer strode onto the court at Wimbledon in Uniqlo branded whites, in a sponsorship deal reportedly worth around US$30 million annually.
For the quarter ended May, Fast Retailing's operating profit was 68.4 billion yen (S$828.4 million), up 37 per cent from a year ago and above an average 59.1 billion yen estimate from four analysts polled by Thomson Reuters I/B/E/S.
Results were driven by overseas Uniqlo sales that topped domestic sales for a third consecutive quarter.
Fast Retailing, already Asia's biggest clothing retailer, reiterated its full-year operating profit view of 225 billion yen. Analysts expect better at 228.8 billion yen.
The company's international sales rose 28 per cent and overseas operating profit jumped 65 per cent in the nine months to May, driven mainly by Asian sales of Uniqlo that offers everything from T-shirts emblazoned with robot cat Doraemon designs to office wear such as shirts and blazers.
Fast Retailing, which is expanding Uniqlo's presence in Europe, recently said Denmark would be its ninth country of operation in the region.
Uniqlo's business is growing at home too, despite store numbers plateauing in recent years at just over 800 locations, with sales up 8 per cent in the first nine months of the year.
Uniqlo's online sales in Japan were up 33 per cent, accounting for 7.8 per cent of its total domestic sales.
Fast Retailing is determined to grow Uniqlo in the domestic market without using third-party sites, in contrast with another of Japan's top apparel chains, Shimamura Co Ltd, which has just started selling on the Zozotown online mall.
At its low-cost chain GU, sales rose 6 per cent in the nine months to May. Fast Retailing has ambitions to turn GU into a second Uniqlo but has struggled to replicate earlier hits such as 990-yen jeans. Discounting at the chain saw operating profit fall 20 per cent in the three months to May. REUTERS