Japanese clothing retailer Fast Retailing, which owns Uniqlo, announced on Thursday that its net profit for the six months ending in February surged by 27.7% compared to the previous year, reaching 195.9 billion yen ($1.28 billion). This increase was primarily driven by its strong performance in Europe and North America. As a result of this robust performance, the company has raised its full-year profit forecast for the fiscal year ending in August 2024 to 320 billion yen, up by 8% from the previous year. Initially projected at 310 million yen, the revised forecast also anticipates a 9.5% increase in sales to 3.03 trillion yen.
Uniqlo’s overseas sales witnessed a significant growth of 17% from the previous year. Fast Retailing has been actively expanding its presence in Europe and North America by opening new stores to cater to a broader customer base, resulting in a 25% increase in sales in both markets. The company anticipates that annual sales for Uniqlo’s European operations will reach a record high of 250 billion yen, marking a remarkable 30% increase from the previous year. Plans for further expansion include the opening of new stores in cities such as Nice, Rome, Milan, and Edinburgh.
With a market share of less than 0.5% in Europe, Uniqlo sees substantial growth opportunities, particularly among women and younger consumers. Takeshi Okazaki, Fast Retailing’s chief financial officer, highlighted the growing importance of these demographics, with women’s contribution to European sales rising from 45% in 2019 to 52% in 2023. In contrast, Uniqlo experienced a decline in same-store sales in China, its largest market in terms of store numbers, due to factors like weakened consumer confidence. Okazaki emphasized the company’s focus on improving store quality over expanding store numbers in China, intending to implement a “scrap-and-build” strategy over the next three years.
Meanwhile, sales in Japan decreased by 2% to 485.1 billion yen, attributed to warmer-than-average temperatures dampening demand for winter apparel from September to December. Looking ahead, Fast Retailing aims to enhance its product lineup in Asia and Australia to better suit tropical conditions, following a 17% increase in sales in these regions. CEO Tadashi Yanai emphasized the importance of investing in talent to drive the company’s growth, particularly through the empowerment of locally hired employees in regions like China. Yanai stressed the need for fair evaluation and adequate compensation amid global inflation to ensure the brand’s continued success and global support.
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