Uniqlo operator upgrades forecast on China demand

Fast Retailing, the Japanese operator of fast fashion brand Uniqlo, on Thursday upgraded its annual forecasts on strong overseas demand, as Chinese consumers return to stores.

For the six months to February, sales surged 20.4 percent to 1.46 trillion yen, while operating profit climbed 16.4 percent to 220 billion yen, the retailer said.

First-half net profit rose 4.5 percent to 153.4 billion yen.

For the year to August, the company upgraded its net profit forecast to 240 billion yen from an earlier target of 230 billion yen. The new sales target is set at 2.68 trillion yen, up from 2.65 trillion yen.

The company enjoyed robust sales across the world, including Southeast Asia, Australia, North America and Europe as they entered a “genuine growth phase”.

Uniqlo sales outside Japan jumped 27.3 percent while operating profit rose 22.2 percent.

The greater China region, too, was rapidly recovering, with record sales in January and February as consumers emerged from harsh Covid restrictions and returned to streets and shopping malls.

“This far outstripped expectations,” Takeshi Okazaki, chief financial officer, told a news conference.

“Demand for clothes has changed in the wake of the pandemic, and we are seeing rising demand for LifeWear — high quality and basic clothing that one can wear for a long time,” he said.

In Japan, Uniqlo’s winter clothing also enjoyed strong sales, also beyond the company’s expectation, Fast Retailing said.

The yen’s rise, however, increased the cost of imports, weighing down profits, the company added.

Global consumers are becoming increasingly sophisticated and selective, said Tadashi Yanai, chairman, president and chief executive officer.

“For consumers, prices are important but more than that, the value that each product brings is also important,” he said.

Over the next decade, he said he aimed to more than triple the annual sales to 10 trillion yen.

Shares in Fast Retailing rose 2.14 percent to 30,270 yen in Tokyo trading. — Agence France-Presse