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Fast Retailing profits power ahead in H1, outlook good

Upbeat news from Uniqlo parent Fast Retailing Co on Thursday. The Japan-based giant reported net profit more than doubled to ¥97.23bn ($891.5m) for the H1 period to end-February, helped by improving sales both at home and abroad and cost-cutting efforts.

Group operating profit jumped 31.5% to ¥130.66bn in the six months to end-February period. For Q2 alone, operating profit leapt a better-than-expected 80% to ¥42.1bn.

Half-year sales inched up 0.6% to ¥1.02trn as warmer-than-usual temperatures weighed on sales in January and February.

Fast Retailing’s international Uniqlo business saw its operating profit also leap 66% to ¥48.7bn. Total revenue rose 0.9% to ¥392.8bn. Exchange rate changes from year-ago levels pushed yen-based sales down by an average of 11%.

Uniqlo Japan revenue rose 0.3% on-year to ¥455bn as e-commerce sales rose 11.7% on-year, accounting for 6.2% of total revenue. Operating profit grew 7.3% to ¥68.7bn.

Uniqlo opened its 1,000th overseas store this fiscal year, more than triple the number it had just five years ago.

The group, meanwhile, stood by its full-year earnings forecast, expecting group net profit to more than double to ¥100bn with operating profit up 37% to ¥175bn on sales up 3.6% to ¥1.85trn.

For fiscal 2017, Uniqlo International expects to see a sharp expansion in operating profit on the back of profit gains from Greater China, Southeast Asia and Oceania and South Korea divisions, as well as “a considerable reduction” in overall losses from its North America ops. Analysts expect Fast Retailing’s earnings to jump 132% in fiscal 2017.

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