Fast Retailing’s Profit More Than Doubles in First Half

Higher revenues, controlled discounting and a large foreign exchange gain boosted the company's bottom line.

TOKYO — Fast Retailing posted a first-half net profit more than double that of the same prior-year period, thanks to a large foreign exchange gain. A low comparative base due to a strong yen and over-discounting of products last year also boosted the gains.

For the six months ended Feb. 28, Fast Retailing’s net income totaled 97.23 billion yen, or $888.7 million, up from 47.04 billion yen, or $393.4 million, in the same period in 2016. The company’s operating profit gained 31.5 percent to 130.66 billion yen, or $1.19 billion. Fast Retailing registered revenue growth of 0.6 percent to 1.02 trillion yen, or $9.30 billion.

Dollar figures are converted at average exchange for the period to which they refer.

Uniqlo Japan generated increases in both sales and profit thanks to a successful anniversary sale last November and more controlled discounting of products compared to 2016.

Thanks to solid growth in mainland China and Southeast Asia, Uniqlo also saw both its sales and profit rise internationally. But the strong yen pushed revenue down by an average of 11 percent, resulting in overall sales growth of 0.9 percent among Uniqlo’s international operations.

At a press briefing on the results, the retailer’s chairman, president and chief executive officer, Tadashi Yanai, reiterated many of the goals that he discussed at the unveiling of Uniqlo’s new corporate headquarters in Tokyo last month. He said the company will continue to streamline distribution and improve its e-commerce platforms in order to better serve customers in what is becoming an increasingly digitized and globalized world.

“There are a lot of big changes in the world, and I think these present big opportunities for Fast Retailing,” Yanai said.

But even while it continues to strengthen its online services, the company will not neglect off-line growth either. Yanai mentioned that there is a growing middle class that will soon encompass some four billion people worldwide. As much of this economic growth is centered in Asia, so is the executive’s focus for Fast Retailing’s growth.

As of the end of February, Uniqlo counted 1,029 stores outside of Japan, an increase of 139 year-on-year. As the company continues to grow, Yanai plans to practice “individual store management,” meaning each shop will look and feel slightly different depending on its location and the needs of its local customers.

Fast Retailing left unchanged its guidance for the fiscal year ending Aug. 31. It is expecting net profit to more than double to 100 billion yen, or $912.6 million at current exchange. The company predicts operating profit will grow by 37.5 percent to 175 billion yen, or $1.6 billion. It forecasts yearly sales growth of 3.6 percent to 1.85 trillion yen, or $16.88 billion.

Last year, Yanai slashed his ambitious 2020 sales goal from five trillion yen, or $44.45 billion, to 3 trillion yen, or $26.67 billion. For now, that figure remains unchanged.

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