Fast Retailing reports higher sales and profit gains in Q3
For the third quarter, Fast Retailing said that the company reported higher-than-expected revenue and profit gains. Consolidated revenue for the nine months expanded 15.3 percent year-on-year to 1.7041 trillion yen and operating profit increased by 32.3 percent to 238.8 billion yen. In the third quarter from March to May 2018, the company said, operating profit rose 36.9 percent on the back of significant profit gains at both Uniqlo International and Uniqlo Japan.
Uniqlo Japan revenue expanded 6.3 percent to 210.7 billion yen and operating profit rose 31.3 percent to 31.3 billion yen. Same-store sales, the company added, increased by 5.4 percent on strong sales of AIRism, UT and Dry T-shirts and other summer items. The gross profit margin improved by 0.7 point on more constrained discounting, while operating profit increased 29.6 percent in the nine months from September 2017 through May 2018, to 120 billion yen.
Uniqlo International posts revenue and profit growth
Revenue at Uniqlo International increased 23.7 percent to 208.6 billion yen and operating profit rose 63.7 percent to 31.6 billion yen. The company said, Greater China, South Korea, and Southeast Asia & Oceania generated especially large profit gains, while Uniqlo USA’s operating loss shrank. Operating profit expanded 65 percent to 112.4 billion yen in the nine months.
At GU, revenue totalled 60.8 billion yen, up 3.3 percent, while operating profit totalled 5.9 billion yen, a decline of 20 percent. The company added that operating profit figure fell far short of expectations, while same-store sales declined and the gross profit margin shrank 1.9 points on more forceful discounting. Operating profit expanded only slightly in the nine months to May 2018, rising 1.7 percent to 15 billion yen.
At Global Brands, revenue rose 7.4 percent to 36.3 billion yen and operating profit expanded 25.3 percent to 2.1 billion yen in the March-to-May quarter. The Theory fashion label generated gains in both revenue and profit, while Comptoir des Cotonniers reported a wider loss. Global Brands reported an operating loss of 3.5 billion yen in the nine months, following the recording of 8.9 billion yen first-half impairment loss largely at Comptoir des Cotonniers.
Fast Retailing expects record operating profit for FY18
Fast Retailing said, current estimate for FY2018 include consolidated revenue of 2.1100 trillion yen, a rise of 13.3 percent, consolidated operating profit of 225 billion yen, increase of 27.5 percent, profit attributable to owners of the parent of 130 billion yen, a rise of 9 percent, and earnings per share of 1,274.41 yen.
Uniqlo International and Uniqlo Japan are expected to generate large gains in operating profit, GU to report a profit decline, and Global Brands to report an operating loss following the recording of first-half impairment losses. The company currently forecasts an annual dividend per share of 400 yen, including an interim dividend of 200 yen, an increase of 50 yen on the previous year’s dividend.