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Uniqlo drives revenue and profit growth at Fast Retailing Group

By Prachi Singh

Jul 15, 2021

Management

Image: Uniqlo, Facebook

The Fast Retailing Group’s revenue and profit increased significantly in the first nine months with consolidated revenue rising to 1.6980 trillion yen, up 9.9 and operating profit expanding to 227.8 billion yen, up 72.1 percent.

The company said in a release that the group performance recovered as profitability, primarily at Uniqlo operations, improved in the first half. In the third quarter, performance picked up at all four business segments, generating significant increases in both revenue and profit compared to the previous year when business was hit by the Covid-19 pandemic.

The company’s pre-tax profit rose to 245.6 billion yen, up 72.5 percent and profit attributable to owners of the parent rose to 151.3 billion yen, up 67 percent in the nine month period.

Uniqlo Japan posts rise in revenue and profit

The company added that Uniqlo Japan reported revenue expansion to 675.1 billion yen, up 12.7 percent and rise in operating profit to 119.5 billion yen, up 51 percent.

Uniqlo Japan’s first-half revenue rose and profit expanded significantly on the back of strong sales of stay-at-home products and fall winter ranges. From March to May 2021, the company further said, revenue increased considerably on the back of strong sales of Uniqlo U t-shirts, Kando pants and other summer ranges along with loungewear, ultra stretch active pants, and other items.

However, the company’s third quarter sales struggled in the face of a higher-than-anticipated Covid-19 impact and inability to fully convey the new, newsworthy elements of products to customers.

Uniqlo International witnesses improved result across geographies

Revenue at Uniqlo International rose to 739.6 billion yen, up 9.8 percent and operating profit increased to 97.7 billion yen, up 88.7 percent with profit increasing significantly in the first half driven by improved profitability in East Asia operations.

The company said, in terms of geographies, the Mainland China market reported large rises in both revenue and profit, Uniqlo South Korea moved back into the black in terms of operating profit. Uniqlo South Asia, Southeast Asia & Oceania (Southeast Asia, Australia, and India) reported a large rise in revenue and a return to the black in terms of operating profit.

Uniqlo North America and Uniqlo Europe reported revenue gains but smaller operating losses as the Covid situation improved in those regions. From March to May 2021, performance from the Greater China region fell short of the business estimates.

Performance of GU and other brands under Fast Retailing portfolio

GU business saw nine month revenue climb to 200.8 billion yen, up 7.1 percent and operating profit expanded to 24.3 billion yen, up 18.9 percent.

From March to May 2021, the company said, items such as chef’s pants, airy shirts, and colored flared slacks contributed to the rise in GU revenue. However, sales struggled and GU performance fell short of business estimates due to the announcement of another state of emergency in Japan and the fact that some of the GU products did not fully grasp the prevailing trend.

Global Brands revenue declined and operating losses widened in the first nine months. Revenue declined to 80.5 billion yen, down 3.3 percent and the segment reported an operating loss of 8.9 billion yen compared to 6 billion yen in the first nine months of fiscal 2020.

The company said, in the first half, Global Brands performance worsened significantly, but performance, primarily driven by Theory, picked up in the third quarter, with revenue rising sharply and the operating loss shrinking to 0.7 billion yen compared to an operating loss of 6.7 billion in the third quarter of fiscal 2020.