Uniqlo’s owner beat analyst estimates with 213.79 billion yen in operating profit and raised its annual forecast as Japan tourism strength offset softer demand in China.
Fast Retailing, the Japanese owner of Uniqlo, reported a 45.7% rise in quarterly operating profit and increased its full-year forecast, putting it on track for a fifth straight year of record earnings. Operating profit reached 213.79 billion yen ($1.32 billion) in the three months through May, up from 146.74 billion yen a year earlier and ahead of the 177.73 billion yen average of seven analyst estimates compiled by LSEG (London Stock Exchange Group data provider). Net profit for the quarter rose 39% from a year earlier to 146.7 billion yen ($902.1 million), beating a Visible Alpha analyst estimate of 118.9 billion yen. The company lifted its full-year operating profit outlook to 730 billion yen from 700 billion yen. Fast Retailing is closely watched as a gauge of consumer spending in Japan and mainland China, where it operates almost 900 stores. Its business has benefited in Japan from a tourism boom fueled by a weak yen, while growth in China has slowed amid weak consumer sentiment, leading to store closures and restructuring. The retailer has also been expanding in Europe and North America as it looks beyond China, its largest overseas market, while navigating supply-chain and logistics disruption tied to the Middle East conflict and shifting clothing demand caused by extreme weather.