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Fast Retailing logs record profits on strong overseas Uniqlo sales

This photo taken on Feb. 26, 2019 shows the logos of Japanese casual fashion brand Uniqlo on the company's signboard in Tokyo. (Kyodo)

TOKYO (Kyodo) -- Fast Retailing Co. reported on Thursday record profits and sales for the fiscal year through August, propelled by its strong Uniqlo casual clothing brand sales in Asia and Oceania.

The operator of the Uniqlo chain expects another record year for the current business year, led by solid demand in China.

The Japanese fashion retailer said group net profit rose 5.0 percent to a record 162.58 billion yen ($1.5 billion) in the fiscal year ended Aug. 31.

Group operating profit climbed 9.1 percent to 257.64 billion yen last fiscal year, on group sales of 2.29 trillion yen, up 7.5 percent, both also record highs.

Overseas sales of Uniqlo clothing rose 14.5 percent to 1.03 trillion yen, exceeding the 1 trillion yen mark for the first time, driven by robust demand in China, Southeast Asia and Oceania.

Solid growth in the markets offset sales in South Korea hit by a boycott of Japanese products amid a chill in Tokyo-Seoul relations.

"I feel that our clothing is being accepted by countries around the world," Fast Retailing Chief Executive Officer Tadashi Yanai said at a press conference.

Yanai said he has no plan to review the company's business strategy for South Korea, even as sales there fell "substantially" in July and August.

"I don't expect the difficult situation in South Korea to continue for a long time so I want to stay optimistic," Yanai said.

Uniqlo clothing sales in Japan rose 0.9 percent to 872.9 billion yen but operating profit fell 13.9 percent to 102.4 billion yen, squeezed by fierce price competition. Demand for winter items was also slow in the first half due to relatively warm winter weather.

The retailer projects a 7.6 percent increase in net profit to 175 billion yen and a 6.7 percent rise in operating profit to 275 billion yen in the current fiscal year on sales of 2.4 trillion yen, up 4.8 percent.

Still, Chief Financial Officer Takeshi Okazaki said the company needs to pay close attention to the impact on consumer spending of the consumption tax hike from 8 percent to 10 percent on Oct. 1.

"We haven't seen any big impact of the tax hike so far but the environment surrounding consumption seems to be severe," Okazaki said at the press conference.

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