Oct 14, 2021
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Fast Retailing bounces back as Uniqlo and Theory improve

Oct 14, 2021

Japanese giant Fast Retailing has reported operating profit above analysts’ expectations and expects the figure to climb further in the year ahead. 


The Uniqlo and Theory owner’s revenue rose 6.2% in the year to August 31, partially recovering from the 12.3% revenue drop of the previous financial year. 

This time, revenue reached ¥2.13 trillion (€16.2bn/£13.7bn/$18.8bn), led by China. In fact, Uniqlo revenue for China, Hong Kong and Taiwan rose almost 17%.

While the total group sales rise wasn’t huge, net profit leapt 88% to ¥169.85 billion as the impact of the pandemic in 2020 had devastated earnings. The company expects revenue to rise 3.1% to ¥2.2 trillion in the current year and net profit should rise 3% to ¥175 billion. 

The company said business performance recovered at Uniqlo. Its Uniqlo Japan ops reported revenue of ¥842.6 billion (up 4.4% year-on-year) and a large increase in operating profit to ¥123.2 billion (up 17.7%). Full-year same-store sales (including e-commerce) increased 3.6%. 

In the first half, same-store sales rose 5.6%“on the back of strong sales of products that fulfilled customer demand for stay-at-home items as well as core Fall/Winter ranges”. However, same-store sales increased only 0.9% in H2 “as sales were adversely impacted by the declaration of a state of emergency and unfavourable weather”.

But full-year e-commerce rose a healthy 17.9% to ¥126.9 billion to make up 15.1% of total revenue. The Uniqlo Japan gross profit margin improved 1.4 points as it focused on full-price sales.

Uniqlo International “recorded significant increases” with revenue up 10.2% to ¥930.1 billion and operating profit expanding 121.4% ¥111.2 billion yen. 

As mentioned, Greater China  saw revenue rising 16.7% to ¥532.2 billion and operating profit expanding by 52.7% to ¥100.2 billion. But South Korea reported a slight decrease in full-year revenue, but the operation did manage to move back into the black. However,  Southeast Asia, Australia and India reported a 15%decline in operating profit in after suffering the heavy impact of the pandemic throughout the period. 

Sales recovered sharply in North America once Covid-19 restrictions were eased from May, helping the North American operation report a profit in the second half and halve its full-year loss. And Europe reported “a large rise in revenue and a positive operating profit thanks to strong e-commerce sales and a strong performance from our Russia operation”. 

Benoit Florençon

Despite the pandemic, the international unit has been able to “greatly improve profitability in line with the recoveries in sales in North America and Europe thanks to some determined reforms of earnings structures that focused on improving gross profit margins, closing unprofitable stores, reducing fixed costs, and normalising inventory levels”.


Meanwhile, its GU brand recorded an increase in revenue but a decline in profit, with revenue up 1.4% to ¥249.4 billion and operating profit down 7.6% to ¥20.1 billion. In H1, items such as chef’s pants and sweat-style knits sold well. However, in H2, sales fell short of expectations after GU was hit by the Japanese state of emergency, and “suffered lost sales opportunities caused by shortages of strong-selling items, and produced some products that did not fully grasp the prevailing fashion trend”. 

This meant full-year same-store sales declined slightly and the gross profit margin dipped. But GU e-commerce sales rose 50% compared to fiscal 2019 levels and made up 11% of its total sales.

Finally, the Global Brands segment reported a 1.3% decline in revenue to ¥108.2 billion and an operating loss of ¥1.6 billion compared to a ¥12.7 billion loss in the previous year.This narrower loss was mainly due to the gain from the liquidation of J Brand Inc (although the company continues to own the brand and will still offer products under the label).

An improved performance from Theory also helped. The Theory operation reported an increase in revenue and a return to the black thanks to smaller losses in the US and a strong performance in Asia (Mainland China and Hong Kong mainly), which reported significant rises in both revenue and profit.

Its PLST label reported “a decline in revenue and an operating loss of similar magnitude to the previous year” and Comptoir des Cotonniers reported a decline in revenue and a wider operating loss due to French Covid restrictions.

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