Fast Retailing tumbles to five-week low after earnings miss target
TOKYO (Reuters) - Shares of Fast Retailing Co Ltd (9983.T), operator of the Uniqlo clothing chain, tumbled as much as 5.4 percent to a five-week low in early trade on Friday after its full-year operating profit came in below its own target.
Fast Retailing posted a 5.1 percent increase in operating profit to 132.92 billion yen ($1.4 billion) for the year ended on August 31. The result was 7.4 percent below its guidance of 143.50 billion yen, as heavy discounting depressed margins at its flagship Uniqlo stores.
Fast Retailing was the second-most traded stock by turnover on the main board.
"We lower our earnings outlook for Uniqlo Japan as we expect customers to remain attracted to discount items," Goldman Sachs wrote in a note, as it cut its operating profit forecasts by 7 percent for the current fiscal year ending in August 2014, by 7 percent for the following year and by 6 percent for the year after next.
The brokerage kept its "neutral" rating and a 12-month price target of 30,500 yen.
At 0021 GMT, Fast Retailing shares were down 4.5 percent at 33,000 yen, compared with a 1.1 percent rise in Tokyo's benchmark Nikkei average .N225.
Fast Retailing, the most heavily weighted share in the Nikkei, carried a 12-month forward price-to-earnings of 34.45 versus the Topix .TOPX average of 14, according to Thomson Reuters Datastream.
($1 = 98.0900 Japanese yen)
(Reporting by Dominic Lau; Editing by Edmund Klamann)
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