3 Min Read
* Tops 31.6 pct yr/yr same-store sales growth in September
* Strong sales fuel expectations for outlook upgrade-analyst
* Heattech undergarments, other winter items lift sales
* Shares end flat before announcement (Adds analyst comment, background)
By Taiga Uranaka
TOKYO, Nov 2 (Reuters) - Sales at Fast Retailing's (9983.T) Uniqlo casual-clothing chain in Japan surged 35.7 percent in October from a year earlier, the biggest jump in over eight years, as consumers snapped up jackets and other winter items.
The dizzying result follows a 31.6 percent leap in September same-store sales that sent the company's shares soaring, and the hefty gains in the first two months of its financial year have already begun fuelling expectations for an outlook hike.
Fast Retailing has been one of the few winners in a prolonged retail slump in Japan that has seen other firms like department stores and supermarkets post sharp falls in profits or sink into the red.
Globally, other budget fashion chains like Spanish retailer Inditex's (ITX.MC) Zara and Sweden's H&M (HMb.ST) are also weathering the economic downturn better than higher-priced rivals, but Uniqlo has seen even bigger sales growth than these peers.
"This is a very amazing increase," said Miho Asaba, a retail analyst at Tokai Tokyo Research Center.
"Given its strong first quarter a year ago, the company seems to have made a conservative forecast, but the strong start so far gives us hopes for an upgrade," she said.
The company, which forecast 10.5 percent growth in operating profit for the year ending in August, has said it expects 3 percent growth in same-store sales for the period.
Fast Retailing said on Monday the onset of cooler weather helped spur sales of its "Heattech" undergarments made of heat-trapping fabric as well as fleece and down jackets. Uniqlo runs about 770 stores in Japan and some 90 overseas.
The company's seemingly unstoppable growth contrasts sharply with that of a host of supermarkets, department stores and other retail chains, which have been hit hard by weak consumer spending. Japanese retail sales fell for a 13th straight month in September. [ID:nT313616]
The success of Uniqlo's products, such as its Heattech line, has prompted rivals to release similar items, but analysts said it may take a while for them to catch up.
"If it's only price that matters, supermarkets are rolling out cheap ones, but Uniqlo has more attractive merchandise," Tokai Tokyo's Asaba said.
Shares of Fast Retailing gained as much as 36 percent after releasing its September sales results last month. They have retreated a bit since then and ended flat at 15,120 yen on Monday before the latest announcement. (Reporting by Taiga Uranaka; Editing by Chris Gallagher)