* Keeps operating profit forecast unchanged at Y147.5 bln
* Q2 operating profit slips 7.6 pct to Y40 bln
* Uniqlo Japan sales surge not sign of consumer thaw
* Shares have doubled since Nov, now 10 pct weighting in
By Sophie Knight
TOKYO, April 11 Fast Retailing, Asia's
biggest apparel company, left its full-year operating profit
forecast unchanged despite a jump in sales in March at its
flagship Uniqlo stores in Japan, as doubts linger whether
aggressive economic policies will thaw a decades-long freeze in
Japanese consumer sentiment.
The company on Thursday kept its operating profit outlook
for the year ending in August at 147.5 billion yen ($1.48
billion), which would mark a record profit and a 17 percent
increase on the year.
It reported a 7.6 percent drop in operating profit for the
December-February quarter to 40 billion yen. Three analysts
surveyed by Thomson Reuters I/B/E/S had forecast a 46 billion
Analysts are expecting an operating profit of 149.9 billion
yen for the current financial year, according to Thomson Reuters
Starmine smart estimates, which give more weight to top-rated
Some analysts raised their full-year forecasts for the
company after last week's news of a 23 percent surge in Uniqlo's
Japan March sales, spurred in large part by a new brand of
heat-dispersing underwear - a warm-weather answer to its
hot-selling "Heattech" thermal underwear.
The March sales figures had sparked a 14 percent surge in
Fast Retailing shares on Wednesday of last week. The stock has
more than doubled since mid-November, outpacing a 56 percent
rise in Tokyo's benchmark Nikkei average, as
expectations mounted for bold new policies promised by the new
government of Prime Minister Shinzo Abe, swept to power in a
landslide election in December.
Fast Retailing, with a nearly 10 percent weighting in the
Nikkei due to its prominence in the retail sector, is also a
magnet for investor buying when Japan's stock market rallies.
But analysts widely doubted that Uniqlo's sales rise was
spurred by a broad improvement in consumer sentiment, even as
signs emerge that the wealth effect of rising share prices is
spurring purchases of more expensive items such as kimonos.
Economic data shows that Japanese wages declined 0.7 percent
in February while deflation persisted with a drop of 0.3 percent
in core prices. Fast Retailing said average spending per
customer fell by 5.4 percent in March despite the overall rise
Japan's dull economy has also spurred Fast Retailing, run by
Japan's richest man, Tadashi Yanai, to pursue ambitious
expansion abroad, especially in Asia. It has set a target to
boost its sales by five times to 5 trillion yen by 2020 and
overtake global leader Inditex S.A., operator of Zara,
as well as Hennes & Mauritz AB and Gap Inc.