TOKYO Oct 10 Fast Retailing Co Ltd,
Asia's biggest retailer, posted record revenue and operating
profit in its last financial year but fell slightly short of its
profit target as heavy discounting depressed margins at its
flagship Uniqlo casual clothing stores.
Fast Retailing, which competes with Zara-owner Inditex S.A.
and Hennes & Mauritz AB (H&M), posted a 5.1
percent increase in operating profit to 132.92 billion yen
($1.37 billion) for the year ended on Aug. 31, below its
guidance of 143.50 billion yen.
It was also below expectations of 144.4 billion yen, the
average of 21 analysts' estimates according to Thomson Reuters
The company posted strong sales at Uniqlo, which accounts
for the bulk of its business, as seasonal lines such as its
breathable innerwear, Airism, and mid-length pants sold well
through the hottest summer ever recorded in Japan.
Profit margins at Uniqlo, known for its casual clothing
ranges, were depressed by discounting as it moved to boost
customer traffic, but in the current financial year the company
plans to lure consumers upmarket into higher-margin items such
as cashmere sweaters.
Fast Retailing, which also owns brands Theory, Helmut Lang
and cut-price clothing chain gu, forecast a 17.4 percent
increase in operating profit in the current financial year while
sales were seen increasing 16.4 percent to 1.33 trillion yen,
slowing from last year's 23.1 percent rate of revenue growth.
Fast Retailing's shares, the most heavily weighted in
Japan's benchmark Nikkei average, fell 0.6 percent on
Thursday to end at 34,550 yen, compared with the Nikkei's 1.1
percent rise. The stock has gained 58 percent this year, helping
the benchmark rise 37 percent since January.
($1 = 97.1950 Japanese yen)
(Reporting by Sophie Knight)