The operator of Japan’s high-street fashion giant Uniqlo on Thursday hiked its full-year net profit forecast, predicting record results despite an underwhelming performance in China.
Retail behemoth Fast Retailing said it was on course to make 365 billion yen (USD 2.26 billion) in the year to August, upgrading its previous estimate of 320 billion yen.
For the nine months to May it logged net profit of 312 billion yen, a rise of 30 per cent from a year earlier.
“Our performance was steered by substantial increases in revenues and profit of Uniqlo operations in North America, Europe, South East Asia and Japan,” Fast Retailing said.
Sales of summer products abroad were brisk everywhere including Taiwan, South Korea, India and North America, it added.
It said its low-cost GU clothing brand has been another key driver of the retail group’s expansion.
Despite this overall robust performance, the firm failed to emulate the same success in China, where its Uniqlo business faltered because of unseasonal weather and “insufficient marketing to inspire customer demand”.
The Mainland China market is a “growth pillar” for the company, said Pan Ning, chief executive officer of Uniqlo Greater China.
Despite Uniqlo becoming a household name in mainland China, many consumers still do not count it among their go-to brands, a Fast Retailing survey showed.
Chinese customers are growing more ‘discerning’ in their shopping post-pandemic, with younger generations more mindful of cost performance, Pan said.
“We are convinced that there is great potential to expand business by ensuring Uniqlo is recognised as a brand that is deeply sensitive to and strongly invested in customers’ everyday lives,” Pan said.
