Fast Retailing Co. (9983), the Japanese retailer that sells Uniqlo branded apparel, cut its forecast for annual profit amid a decline in domestic clothing sales.
The company projected earnings of 79 billion yen ($989 million) for the year ending August, lower than its previous forecast of 81.5 billion yen.
The casual clothing maker, led by billionaire President Tadashi Yanai, has expanded outside of Japan to cut its dependence on its home market. The company has been trying to revive its image in Japan, where same-store sales at its Uniqlo stores fell 7 percent in June.
Uniqlo’s Japan comparable-store sales fell 5.4 percent in the three months ended May as lower temperatures hurt demand for summer clothing, the company said.
For the third quarter ended May, the company’s earnings rose 26 percent to 14.7 billion yen from 11.7 billion yen a year earlier, according to Bloomberg calculations based on nine-month figures reported by Fast Retailing. That compares with a 14.2 billion yen average estimate for the third quarter from three analysts in a Bloomberg survey.
For August and July, Uniqlo domestic same-store sales are likely to be in line with a year earlier, Chief Financial Officer Takeshi Okazaki said at a press conference today. They are likely to be slightly lower for the fiscal year, he said.
The company has lowered its overseas Uniqlo sales forecast for the fiscal year by 3 billion yen to 157 billion yen as it faces more competition in the U.S., the CFO said. It expects the U.S. business to turn profitable next fiscal year or the year after.
Fast Retailing plans to open as many as 300 outlets every year mainly in Asia and have more than 2,000 outlets in Greater China and other Asian countries in the next 10 years, Yanai has said.
The Yamaguchi, western Japan-based company opened the world’s largest Uniqlo brand casual clothing store in Tokyo’s Ginza district earlier this year, is using English as an official language and hiring international staff.
The stock closed up 0.06 percent to 15,790 yen in Tokyo trading today. It is up 13 percent for the year compared with a 5.9 percent gain for the broader Topix index.
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