Japan's Fast Retailing posts 14.8% YoY growth as Q1 revenue

The business profit rose sharply by 31 per cent to ¥205,647 million, supported by stronger gross margins and disciplined cost management. Operating profit increased 33.9 per cent to ¥210,914 million, while profit before income taxes climbed 15.3 per cent to ¥226,667 million.

The net profit for the period reached ¥158,513 million, up 13 per cent YoY, with profit attributable to owners of the parent rising 11.7 per cent to ¥147,445 million. Total comprehensive income surged 49.6 per cent to ¥345,651 million, aided by favourable currency movements. Basic earnings per share (EPS) rose to ¥480.55, Fast Retailing said in a press release.

The group’s gross profit margin expanded by 0.7 percentage points YoY to 55.2 per cent, while the selling, general and administrative expense ratio improved by 1.7 points to 35.2 per cent, reflecting stronger operating efficiency. Finance income net of costs totalled ¥15.7 billion, driven by net interest income and foreign exchange gains.

Region-wise, Mainland China recorded higher revenue and double-digit profit growth, supported by colder weather, effective marketing and a collaboration with JD.com that attracted new customers. Hong Kong posted gains on strong fall-winter sales, while Taiwan reported higher revenue but lower reported profit due to increased royalty expenses; excluding this factor, profits rose YoY.

South Korea, Southeast Asia, India and Australia all delivered double-digit growth in both revenue and profit, supported by strong sales of core winter products and new autumn collections. North America and Europe also achieved double-digit growth, aided by successful new store openings and increased brand visibility, particularly in major European cities.

Uniqlo Japan reported revenue growth of 12.2 per cent to ¥299 billion and a 20.2 per cent rise in business profit to ¥62.4 billion. Same-store sales, including e-commerce, increased 11 per cent YoY, driven by strong demand for autumn and winter products such as sweatshirts, jeans, Heattech innerwear and Pufftech, alongside robust Thank You Festival sales. While gross margin edged down due to higher procurement costs linked to yen weakness, improved sales efficiency reduced personnel and rental cost ratios.

Uniqlo International remained the group’s key growth engine, with revenue rising 20.3 per cent to ¥603.8 billion and business profit surging 38.0 per cent to ¥117.3 billion. The business profit margin improved by 2.4 percentage points, reflecting stronger gross margins and tighter expense control across regions.

GU recorded revenue of ¥91.3 billion, up 0.8 per cent YoY, while business profit increased 20.0 per cent to ¥11.4 billion. Although same-store sales edged slightly lower due to softer mass-fashion trends, profitability improved on better assortment focus, inventory efficiency and discount control.

The global brands segment reported revenue of ¥33 billion, down 7.6 per cent YoY, and business profit of ¥1.7 billion, down 14.8 per cent. Theory underperformed, particularly in the United States, while PLST delivered higher revenue and profit following improved product marketing. Ongoing restructuring at Comptoir des Cotonniers and Princesse tam.tam reduced store numbers but improved cost efficiency and narrowed losses.

Fast Retailing strengthened its LifeWear sustainability strategy during the quarter, raising its supply chain greenhouse gas reduction target to 30 per cent by fiscal 2030, from 20 per cent previously. Planned measures include reducing coal usage in the supply chain by around 90 per cent compared with fiscal 2019 levels and converting more than 70 per cent of energy consumption to renewable sources, added the release.

ALCHEMPro News Desk (SG)