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Fast Retailing reports 22.9 percent increase in H1 profit

By Prachi Singh

Apr. 8, 2021

The Fast Retailing Group reported a decline in revenue but a large jump in profits in the first half of fiscal 2021 with consolidated revenue totalling 1.2028 trillion yen, down 0.5 percent and operating profit rising to 167.9 billion yen, up 22.9 percent. The company said in a release that rise in profit can be attributed primarily to large increases in profit from Uniqlo Japan and Greater China including Mainland China market, Hong Kong market, and Taiwan. Uniqlo Japan’s March same-store sales including online sales increased by 40.2 percent, while total sales including online sales increased by 41.5 percent.

On the other hand, due to severe impact of Covid-19, Uniqlo South Asia, Southeast Asia & Oceania (Southeast Asia, Australia, and India), Uniqlo North America, Uniqlo Europe regions and the company’s Global Brands segment reported considerable declines in both revenue and profit. The first-half consolidated gross profit margin improved by 2.2 points to 49.9 percent, while first-half pre-tax profit rose to 171.4 billion yen, up 13.7 percent and profit attributable to owners of the parent rose to 105.8 billion yen, up 5.4 percent.

Highlights of results of Uniqlo Japan and Uniqlo International

Uniqlo Japan revenue expanded to 492.5 billion yen, up 6.2 percent and operating profit rose to 97.8 billion yen, up 36.6 percent, while first half same-store sales increased by 5.6 percent due to strong sales of products such as loungewear and Heattech blankets as well as buoyant sales of core fall winter items along with ultra stretch active jogger pants and other items in the sport utility wear range.

The company’s online sales rose to 73.8 billion yen, up 40.5 percent in the first half. Uniqlo Japan’s first-half gross profit margin improved by 2.9 points to 50.7 percent.

Revenues at Uniqlo International dropped to 521.8 billion yen, down 3.6 percent and operating profit rose to 67 billion yen, up 25.9 percent. Uniqlo Europe and North America saw sales struggle in the face of severe Covid-19 conditions, but performance in East Asia was broadly strong. The Greater China region reported large rises in both revenue and profit as the Mainland China market along with the Taiwan market and the Hong Kong market witnessed further improvements in profits. Uniqlo Greater China’s gross profit margin improved by 4.7 points, while the South Korean operation posted a slight operating profit compared to an operating loss in the previous year.

Uniqlo South East Asia & Oceania reported sharp declines in both revenue and profit as the operation was adversely impacted by temporary store closures and restrictions on movement caused by Covid-19. However, Vietnam reported ongoing strong sales and a large rise in profits. Uniqlo USA reported a large decline in revenue and a larger operating loss, and Uniqlo Europe also reported large declines in both revenue and profit in the first half. However, Russia achieved double-digit growth in same-store sales and a large rise in operating profit as stores were not required to close temporarily in that market and sales of winter items proved strong.

GU business posts marginal rise in sales and profit

The GU business segment achieved a steady year-on-year performance in the first half, with revenue totalling 132.6 billion yen, up 0.3 percent and operating profit standing at 15.8 billion yen, up 0.4 percent. The company added that first-half same-store sales held steady due to strong sales of the sweat-style knitwear, double-faced sweatshirts, and loungewear and other items that satisfied customer demand for stay-at-home clothing.

Global Brands revenue declined to 54.5 billion yen, down 22.2 percent and the segment generated an operating loss of 8.1 billion yen compared to a 0.7 billion yen profit recorded in the first half of fiscal 2020. Theory fashion label reported large declines in both revenue and profit as performance worsened in the United States and Japan in the face of Covid-19, while Japan-based PLST brand reported a large decline in revenue and a slight operating loss following a reduction in customer visits primarily in urban areas. France-based Comptoir des Cotonniers brand reported a large decline in revenue and a wider operating loss on the back of temporary store closures.

Image: Uniqlo website