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Uniqlo Owner Fast Retailing Cuts Full-Year Outlook

For the full year through August, the retail group forecast an operating profit 10 billion yen below its previous estimate.
Uniqlo store in Osaka, Japan | Source: Shutterstock
By
  • Reuters

TOKYO, Japan — Uniqlo owner Fast Retailing Co. lowered its full-year outlook, hurt by heavy discounts on winter clothes after a warm winter and losses stemming from its weak overseas brands, even as it turned in a better-than-expected second-quarter profit.

For the full year through August, it forecast an operating profit of 260 billion yen ($2.34 billion), versus its previous estimate of 270 billion yen.

The retailer, however, reported a rise in its operating profit for the second quarter to 68 billion yen, from 57 billion yen a year earlier, on growth in China and its online business.

That beat an average estimate of 64 billion from six analysts polled by Refinitiv.

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Operating profit for Uniqlo's China business has been growing by double digits in recent quarters despite concerns of a slowing economy. The company expanded to 633 locations in China in the last fiscal year, up 78 stores from a year earlier, while in Japan it went down 4 stores to 827.

Uniqlo has found it tough to cope with unexpected weather patterns in the past few years. After struggling with a shortage of popular winter items in the past, the Japanese company last winter overcompensated by ordering too much inventory.

Fast Retailing posted a surprise drop in profit in the first quarter as unseasonably warm weather hit sales of winter clothes.

By Ritsuko Ando; editor: Himani Sarkar.

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