By Rocky Swift
TOKYO (Reuters) – The Japanese operator of global clothing heavyweight Uniqlo is expected to post a stronger quarterly profit on Thursday as its overseas units make up for slowing growth at home.
Fast Retailing’s operating profit in the three months through February likely rose 11% from a year earlier to 114.3 billion yen ($753.4 million), based on the average of five analyst estimates compiled by LSEG.
The increase builds the first quarter, when Fast Retailing posted a 25% jump in earnings on the back of strong results in China, its biggest foreign market.
The company conservatively left its forward guidance unchanged after those results, so second-quarter results may top consensus figures, according to LightStream Research analyst Oshadhi Kumarasiri.
“This optimism is fuelled by several factors, including the ongoing recovery of the Uniqlo business in China and South Korea, robust same-store sales performance across the Asia, India, and Oceania regions, and the impressive sales volume of apparel observed in the US in December 2023,” he wrote in a report on the Smartkarma platform.
The company founded and run by Tadashi Yanai has posted record results in the past two years and is projecting profits to climb again this year as it continues to aggressively grow overseas.
Yanai, Japan’s richest man, is scheduled to speak at Fast Retailing’s earnings briefing on Thursday.
With its 922 stores in mainland China, Fast Retailing is a bellwether for global retailers operating in the world’s second-biggest economy. Sales in the region have bounced back strongly in the past year from the doldrums of COVID-19 lockdowns.
The yen’s slide to a near 34-year low is also a tailwind for Fast Retailing, which gets more than half its revenue from outside Japan.
Fast Retailing’s shares are up 28% so far in 2024, compared with a 19% advance in the benchmark Nikkei index.
($1 = 151.7100 yen)
(Reporting by Rocky Swift; editing by Miral Fahmy)
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