Fast Retailing profits for the first half of fiscal 2017 soared on foreign exchange gains. The company reported a 106.7% year-on-year jump in profits to 15.4 billion yen ($141.1 million) for the first half, ended February 2017.
Revenue increased 0.6% to 1 trillion yen ($9.3 billion) compared to the same period during the previous year.
Same stores sales for Uniqlo Japan were practically flat with a 0.1% increase. E-commerce was up by 11.7% and represented 6.2% of total sales. The company plans to capitalize on the online sales trend with more online exclusives and buy online, pickup in store capabilities. Weak sales in December were bookended by boosts in November during the company’s anniversary sale and early 2017, owing to new spring introductions. Fewer markdowns and cost-cutting efforts pushed gross profit margin up by 2.1 points.
Internationally Uniqlo revenue was hampered by a stronger yen as well as weakness in the U.S. market. Revenue ticked up 0.9% to 392.8 billion yen ($3.6 billion) and operating profit expanded 65.9% to 48.7 billion yen ($445.9 million). On the positive side, Mainland China and Southeast Asia performed well. An assortment designed to cater to local tastes and greater marketing efforts helped catapult Southeast Asian sales.
Weak sales in the company’s Global Brands unit resulted in promotions which negatively affected profit margin. Revenue increased by 0.5%, while operating profit plummeted by 29.7%.
The company held to its 2017 guidance, which predicts a 3.6% increase in revenue and a 108.1% jump in profits. The company expects a same store sale increase at Uniqlo Japan of 1.8%. Internationally, Fast Retailing expects China and Southeast Asia to continue to drive the Uniqlo business to strong profits. Global Brands is expected to contract for the full year.
The company’s financial report follows recent news that Fast Retailing is focused on delivering its fast fashion merchandise at an even more rapid speed. It has developed a centralized design and distribution hub to help trim development and delivery times to 13 days. The goal is to propel revenue to 3 trillion yen ($26 billion) by August 2021.