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Uniqlo Parent Fast Retailing Posts 23% Revenue Gain in Q3

Rivet's 2020 Denim Circularity report takes a deep dive into how the global denim industry is plotting its circular future amidst a worldwide pandemic.

Fast Retailing, owner of the Uniqlo, GU and Theory brands, to name a few, reported that consolidated revenue for the three months ended May 2015 increased 23.1% to 398.4 billion yen ($3.28 billion).

Gross margin increased by 20 percent to 206.9 billion yen ($1.7 billion), but shrank from 52.9% to 51.9% of revenues due to exchange rate volatility. SG&A expense grew by 19.7% to 166.4 billion yen ($1.37 billion), while net profit gained 36.2% to 27.6 billion yen ($230 million).

By operating group, revenue for Uniqlo Japan grew by 12 percent to 183.6 billion yen ($1.51 billion). Same-store sales were up 9.9% due to successful Spring/Summer merchandise collections.

Uniqlo International revenues increased 42.5% to 136.3 billion yen ($1.12 billion). Greater China (Mainland China, Hong Kong and Taiwan) and South Korea reported continued strong performance, with increases in revenue and profit beating estimates. However, sales and operating profit at Uniqlo USA both fell short of target in the third quarter, swelling that operation’s overall loss and driving down the operating margin for the division, as did the writedown of fixed assets linked to the refurbishment of global flagship stores in the UK and China.

Global Brands, which include casual sportswear brand GU, Princesse Tam Tam, Theory and Comptoir des Cotonniers, increased by a higher-than-expected 22.3% to 77.7 billion yen ($640 million). GU outperformed expectations to report significant gains in revenue and profit and double-digit same-store sales increase. Theory, on the other hand, fell short of target and reported a decline in profits. J Brand reported continuing losses, despite a rise in revenue.

In the nine months ended May 2015, The Fast Retailing Group’s revenue increased 23.9% year-on-year to 1.3481 trillion yen ($11.09 billion), and operating profit increased 35.5% to 189.2 billion yen ($1.56 billion). All three key business segments reported increases in both revenue and profit, with Uniqlo International reporting especially strong gains in both, with a net profit increase of 51.5% to 132.3 billion yen ($1 billion) helped by the depreciation of the Japanese yen over the period, generating net finance income of 21.0 billion yen ($170 million).

For fiscal 2015, Fast Retailing expects consolidated revenue to increase 19.3% year-on-year to 1.65 trillion yen ($13.58 billion). It also expects operating profit to grow by 53.4% to 200 billion yen ($1.65 billion), and a net profit increase of 61 percent to 120 billion yen ($1 billion), or 1,177.41 yen ($9.69) per share. The company plans to deliver a total annual dividend of 350 yen ($2.88) per share in fiscal 2015.

Fast Retailing expects its global store network to expand by 229 to 2,982 stores by the end of August 2015. That figure includes 840 Uniqlo Japan direct-run and franchise stores, a decrease of 12 compared to August 2014, 801 Uniqlo International stores, up 168 from last year, and 1,341 Global Brands stores, a 73 store increase over the prior year. The company operates 40 Uniqlo stores in the U.S.

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