Fast Retailing reported third-quarter results on Thursday, lifting its full-year profit guidance for the third consecutive quarter as sales at Uniqlo locations across all major regions climbed.
Operating profit for the fiscal third quarter, covering the three months through May 31, climbed to 213.79 billion yen, a gain of nearly 46% compared with the same period a year ago. Net profit jumped 39% from a year earlier to 146.7 billion yen, on revenue of 1.01 trillion yen, up 22%. The net profit figure cleared the 118.9 billion yen consensus among analysts polled by data provider Visible Alpha, as reported by The Wall Street Journal. On the operating profit line, the 177.73 billion yen average drawn from seven analyst estimates tracked by LSEG was also comfortably surpassed, per Reuters.
For the full fiscal year ending August, Fast Retailing now expects revenue of 3.97 trillion yen, up 16.7% from a year earlier, and net profit of 500 billion yen, up 15.5%. The company revised both figures upward — by 70 billion yen for revenue and 20 billion yen for net profit — compared with guidance issued in April, the company said.
Expansion in the United States stood out as a meaningful contributor to quarterly growth, with recently opened stores in New York, Chicago, and Boston cited by the company as boosting American sales, helping push revenue and profit gains in the region into double-digit territory. Europe also posted double-digit gains. Fast Retailing has set a target of 1 trillion yen in Uniqlo revenue for each of its North American and European operations within roughly five years, according to The Wall Street Journal.
In Mainland China, shuttering unprofitable locations helped lift profit margins, and the segment recorded both revenue growth and double-digit profit gains during the quarter, the company said.
Despite the strong results, Fast Retailing flagged two headwinds. The currency's slide to levels last seen roughly four decades ago is bearing down on the company's cost base, Chief Financial Officer Takeshi Okazaki said. "A sustained downward trend has recently emerged, and I must frankly admit that the situation is becoming increasingly difficult," Okazaki said. In response to those currency-driven cost pressures, select fall and winter merchandise sold in Japan will be repriced upward by around 4%, the company said. Fast Retailing also expects Japan sales and profit to dip in the fourth quarter, the company said.
Extreme heat across Europe also weighed on the quarter, with Okazaki noting that temporary store closures and a pullback in shopper activity had held back what regional sales might otherwise have been.
For the nine months through May, consolidated revenue totaled 3.07 trillion yen, up 17.1% year over year, and business profit rose 33.6% to 592.7 billion yen, the company said.