Uniqlo operator Fast Retailing posts record net profit

The operator of Japanese casualwear giant Uniqlo reported a record annual net profit on Thursday and predicted an even better performance this year as pandemic-related restrictions ease further worldwide.

Fast Retailing said business had “recovered markedly” as infections were contained around the world, including a sharp recovery in sales in Europe and North America after virus lockdowns were lifted.

In the 12 months to August 2021, the firm posted a better-than-expected net profit of 169.8 billion yen (US$1.5 billion), up 88% on-year.

A surge in demand for casual clothing and cost-cutting fuelled the bumper results, with sales up 6.2% to 2.13 trillion yen, the company said.

Recovery of demand in key overseas markets across Asia, North America and Europe should compensate for expected falls in domestic Uniqlo operations in the current financial year, the company said.

“In the second half, we expect restrictions to ease and normal business operations to resume,” chief financial officer Takeshi Okazaki said at a press conference.

“Therefore we forecast increasing sales and a significant increase in profit.”

The firm predicted net profit of 175 billion yen for the current year to August 2022 on expected annual sales of 2.2 trillion yen.

However, the firm’s mainstay Uniqlo operations in Japan are expected to experience a drop from the strong demand seen a year ago, when loungewear and other “stay-home” items were snapped up en masse, he added.

“There was also a high demand for masks. Those factors are expected to disappear during this fiscal year,” Okazaki said.

Going forward, chief executive officer Tadashi Yanai said the company would put renewed focus on building stores near residential areas, in addition to urban shopping districts.

He voiced concerns about rising raw-material prices, the ongoing pandemic and on-and-off local lockdowns in some countries.

“For (the past) year, I believe everyone in the company worked hard in this difficult environment,” Yanai said.

“But the coronavirus pandemic has not ended. We just cannot tell what will happen when.”