Group behind Uniqlo posts record profits of $2.5 billion

Fast Retailing, the Japanese conglomerate that owns Uniqlo, announced outstanding financial results for the fiscal year ending August 2023. The company reported a remarkable 28 percent increase in its operating profit, achieving a second consecutive record, thanks to a robust post-pandemic recovery in China and the devaluation of the Japanese yen. Fast Retailing's profit for the 12 months through August rose to an impressive 381.1 billion yen, or about $2.56 billion. This figure surpassed the previous fiscal year's record of 297.3 billion yen. Moreover, the results even exceeded analysts' expectations, with the consensus estimate at 374.6 billion yen. Fast Retailing's initial outlook of 370 billion yen was also exceeded, demonstrating the company's strong financial performance - leading the group to forecast an operating profit of 450 billion yen for the next fiscal year. This forecast follows Fast Retailing's record third-quarter results in July, in which it raised its annual forecast following the continued recovery of its operations in post-pandemic China.

With 930 Uniqlo stores in mainland China, Fast Retailing is a significant player in the world's second largest economy and a reliable indicator of its retail market. During the strict restrictions related to COVID-19, the company strategically veered toward North America and Europe, actively expanding its presence. The company's founder, Tadashi Yanai, Japan's richest man, saw his family's net worth increase to about $34 billion, following the yen's devaluation of about 12 percent against the U.S. dollar during the year. This devaluation amplified the value of Fast Retailing's overseas sales, contributing to its outstanding financial performance. Fast Retailing's net profit for the fiscal year ended August reached a new record of 296.23 billion yen, equivalent to $1.99 billion, marking an increase of 8.4 percent. Looking ahead, the company expects its net profit to increase 4.6 percent to 310.00 billion yen in the current fiscal year, driven by increased profits in several business lines. In addition, the company expects revenue to increase 10 percent to 3.050 trillion yen. The company's fourth-quarter net profit of 57.71 billion yen exceeded the 25.07 billion yen estimate in a survey conducted by FactSet analysts. Annual sales increased significantly by 20 percent to 2.767 trillion yen. Certainly some credit also goes to TikTok, whose algorithmic power made the brand's shoulder bags the most worn accessory of the season.