Fast Retailing Delivers H1 Robust Results: Uniqlo Thrives Internationally, GU Maintains Growth

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Fashnopsis:

• Uniqlo Shines Globally: International business surged 17% to 883.9 billion yen, driven by growth in Europe and North America.
• GU Maintains Momentum: GU continued its success with a 9.6% sales increase to 159.5 billion yen.
• Profits Jump: Fueled by strong performances, operating profit rose 16.7% and net profit climbed by 27.7%.
• Optimistic Outlook: Resilient profit forecast, despite sales target revision.

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Fast Retailing Soars on International Uniqlo Strength, GU Growth

Fast Retailing, the parent company of global apparel giant Uniqlo, reported a strong first half for fiscal year 2024 (ending February 29th). While there were some challenges in the domestic market, the company’s overall performance was boosted by impressive international growth for Uniqlo and continued momentum for its GU brand.

Uniqlo’s International Expansion Pays Off

The star of the show was Uniqlo’s international business, which delivered a sizzling 17% increase in sales to a staggering 883.9 billion yen (approximately $5.7 billion). This growth was particularly significant in Europe and North America, highlighting the success of Fast Retailing’s international expansion strategy.

Uniqlo Japan Faces Headwinds

However, Uniqlo’s domestic market in Japan faced some headwinds, experiencing a slight 2% decline in sales to 485.1 billion yen (approximately $3.1 billion). The company attributed this dip to an “insufficient level of products” adapted to a warmer-than-usual winter and communication gaps regarding product offerings.

GU Maintains Growth Trajectory

Fast Retailing’s second major brand, GU, remained a bright spot with a healthy 9.6% half-year sales increase to 159.5 billion yen (approximately $1.0 billion). GU’s consistent growth demonstrates its potential as a reliable engine for the company’s future.

Profits Surge on Positive Performance

Fueled by the international success of Uniqlo and GU’s continued rise, Fast Retailing’s operating profit jumped a significant 16.7% to 257.1 billion yen. Net profit also showed impressive growth, climbing 27.7% to a strong 195.9 billion yen (approximately $1.2 billion).

Adjusted Forecasts Reflect Optimism

Based on these positive results, Fast Retailing cautiously adjusted its full-year forecasts. The sales target was slightly lowered to 3.03 trillion yen(approximately $19.7 billion), but this still translates to a projected 9.5% year-over-year growth. The company remains optimistic about earnings, raising its profit forecast to 320 billion yen, indicating an 8% increase.

Fast Retailing prioritizes five key areas in the H2 of 2024 to solidify a more diverse foundation for the company’s earnings.

• Global Products & Branding: Develop products and strengthen the Uniqlo brand image worldwide.
• Strategic Store Expansion: Open new high-quality stores in targeted locations.
• Data-Driven Inventory: Manage inventory and offerings based on individual store needs.
• Uniqlo Expertise for All Brands: Leverage Uniqlo’s success to improve other brands.
• Global Management Structure: Implement a cohesive management framework for global operations.

Fast Retailing H1 FY’24 Results Summary:

Brand	Revenue Change	Operating Profit (Change YoY)	Key Points
Consolidated	1.5989 trillion yen (+9.0%)	257.0 billion yen (+16.7%)	Strong performance from UNIQLO International & GU
UNIQLO Japan	485.1 billion yen (-2.0%)	77.2 billion yen (+14.7%)	Improved gross profit margin, revenue dip due to warm weather & communication gaps
UNIQLO International	883.9 billion yen (+17.0%)	150.9 billion yen (+23.0%)	Significant growth in North America, Europe, Southeast Asia & India
GU	159.5 billion yen (+9.6%)	15.3 billion yen (+17.5%)	Strong sales of trendy products
Greater China	Revenue Increase	Flat Operating Profit	Warm weather & consumer slowdown impacted profit
South Korea	Revenue & Profit Increase	Continued growth

Image credits: Fastretailing