TOKYO: The Japanese operator of Uniqlo on Thursday (Apr 10) said earnings soared 33 per cent in its second quarter and raised its full-year forecast even after accounting for the impact of US tariffs on its global clothing enterprise.
Fast Retailing said operating profit was ¥146.7 billion (US$999.9 million) for the three months through February. That compared with ¥110.4 billion for the same period a year prior and the ¥125.9 billion average of six analyst estimates compiled by LSEG.
The company raised its full-year operating profit forecast to ¥545 billion from a previous guidance of ¥530 billion.
Fast Retailing cited strong sales both at home in Japan and in its international segments in the first half, minimising the impact of contracting revenue and profit in mainland China.
Profit in North America will likely decline in the second half due to the tariffs but the impact will be limited as a substantial amount of goods has already reached the United States, Fast Retailing said in a statement.
From one store 40 years ago in Hiroshima, western Japan, Uniqlo has grown to more than 2,500 locations worldwide, selling inexpensive fleeces and cotton shirts made primarily in China and other Asian manufacturing hubs.
That business model now stands at odds with sweeping tariffs that were announced and then delayed by US President Donald Trump, whipsawing global markets and prompting retaliation from trading partners.
Trump last week announced massive tariffs on dozens of countries, including a 24 per cent duty on non-automobile products from Japan. He backtracked on Wednesday, pausing the measures for 90 days, but kept pressure on China by raising tariffs on that nation’s goods to 125 per cent from 104 per cent.
Fast Retailing has in recent years looked to North America and Europe for growth due to a slowing economy in China, its largest overseas consumer market with more than 900 Uniqlo stores on the mainland.
The majority of Uniqlo products sold in the United States are produced in Southeast Asia.
Founder Tadashi Yanai, Japan’s richest man, has long been an advocate of free trade and has defended the company’s business with China amid criticism of human rights abuses on the mainland.
