TOKYO — Uniqlo’s corporate parent Fast Retailing Co., Ltd. said Thursday that its first-quarter net income grew at a double-digit pace but it cut its full-year forecasts on Uniqlo’s weak performance in Japan.
The company said net profit for the three months ended Nov. 30 rose 37.2 percent to 31.1 billion yen, or $403.99 million at average exchange rates for the period. The increase came mainly because Fast Retailing booked extraordinary losses in the first quarter of the previous year, linked to changes in accounting practices.
Operating income slipped 2.8 percent compared with the same period last year, coming in at 48.4 billion yen, or $628.72 million. While Uniqlo’s profitability in Japan declined on rising cotton and material prices as well rising costs in China, margins improved for the growing international business.
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Sales for the quarter rose 8.6 percent to 272.6 billion yen, or $3.54 billion.
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In terms of its business segments, the company said income at Uniqlo Japan contracted 10.3 percent year-on-year in the first quarter, while Uniqlo International’s operating profit rose 13.3 percent and its Global Brands division, including Theory and Comptoir des Cotonniers, rose 35.2 percent.
Citing the weakness at Uniqlo Japan, Fast Retailing cut its full-year guidance. The company now expects net profit to rise 28.8 percent to 70 billion yen, or $910.06 million; its previous forecast was for 71 billion yen, or $923.06 million.
Fast Retailing said operating income should grow 12.1 percent to 130.5 billion yen, or $1.7 billion, compared to a previous outlook of 135.5 billion yen, or $1.76 billion. Fast Retailing now predicts sales to advance 14.2 percent to 937 billion yen, or $12.18 billion. An earlier forecast saw sales coming in at 965 billion yen, or $12.55 billion.