TOKYO (Reuters) -The Uniqlo profit surge is expected to surpass forecasts for a third consecutive year as the brand expands in Western markets and recovers in China. #UniqloProfitSurge
Fast Retailing’s operating profit is estimated to have risen 24% over the past 12 months. Analysts expect profits to reach 478.3 billion yen. These projections are based on estimates from 15 analysts ahead of the earnings report.
That’s marginally higher than the company’s 475 billion yen forecast, which it lifted in July citing a strong performance in the second half.
Fast Retailing’s shares reached a record high this week. Key factors for future growth include sales of fall and winter items in Japan. Additionally, the company’s ability to reinvigorate its business in China will be crucial.
“Investor attention will turn to whether Fast Retailing’s measures in Greater China successfully reverse the earnings decline caused by weak consumer sentiment and increased competition,” Chadwick wrote on the Smartkarma platform.
Fast Retailing operates over 900 stores in China and is seen as a bellwether for the retail sector. COVID restrictions impacted its results for years. Currently, a sluggish economy poses challenges and affects consumer confidence.
Greater China CEO Pan Ning acknowledged the market is maturing and noted a need to scale back store openings. The company plans to adopt a scrap-and-build strategy for underperforming locations.
When COVID lockdowns depressed sales in China, the company focused more on expansions in North America and Europe. Both sectors delivered strong sales and profits through the first nine months of fiscal 2024.
Company founder Tadashi Yanai aims to make Fast Retailing the world’s biggest fashion retailer, with the operators of Zara and H&M standing in the way. He believes consumers are more focused on value than luxury in a post-COVID world, a trend that works in Uniqlo’s favour. #UniqloProfitSurge
Uniqlo Profit Surge Driven by Global Market Expansion
The Uniqlo profit surge highlights the brand’s successful strategy of tailoring products to different markets. By offering a wide range of affordable, high-quality clothing, Uniqlo continues to attract customers worldwide. As a result, the company has seen sustained profitability and a growing customer base.
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