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Fast Retailing predicts annual profit decline of 50% due to Covid-19 | News and analysis

Tokyo, Japan – Fast Retailing Co. in Japan, owner of casual wear brand Uniqlo, the earnings outlook for the year to August decreased when the global pandemic wreaked havoc on its global fashion company.

It now expects an annual operating profit of 130 billion yen ($ 1.21 billion), a 50 percent decrease, previously a previously expected decline of 44 percent, following an operating loss of 4 billion yen in March-May.

But the company also reported a strong recovery in Uniqlo’s domestic sales in the same store for June, saying things in China were recovering faster than expected, suggesting it can weather the crisis better than many global competitors.

Uniqlo’s domestic sales in the same store, including online purchases, rose 26 percent in June from a year earlier, after falling 57 percent in April and 18 percent in May.

The company said it saw a “faster than predicted recovery rate” for Uniqlo in Japan and China, saying it would continue to open more Uniqlo stores around the world.

Fast Retailing has become dependent on Asian economies, especially China, where Uniqlo’s mix of affordable basics and occasionally trendy items has been a huge hit among the fast-growing middle class.

Most stores in China and Japan reopened after the corona virus closed.

Analysts say Fast Retailing’s focus on Asia and the inability to make progress in the United States, which has reported the highest number of coronavirus infections in the world, can help protect the company from the worst global pandemic.

By Ritsuko Ando; editor: Himani Sarka