The parent of Uniqlo posted net profit of 68.83 billion yen (about $577.1 million) up from 42 million yen in the year-ago period. Net sales also jumped, rising 23% to 479.54 billion yen.
Fast Retailing is expected to benefit further from the fall in the yen. Each 1-yen drop in the Japanese currency against the dollar should results in increasing profits by about 1 billion yen, Fast Retailing Chief Financial Officer Takeshi Okazaki told analysts in a conference today.
At Uniqlo, sales increased 47.3 percent outside of Japan due to the increasing strength of the Chinese and South Korean markets. In Japan, sales rose 11.6 percent, but Uniqlo’s Japan sales actually fell below 50 percent for the first time. While a weaker yen increases the value of profits earned overseas, it also raises operating and production costs for Fast Retailing’s domestic business.
“Rapid falls in the yen pressure initial costs,” Okazaki said. “We will do our best not to raise prices because customers are highly price-sensitive, but we may need to do so gradually.”
Looking ahead, Fast Retailing reiterated its projections for the current business year ending in August. It expects revenue to rise 16 percent to 1.6 trillion yen as net profit increases 34 percent to 100 billion yen.
Last October, Tadashi Yanai, Fast Retailing’s CEO (and Japan’s richest man) said he expected net profit to rise 34 percent to 100 billion yen for the year ending August 2015, thanks for the quickening expansion of Uniqlo internationally. The results mark a dramatic turnaround from the profit slump last year caused by the write down of its J Brand premium denim unit.