Uniqlo and GU shine for Fast Retailing but Theory, PLST, Comptoir des Cotonniers lag

Fast Retailing Co had a generally good 2024 year and is aiming for higher sales in the next 12 months after its expansion into new markets boosted it despite a slowdown in China.

It expects operating profit for the year to the end of next August to be ¥530 billion (€3.24bn/£2.72bn/$3.55bn), up from ¥500 billion this time and also above analysts’ estimates.

The news came after its annual sales report showed it with stronger-than-expected fourth-quarter results, helped by demand for summer clothing. 

Operating income in Q4 was ¥99.1 billion and net income was ¥59.16 billion, both ahead of expectations.

Looking at the full year, revenue rose 12.2% to ¥3.1 trillion and operating profit was up 31.4% at ¥500.9 billion.

For Uniqlo Japan revenue rose 4.7% to reach ¥932.2 billion and operating profit rose 32.2% to ¥155.8 billion. Same-store sales increased 3.2% year-on-year on the back of a particularly strong 11.7% expansion in the second half. Sales of core summer items proved strong and revenue from overseas visitors also rose sharply. The full-year gross profit margin improved by 2.9 points thanks to stronger control over production orders.

At Uniqlo International, annual revenue rose 19.1% to ¥1.7 trillion and operating profit was up 24.9% at ¥283.4 billion with the unit achieving a record performance. Greater China reported a year-on-year rise in full-year revenue and a slight increase in operating profit. While the Mainland China market reported strong sales in the first half, second-half sales were “lacklustre”.

South Korea, Southeast Asia, India & Australia, as well as North America and Europe all made gains during the year.

Over at the GU brand, revenue rose only 8.1% to ¥319.1 billion, but operating profit was up nearly 29% at ¥33.7 billion. Same-store sales were strong as the company tapped into global mass fashion trends and it opened its first GU flagship store outside Japan in the US in September. Revenue has surpassed its expectations since the opening and the store is performing strongly.

But at its Global Brands, full-year revenue was down and the company said that business profit contracted sharply. 

The revenue figure dropped 2% to ¥138.8 billion and business profit plummeted 76.2% to ¥0.1 billion. That said operating profit was ¥0.6 billion compared to a ¥3 billion loss in the previous year, although the benefit there was linked to impairment losses recorded on the closure of unprofitable stores in FY23.

Its individual brands within this unit saw varied performances. Theory reported higher revenue but a large contraction in profits. In local currency terms, Theory revenue declined on lacklustre sales performances in both the US and Asia.

PLST reported significantly lower revenue due to a reduced store network yet the gross profit margin improved significantly, and operating profit moved into the black.

And while Comptoir des Cotonniers reported significantly lower revenue, its losses shrank as operational reforms improved overall cost structures.