Fast Retailing posts 47% profit drop as intensified competition takes toll

Fast Retailing Co., a casual-clothing retailer known for its Uniqlo brand, said Thursday its parent-only net profit for the 2001 business year plummeted 46.8 percent from a year earlier to 31.52 billion yen.

Fast Retailing saw its unconsolidated pretax earnings fall 46.9 percent to 54.77 billion yen on sales of 341.64 billion yen, down 18.4 percent.

The firm had posted sharp rises of more than 70 percent in pretax and net profits the year before. Its business year runs through Aug. 31.

The retailer, based in Yamaguchi, described the fall as a consumer “reaction to the Uniqlo boom.”

It also attributed the earnings decline to a “failure to launch new products having fresh tastes” combined with intensified competition among apparel firms that have jumped on the bandwagon and started offering high-quality casual wear at reasonable prices.

The company will pay a per-share dividend of 90 yen for 2001, down from 120 yen the previous year.

Fast Retailing split its shares at a ratio of 2-to-1 in April. Of the 90 yen annual dividend payment, 70 yen covered the fiscal first half to the end of February before the stock split, while the remainder is planned as the yearend dividend.

On a group basis, Fast Retailing posted a net profit of 27.85 billion yen and a pretax profit of 51.11 billion yen on sales of 344.17 billion yen.

There were no corresponding data for group earning results in the previous year as the company introduced the consolidated accounting method in the just-ended year.

Looking ahead, it forecast a group net profit of 20.2 billion yen for the year through Aug. 31, 2003, down 27.5 percent from a year earlier, and a pretax profit of 38.2 billion yen, down 25.3 percent, on a 10.1 percent decline in sales to 309.5 billion yen.