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Fast Retailing raises annual profit forecast as yen weakens

Bloomberg

Fast Retailing Co. has raised its forecast for annual profit as the seller of Uniqlo-branded apparel benefits from a weakening yen.

Net income will probably be ¥91.5 billion for the year ending in August, higher than its previous forecast of ¥87 billion, the Yamaguchi-based company, Asia’s largest clothing retailer, said Thursday.

Operating profit for the overseas Uniqlo business rose 40 percent for the six months that ended in February, while declining 4.5 percent domestically amid price cuts.

Billionaire Tadashi Yanai’s casual clothing chain has opened new stores, including one in Tokyo’s Ginza shopping district, under a plan to revamp the Uniqlo brand’s utilitarian image.

Fast Retailing posted a 13 percent gain in net income to ¥65.4 billion for the six months, aided by a ¥11.1 billion gain from favorable currency exchange.

Lower profitability in the domestic business provided a “negative surprise,” Credit Suisse analyst Taketo Yamate said in a note Friday.

The clothing maker’s outlook for the year ending in August assumes an exchange rate of ¥82 per dollar, it said. The yen touched 99.88 on Wednesday, the weakest since April 14, 2009.