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Fast Retailing Co.’s lineup of functional and casual attire continued to lure value-conscious shoppers whose preferences are changing in the midst of the COVID-19 pandemic, helping to push the Uniqlo operator’s first-quarter earnings close to an all-time high.

Operating profit rose 23% to ¥113.1 billion ($1.1 billion) in the three months ended Nov. 30, according to a company statement Thursday. That beat analysts’ average estimate of ¥101.5 billion, and comes just below Fast Retailing’s record quarterly results of ¥113.9 billion two years earlier. Sales for the quarter, however, fell 0.6% to ¥619.8 billion.

The Japan market is holding up despite the uncertainty of the pandemic, which has created another state of emergency for much of the country. The company’s lineup of casual and functional clothing has attracted more value-conscious customers, resulting in higher same-store sales at Uniqlo’s Japan shops for each month of the quarter.

“Consumers are now thinking of Uniqlo first when they need clothing, and that’s helped our revenue,” said Chief Financial Officer Takeshi Okazaki at a briefing Thursday. “But with the spreading coronavirus especially affecting footfall in urban areas, there’s still challenges ahead.”

Okazaki added that better product mix, marketing and collaboration lines in Japan, such as one with designer Jil Sander, helped sales. E-commerce sales in Japan rose 48% in the quarter, accounting for 15% of total sales in the country.

While Fast Retailing left its full-year forecast unchanged, and said the recent spike in coronavirus cases remains a concern, it sees the latest quarter’s momentum continuing through the first half of the year, spurred by strong Uniqlo results in China.

The company’s business tracked the state of coronavirus infections in many countries. Places that had the pandemic under control — like mainland China, Taiwan and Vietnam — reported higher-than-expected results, while stores in North America and Europe were hit hard.

Fast Retailing’s stock closed at a record high before the earnings were released, rising 1.7% in Tokyo on Thursday.

Investors have valued Fast Retailing’s shares more favorably than other apparel retailers who have a bigger footprint in the West, such as Hennes & Mauritz AB and Zara owner Inditex SA. The Japanese company’s stock is up 48% over the past 12 months and its market capitalization has climbed to nearly level with Inditex’s.

“Fast Retailing in this post-COVID world, it generally ticks a lot of the boxes in terms of the type of products that resonate with consumers,” said Macquarie Capital analyst Leon Rapp in an interview before the earnings release. “It offers good value for money, it lasts well, it’s a sensible purchase. In times of difficulty and mostly unknowns, consumers generally tend to look at the brands they know and trust online and offline as well.”

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