Fast Retailing Co. on Thursday raised its full-year profit forecast by 13 percent on the back of robust growth across Asia, as the owner of clothing chain Uniqlo continues to chase the top spot in global apparel sales.
Asia’s biggest clothing retailer now expects operating profit for the year through August to reach ¥225 billion ($2.11 billion) from ¥200 billion previously.
Asia has become a major growth driver for Uniqlo as its affordable clothing lines, including breezy Airism innerwear and lightweight down jackets, grow in popularity in China and Southeast Asia.
The retailer’s appeal in the region could be its trump card as founder and Chief Executive Officer Tadashi Yanai looks to fulfill his ambition to overtake H&M and Zara parent Inditex to become the world’s top apparel retailer. The firm sits in third place, above Gap Inc.
Its Uniqlo chain is also growing at home, with same-store sales in the first six months of its financial year rising 8.4 percent, boosted by demand for warm clothes during a particularly cold winter.
However, a lack of warm clothing options at low-priced chain GU — which the firm hopes to build up to become a second Uniqlo — saw same-store sales fall slightly over the same period.
Online sales at Uniqlo Japan grew 31.6 percent, forming 7.5 percent of total sales.
Uniqlo said it wants to more than double the proportion of global sales made online from 9 percent currently by the year ending in August 2023.
Fast Retailing’s recent fortunes contrast with those of H&M, whose sales growth has stalled as it struggles to adapt to the shift to online shopping. Uniqlo will open its first store in the Swedish retailer’s home market later this year.
Fast Retailing’s operating profit grew 35 percent to around ¥56.6 billion for the quarter ended February, showed Reuters calculations based on company data. Analysts had forecast profit of ¥49.1 billion.