Fast Retailing reports 8.5 percent rise in Q1 revenues

For the first three months ended November 30, 2015, the Fast Retailing Group said that there was a rise in revenue but a fall in profit. Consolidated revenue expanded 8.5 percent year on year to 520.3 billion yen (44 billion dollars), while operating profit declined 16.9 percent. By individual business segment, Global Brands reported rises in revenue and profit, Uniqlo Japan reported declines in both revenue and profit, while Uniqlo International reported a rise in revenue but a fall in profit.

Uniqlo Japan and Uniqlo International

Uniqlo Japan said that the decline in profit was due to warm winter lowering demand. Fall/Winter ranges got off to strong start, boosting same-store sales in September and October; however, unexpected warm weather in November lowered demand for winter items, pushing overall revenue sharply down. On the profit side, heavy discounting in November squeezed gross margins and the shortfall in sales swelled the SG&A ratio. Operating profit declined 12.4 percent year on year.

Warm winters around the world lead to decline in profit at Uniqlo International. The company said, unseasonal warm winter weather around the globe adversely impacted same-store sales at Uniqlo Greater China (Mainland China, Hong Kong and Taiwan), Uniqlo South Korea and Uniqlo USA in particular, resulting in a lower than expected performance and declining in profits in all three areas. At the end of November 2015, there were 864 Uniqlo International stores.

Global Brands reported higher-than-expected revenue and profit gains on strong GU. Low-priced GU fashion casualwear brand reported rises in revenue and profit, while Theory reported a slight decline in profit, and J Brand, an expanded operating loss.

Decline in December same-store sales at Uniqlo Japan

December 2015 same-store sales decreased by 11.9 percent year on year at Uniqlo Japan, while sales at its own stores decreased by 12.5 percent. Total sales including online sales decreased by 10.7 percent. The company attributed same-store sales decline in December after the extremely mild weather stifled sales of winter clothing.

The company opened two new stores and closed one during the month.