Uniqlo’s parent company Fast Retailing Group has reported that its revenue surged by 6.5 per cent year-on-year in the first half of fiscal year 2016 (six months from September 1, 2015 to February 29, 2016). However, the company’s consolidated operating profit dropped 33.8 per cent to US $ 914.4 million in the period under consideration.
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As per the press release of the company, consolidated profit before income taxes plunged 49.9 per cent year-on-year and profit attributable to owners of the parent declined 55.1 per cent year-on-year. Besides this, Uniqlo Japan too fell short of expectations in the first half of the fiscal as its revenue bombed 0.2 per cent year-on-year and operating profit decreased 28.3 per cent year-on-year. Same-store sales declined 1.9 per cent year-on-year in the reporting period.
However, e-commerce sales surged 28.4 per cent, accounting for 5.6 per cent of total revenue. The total number of directly-run Uniqlo Japan stores dropped by 9 to 805 stores at the end of February 2016, while the number of franchise outlets rose by 11 to 39 stores after 10 stores were converted from directly-run stores to new employee-franchise outlets. In the first half, Uniqlo International generated revenue rise of 12.7 per cent but operating profit fell 31.4 per cent.
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After witnessing a challenging first half, Fast Retailing has announced a cut its full-year profit expectations. The firm now expects net profit for the year ending August 31, 2016 to decrease by 45.5 per cent to US $ 552.2 million. Operating profit is now expected to drop 27 per cent to US $ 1.10 billion, down from an earlier outlook of US $ 1.65 billion. However sales are estimated to increase by 7 per cent to US $ 16.56 billion.
