Uniqlo slashes sales growth forecast
Japanese brand Uniqlo is reducing its sales forecast by four percentage points to just one per cent, blaming sagging sales in its home outlets.
Fast Retailing, Uniqlo’s parent company, says unseasonal warm weather which inhibited sales of winter items, product shortages, higher material costs, a stronger yen and the costs of international expansion all impacted on sales.
“The stage of domestic growth is over and the overseas outlook is unclear. Its outperformance might not continue,” Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management in Tokyo, said of Uniqlo’s future performance.
While Uniqlo outlets overseas enjoyed a 60 per cent sales increase, in Japan outlets fell 10 per cent from September to November.
In December, Japan’s outlets bounced back with a 14 per cent surge in sales due to the cold weather. Even so, Fast Retailing trimmed down the annual same-store sales growth target in Japan from five per cent to one per cent.
“We don’t want to view the second half too aggressively, so after taking an objective look we brought (the estimate) back down to a regular level,” EVP Nobuo Domae said.
In its move to offset frail sales in its home country, Fast Retailing plans to open 200 to 300 Uniqlo stores yearly outside Japan, most of them in Asia.
Japanese outlets still make up about 70 per cent of Uniqlo’s total revenue, but Fast Retailing is aiming for international sales to account for more than than two thirds of its sales by 2020.