Japanese retailer Fast Retailing has lowered its profit outlook for the year to August due to losses from J Brand.

The Uniqlo parent now expects full-year net income to be 78 billion yen ($769.9 million), 10 billion yen lower than the earlier forecast.

US-based denim-focused J Brand is 80 per cent owned by Fast Retailing.

“We weren’t effective enough in competing in the increasingly tough premium denim market,” said CFO Takeshi Okazaki.

The forecast cut comes after its net income in the third quarter ending May dropped 12 per cent to 20.28 billion yen ($200.2 million).

The company says overseas and Japan Uniqlo stores increased by 188 to 598 and eight to 841 as of end of May, respectively.

Fast Retailing says it remains on track to become the world’s largest retailer by 2020, with a goal to achieve 5 trillion yen sales by that time.

It will open between 200 to 300 stores overseas annually.