The Japanese parent of Uniqlo says its annual sales soared 21 per cent in the year to August 31.
Profit rose 11.8 per cent to 148.6 billion yen (about US$1.4 billion).
Uniqlo Japan boosted both sales and profit in a subdued domestic retail market, with an improvement in gross margin. Japan remains the mainstay of the Fast Retailing Group, accounting for 51.7 per cent of consolidated sales and 74.4 per cent of consolidated operating income.
The company said this strong performance was due in part to a 1.9 per cent rise in same-store sales and in part to a rise in total sales per store, the latter achieved through a “scrap and build” strategy of gradually increasing the size of its sales floor by replacing smaller, less efficient stores with large-scale outlets.
“Throughout the business year, sales of key core items such as Heattech, knitwear, jeans, Ultra Light Down, sweatshirts and pants, and AIRism proved strong. In addition, new ranges of skirts, dresses, and bras also sold well. Thanks to the strong overall sales trend,
Uniqlo Japan’s gross profit margin improved 3.0 points year on year to 49.5 per cent. On the other hand, the business costs to net sales ratio also rose 1.7 points year on year. This was due mainly to a rise in the personnel to net sales ratio which was fuelled by higher in-store personnel costs, and also due to higher distribution costs.
The total Uniqlo Japan network decreased by one store to 852 (including franchise outlets) at the end of August 2014.
Uniqlo International achieved significant gains in sales and income on the back of mass new store openings, the company said in a statement Friday.
“Meanwhile, the Global Brands segment reported a rise in sales but a contraction in income, on the back of rising sales but falling income at both its GU and Theory operations. Foreign exchange gains, recorded as non-operating income, shrank by ¥7.3 billion compared to the previous year. “
In Japan, sales of core products continued strongly throughout the year and same-store sales rose 1.9 per cent year on year. Those strong sales, along with an improved gross margin, boosted operating income by 14.2 per cent.
Uniqlo International achieved expected strong gains in sales and income. “Particularly strong same-store sales growth in Greater China (Mainland China, Hong Kong, and Taiwan), South Korea, and Europe generated higher-than-expected gains in both sales and income for those regions. Uniqlo Greater China generated sales of ¥208.1 billion, a 66.5 per cent increase year on year, and operating income of ¥24.8 billion, an 83 per cent increase year on year.
Uniqlo Southeast Asia and Oceania which incorporates Singapore, Malaysia, Thailand, the Philippines, Indonesia, and Australia also reported rising sales and income. However, these gains fell slightly short of target following weaker-than-expected sales of summer items.
Uniqlo opened its first store in Australia, in Melbourne, in April 2014. Sales from this store have already outstripped the company’s forecasts. Uniqlo added 41 stores in the Southeast Asia and Oceania region in fiscal 2014, taking the total number of stores there to 80 at the end of August 2014.
Uniqlo USA, where it now has 25 stores – 18 of them new this fiscal year – generated a strong performance in the first half of the business year from September 2013 through February 2014, however, the cool summer had an adverse impact on sales in the second half from March through August 2014.
Uniqlo Europe, which covers the UK, France, Russia, and Germany, reported higher-than-expected gains in both sales and income in fiscal 2014. The first Uniqlo outlet in Germany opened in Berlin in April 2014, as a global flagship store.
“We believe the store’s presence and strong performance is helping to build awareness of the Uniqlo brand in Europe,” the company said.
The total number of Uniqlo International stores expanded by 187 to 633 stores at the end of August 2014.
