Uniqlo parent Fast Retailing may have reported a 12-per-cent drop in sales in its full-year results, but that decline was far less than predicted as recently as July because the Greater China and Japanese markets recovered at a faster rate than expected.
The company reported a full-year profit of US$1.426 billion, down 42 per cent, on sales of $19.185 billion worldwide.
Same-store annual sales across Uniqlo stores declined by 6.8 per cent in Japan, while fourth-quarter sales in Greater China were up 20 per cent year on year.
In South Korea, where the company has been impacted by a broad boycott of Japanese brands by local consumers for the last year or so, sales fell sharply and Fast Retailing recorded a loss, despite closing its poorest-performing stores.
Elsewhere, sales and profit were down across most of Southeast Asia and in Australia and India, but Singapore, Malaysia, Thailand and Australia recovered favourably in the fourth quarter. Losses were reported in both North America and Europe.
Sales by the GU brand rose 3 per cent for the year, but operating profit was down by 22.5 per cent.
Given the fast recovery to date since the peak of the Covid-19 pandemic in Asia-Pacific, Fast Retailing is now projecting a 9.5-per-cent increase in overall revenue for the 2021 fiscal year and a profit attributable to shareholders of $1.58 billion, which would represent an increase of 82.6 per cent on the year just ended.
Revenue is predicted to decline in the first half due to the continuing impact of Covid-19, “but we forecast large revenue and profit gains in the second half assuming the virus is brought under control,” the company said in its results announcement. “All business segments are forecast to generate full-year revenue and profit gains.”
During the last financial year, Fast Retailing has continued its expansion into new markets, opening the first Uniqlo in Milan in September last year, the first in New Delhi a month later, and making its Vietnam debut in Ho Chi Minh City in December.
“While all those markets were impacted by Covid-19, Uniqlo Italy managed to post a full-year profit, and the Vietnam operation, which was only launched in December, turned a profit in the second half.”