Japan’s Uniqlo operator downgrades profit outlook on pandemic

TOKYO (AFP) – Uniqlo operator Fast Retailing reported plunging profits and lowered its annual profit outlook yesterday, with the Japanese giant citing the impact of the coronavirus pandemic, which forced lengthy store closures.

The firm now expects annual net profit to August of JPY85 billion, down from an earlier projection of 100 billion yen announced in April, and nearly a half of what it earned in the previous year.

Annual operating profit is forecast at JPY130 billion and sales at JPY1.99 trillion, compared with earlier forecasts for JPY145 billion and JPY2.09 trillion respectively.

The revisions were necessary as previous forecasts did not account for the full impact of a state of emergency Japan declared earlier in the pandemic, which forced the firm to shut stores, as well as the slower-than-expected reopening of its branches overseas.

For the nine months to May, Fast Retailing said its net profit plunged 42.9 per cent to JPY90.64 billion yen. Operating profit and sales were also down.

And the company reported impairment losses, linked to the declining value of certain assets, of JPY15.2 billion, further driving down its bottom line.

Fast Retailing said it was on track to achieve business targets it set given the tough business climate with cost-cutting, limited discounts and a healthy recovery for operations in Japan and China.