Japan's Fast Retailing Co. Ltd. on Oct. 11 reported a 29.8% jump in profit for full-year fiscal 2018 following strong sales of its flagship apparel brand Uniqlo in its home market as well as overseas.
For the fiscal year ended Aug. 31, profit attributable to owners of the parent came in at ¥154.81 billion, up from ¥119.28 billion in the year-ago period and beating the S&P Global Market Intelligence consensus estimate of ¥143.79 billion.
Basic EPS for the year was ¥1,517.71, compared to ¥1,169.70 a year ago and also ahead of the S&P Global Market Intelligence consensus estimate of ¥1,407.16.
Fast Retailing's revenue for fiscal 2018 rose 14.4% year over year to ¥2.13 trillion from ¥1.862 trillion, exceeding Fast Retailing's forecast of ¥2.11 trillion.
Across the company's various segments, Uniqlo's international business posted an operating profit surge of 62.6% year over year to ¥118.90 billion, while revenue soared 26.6% year over year to ¥896.32 billion. The Greater China region saw strong sales growth both in physical stores and online, while the U.S. reduced losses through "more accurate sales planning." Meanwhile, Southeast Asia and Oceania recorded a double-digit increase in same-store sales.
Domestically, Uniqlo saw operating profit climb 24.1% year over year to ¥119.04 billion, while revenue rose 6.7% to ¥864.78 billion. An increase in customer visits helped lift same-store sales during the fiscal year.
Meanwhile, Fast Retailing's casualwear chain GU recorded a 13.1% drop in operating profit to ¥11.77 billion, though revenue increased 6.4% to ¥211.83 billion. The company said the chain had sluggish sales due to a lack of cold-weather apparel offerings and underperforming collections.
In the Global Brands segment, revenue rose 9.5% year over year to ¥154.46 billion, but recorded an operating loss of ¥4.11 billion, which was attributed to ¥9.9 billion in impairment losses on Comptoir des Cotonniers and other labels. Theory saw both revenue and profit rise, while Comptoir des Cotonniers, Princesse Tam.Tam and J Brand saw continued losses.
In addition, Fast Retailing provided its outlook for fiscal 2019. It forecasts that attributable profit will grow 6.6% year over year to ¥165.0 billion for the 12 months ending Aug. 31, 2019, while revenue will rise 8% to ¥2.30 trillion.
The company also expects to pay an annual dividend of ¥480 per share for fiscal 2019, an increase of ¥40 from the scheduled dividend payment of ¥440 per share for fiscal 2018.
In a same-day presentation, Fast Retailing Senior Vice President Takuya Jimbo also presented the company's strategy to revamp its supply chain. It produces 1.3 billion items annually and is now planning to develop a supply chain that makes, distributes and sells "only what is necessary."
That plan includes partnering with tech companies Google LLC and Accenture PLC on clothing design, partnering with Japanese textile companies Toray Industries Inc. and Shima Seiki Mfg. Ltd. on production, and collaborating with logistics company Daifuku Co. Ltd. to automate warehouses. In addition, the company is looking to reduce surplus stock, in a shift away from its traditional discounting model.
As of Oct. 10, US$1 was equivalent to ¥112.67.