Japan's Fast Retailing Co. Ltd. on Jan. 10 reported a 6.4% year-over-year drop in fiscal first-quarter profit amid sluggish domestic sales for its flagship apparel brand Uniqlo.
For the three months ended Nov. 30, 2018, profit attributable to the owners of the parent fell to ¥73.48 billion from ¥78.54 billion in the year-ago period. The figure missed the S&P Global Market Intelligence consensus GAAP net income estimate of ¥77.11 billion, with three analysts reporting. Basic EPS came in at ¥720.16, down from ¥770.11 a year prior.
Fast Retailing's revenue for the fiscal first quarter rose 4.4% year over year to ¥644.47 billion from ¥617.03 billion. The growth was driven by Uniqlo's international business, which posted a 12.8% increase in revenue to ¥291.38 billion that was helped by strong online sales in China.
Uniqlo Japan, however, saw revenue slip 4.3% to ¥246.14 billion. Fast Retailing said mild weather during October and November impacted winter clothing sales for the store chain in its home market.
Among the company's other business units, the casualwear brand GU recorded revenue of ¥65.49 billion, a 7.7% year-over-year increase. Revenue for the Global Brands segment ticked up 1.8% to ¥40.78 billion, with growth for Theory and PLST offset by losses for Comptoir des Cotonniers, Princesse Tam.Tam and J Brand.
Fast Retailing said it will focus on expanding the Uniqlo International and GU segments as part of the company's medium-term strategy to become the world's leading apparel retailer. Efforts will include opening more Uniqlo flagship and large-format stores in major cities overseas, along with expanding GU's reach in China and South Korea.
Meanwhile, the company reaffirmed its outlook for the fiscal year ending Aug. 31, expecting 6.6% growth in attributable profit to ¥165.0 billion and an 8% increase in revenue to ¥2.30 trillion. Its basic EPS forecast for fiscal 2019 also remains unchanged at ¥1,617.33.
The current S&P Global Market Intelligence consensus estimates for the full fiscal year are for net income of ¥171.23 billion and GAAP EPS of ¥1,668.31.
In addition, Fast Retailing continues to forecast an annual dividend of ¥480 per share for fiscal 2019.
As of Jan. 9, US$1 was equivalent to ¥108.27.