Japan‘s Fast Retailing, which owns clothing brand Uniqlo, reports a surge in the brand’s half-yearly operating profit. Along with the news, Fast Retailing is viewing positively its full-year profit estimate by betting on a higher figure.
Uniqlo showcases satisfying result, to aim higher for full-year operating profit
Uniqlo has proven its resilience even during the COVID-19 pandemic. The brand refused to stay idle and kept on offering its customers new products. Some of Uniqlo’s products that received warm welcome are masks, stay-at-home jogging pants, and other products listed as comfortable apparel.
Noted from Reuters, Fast Retailing revealed that its brand Uniqlo recorded a 23% jump in half-yearly operating profit. The operating profit for the six months through February is as high as 168 billion yen ($1.53 billion). As a comparison, Uniqlo recorded 136.7 billion yen a year earlier.
Accordingly, Fast Retailing is betting on a higher figure for its full-year operating profit. The company forecasts to reach 255 billion yen, 10 billion higher than the previous bet at 245 billion yen. The number is still slightly lower than Refinitiv’s average estimate. From a poll accumulated from 15 analysts, Uniqlo’s full-year operating profit falls at 262.9 billion yen.
Challenges to face in the second half
Uniqlo’s focus on China and Japan might have contributed to the brand’s achievement. However, the company could be facing some risks with crises in Myanmar and China. Both countries act as Uniqlo’s supply chain and one of its most important foreign markets.
At least two of Fast Retailing’s partner factories in Myanmar is currently on pause. The military coup in Myanmar is making it impossible to continue production sooner. Not only Fast Retailing’s factories, the martial law conditions are also forcing a lot of facilities in the country put into a halt.
On the other hand, China has been boycotting more and more fashion brands due to the human rights abuses in Xinjiang province issue. Started with H&M, China has now stopped supporting Burberry, Nike and Adidas. The backlash has now slowly crept to Uniqlo as well.
Five brand ambassadors for Fast Retailing in China have quit due to the issue. Fast Retailing itself operates around 800 Uniqlo stores on the mainland. The same number that the brand operates in its home market of Japan alone.
Read also: Burberry Also Suffers from China Boycott
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