Uniqlo owner set for 26% profit surge on China rebound, yen slide
Reuters
The Japanese operator of global clothing chain Uniqlo
Fast Retailing
Operating profit for the fiscal year through August is expected to rise 26% to 374.6 billion yen ($2.52 billion), according to the average estimate of 12 analysts collected by LSEG.
The company has forecast 370 billion yen, which would far exceed last year’s 297.3 billion yen.
Fast Retailing, founded by Japan’s richest man Tadashi Yanai
The yen, meanwhile, has weakened about 12% versus the dollar so far in 2023, giving a boost to Japanese companies that get most of their sales outside of the country.
Consensus estimates could be underplaying the company’s results given the recovery in China, the weak yen, and strong performance in the United States and Europe, said LightStream Research analyst Oshadhi Kumarasiri.
“I’m expecting a positive earnings surprise and a strong set of guidance for next year,” added Kumarasiri, who publishes on the Smartkarma platform.
With its Chinese operations in doldrums for more than two years, Fast Retailing has increased its focus on markets in North America and Europe.
The company has an aggressive growth strategy for North America, and the regional chief Daisuke Tsukagoshi was elevated to president of Uniqlo last month, raising speculations he’s being groomed to succeed Yanai.
Yanai, who holds about 19% of the company’s shares, and his family had a net worth of $33.9 billion as of Oct. 11, according to Forbes.
Both
Fast Retailing’s shares are up 22% in 2023, about even with the gain in the benchmark Nikkei index.
