Fast Retailing Co., the operator of the Uniqlo clothing chain, said Thursday its operating profit in the first half through February rose 12.7 percent from a year earlier to a record 189.28 billion yen ($1.5 billion), lifted by a weaker yen, especially against the U.S. dollar, and robust sales in North America and Europe.
The Japanese retailer, which also operates the GU casual clothing brand, reported a 38.7 percent jump in net profit from the previous year to 146.84 billion yen, while its sales edged higher 1.3 percent to 1.22 trillion yen.
For the full year to August, the company lifted its group net profit forecast to 190 billion yen from its earlier estimate of 175 billion yen while maintaining its operating profit and sales outlook at 270 billion yen and 2.20 trillion yen, respectively.
"We were able to log massive growth as the company diversified its global primary sources of revenue," Chief Financial Officer Takeshi Okazaki said at a press conference.
Fast Retailing saw its North American operation swing back to the black for the first time since opening its first store in September 2005. It plans to increase the number of stores in the region to 200 within the next five years from 60 by the end of this business year.
Nevertheless, it took a hard hit in China as coronavirus restrictions under the country's zero-COVID policy dragged down demand for clothing.
Regarding foreign exchange rates, the retailer put its assumed exchange rate for the U.S. dollar at 115.6 yen at the end of the business year, higher than 109.9 yen the previous year.
Although a weaker yen is generally considered a boon to exporters as overseas profits are boosted when repatriated, Tadashi Yanai, chairman and CEO of Fast Retailing, expressed concerns over the yen's recent rapid depreciation, noting that it was likely to worsen Japan's economy.
The Japanese currency, which has been on a downward trend over the past few weeks, tumbled to its lowest level in 20 years against the U.S. dollar the previous day.
Although Fast Retailing suspended operations in Russia on March 10, it had been criticized for a delay in making the decision compared to other major companies, as well as reports of Yanai commenting that Russian people need clothing.
The chairman denied that the decision was slow, noting that myriad reasons pushed the retailer to temporarily close its stores, including supply chain constraints and the escalation of Russia's invasion of Ukraine.
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