Japan'S Famous Casual Wear Chain Stores, UNIQLO, Cut Profit Expectations

Famous Japanese casual wear

The operators of Uiqlo reduced the expected sales and profits of the brand for the fiscal year ended August, revealing its pessimism about the domestic economy and the decline in US sales.

Compared with the estimated net profit of 81 billion 500 million yen 3 months ago, XXX now hopes that its net profit will reach 79 billion yen.

The group also lowered its estimated annual sales and operating profits respectively, with sales from 929 billion 500 million yen to 131 billion 500 million yen and operating profit from 941 billion 500 million yen to 138 billion yen.

The revised figures reflect the vulnerability of UNIQLO to unstable weather and temperature.

Bad weather in the last quarter had a negative impact on summer clothing sales.

The company also admitted that it could not launch key products that could serve as a mainstay, for example, the popular high-tech underwear.

Compared with the same period last year, UNIQLO's same store sales in Japan dropped by 7% in June, due to typhoons and cooling, resulting in weak sales of summer clothing, which is the third consecutive month of decline.

In the next few months, as temperatures rise, Okazaki Takeshi, chief financial officer of fast retailing group of UNIQLO, said at a press conference: "same store sales will reach the same level in the same period last year."

"But we will inevitably see the same store in the fourth quarter."

There is a slight drop between July and August. "

He went on to say that because of the decline in sales of clothing in summer, the company still had the opportunity to squeeze profit margins through discounted sales at the end of the fiscal year.

In addition, because of its fierce competition in the chain stores in New York, the United States deepened its business losses.

Large scale promotions and store rents in the prime locations of the city have resulted in the highest operating cost of New York business.

Okazaki said the company plans to turn the United States into a profit in the next fiscal year or second years.

In order to better compete with more powerful competitors, such as GAPP, by actively setting up shop in mainland China and Taiwan, New York and other places, fast selling group has been expanding its power overseas, but domestic sales in Japan still account for a large proportion of the total business.

Ryui Masa, CEO of Fast Retailing, said that by 2015, the sales of UNIQLO's overseas operations will exceed that of Japan's domestic sales.

In the quarter ended May, XXX announced that its net profit from March to May was 14 billion 700 million yen, compared with 11 billion 700 million yen in the same period last year.

Revenue increased by 12% in the quarter from 218 billion yen to 194 billion 600 million yen.

The growth is due to the strong overseas sales of UNIQLO, especially in some Asian countries, such as China and South Korea, trying to offset losses in the United States.