Negative Impact Of Weather On Fast Forward Group'S First Quarter Profit Decline

Japan's fast fashion UNIQLO failed to escape the negative effects of the weather in the 2018 fiscal year, beating Zara and H&M.

According to the first quarter report released today by the fast retailing group of UNIQLO, the sales increased by 4.45% to 644 billion 466 million yen in the three months to November 30, 2018, and gross profit increased by 2.44% to 324 billion 800 million yen compared with the same period last year. Net profit decreased 6.45% to 73 billion 476 million yen compared with the same period last year.

During the period, the sales of UNIQLO Japan decreased by 4.3% to 246 billion 100 million yen compared with the same period last year, while operating profit dropped 29.9% to 37 billion 900 million yen. Although the new merchandise and fashion goods such as special grade sheep hair knitted sweaters, heavy sportswear, fleece and knitted jackets were still popular, but because of the high temperature in October and November, the flagship products of the brand winter were still unsalable.

But UNIQLO's sales in e-commerce channels registered a strong growth of 30.9%, with revenue rising from 9.7% in the same period last year to 7%.

Up to now, UNIQLO has a total of 788 retail stores in Japan, with a total of 11 new stores and 6 outlets.

The group said in its earnings report that although the sales of UNIQLO in Japan were down by the influence of warm winter weather, its overseas market performance, including greater China, continued to rise steadily, continuing the good trend of double growth of revenue and profit. The first quarter sales rose 12.8% to 291 billion 300 million yen in the first quarter, while operating profit rose 12.6% to 52 billion 500 million yen.

Among them, UNIQLO's performance in mainland China was the most significant, with double-digit growth in both revenues and profits, mainly due to the brand's overall channel layout in the market.

In addition, thanks to the re adjustment of product mix and channel layout in the US market, UNIQLO's performance in the market has finally improved, and both revenue and profits have recorded a substantial increase.

UNIQLO has benefited from the increase in the number of stores in Europe, and its sales performance has also improved strongly, especially in Russia.

In September last year, UNIQLO opened its first store in Amsterdam, Holland, and opened the largest flagship store in Southeast Asia in Philippines, Manila in October of that year.

In addition to UNIQLO, another leisure fashion brand GU of XXX group also declined in the first quarter, although sales increased by 7.7% to 65 billion 400 million yen, but operating profit fell 4.9% to 8 billion 500 million yen.

The global brand division also saw revenue growth but its profits declined. During the period, its revenue grew 1.8% to 40 billion 700 million yen, while operating profit dropped 9.9% to 2 billion 700 million yen.

Among them, Theory's performance in the US market grew strongly, and the profits of PLST decreased due to the increase in stores and operating costs. French brand Comptoir des Cotonniers, PRINCESSE Tam Tam and American Cowboy brand J Brand continued to record operating losses.

In the second quarter, XXX said the strategic focus of UNIQLO will be on the Asia Pacific market, such as greater China and South Korea, and to increase the sales promotion of winter products, which are unsalable by the warm winter.

For the 2019 fiscal year, the XXX group decided to maintain its original expectation, or to grow 8% to 2 trillion and 300 billion yen in the 2018 fiscal year. The operating profit rose 14.3% to 270 billion yen, and net profit increased 6.6% to 165 billion yen.

As of today's closing, 9983.TYO shares fell 2.14% to 52 thousand yen, with a market value of about 5 trillion and 500 billion yen, or about 345 billion 100 million yuan.