The Domestic Fashion Family Noticed: UNIQLO'S Profit In The 711 State-Owned Stores Increased By 21% Over The Same Period Last Year.

In October 10th, Uniqlo (UNIQLO)'s parent company, Fast Retailing Inc, announced the 2019 fiscal year ended August 31st earnings. With the strong push from the Chinese market, profits continued to record third consecutive years.

XXX points out that, whether sales or profits, the "substantial" performance in the 2019 fiscal year mainly benefited from the promotion of UNIQLO's overseas market and the strong performance of GU brand.

Xun points out that despite the negative impact of the boycott of Japanese goods, it is expected that the new fiscal year will continue to grow. The Group expects profit growth in the current fiscal year 2020 to grow from 6.7% to 275 billion yen, which is far from the 15% increase expected by analysts.

In the 2019 fiscal year from September 1, 2018 to August 31, 2019, the key business data of XXX group are as follows:

Sales grew by 7.5% to 2 trillion and 290 billion yen.

Operating profit increased by 9% to 257 billion 600 million yen, which is generally in line with market expectations, and the sub line GU (excellent) is strong.

Pre tax profits rose 4% to 252 billion 400 million yen over the same period last year.

Net profit increased 5% to 162 billion 600 million yen.

XXX group's medium term goal is to become the world's largest apparel retailer. In order to achieve this goal, the group will focus on UNIQLO overseas market, GU brand and Online retailers There are three main channels.

In the 2019 fiscal year, the performance of the GU brand was commendable. The operating profit of the brand increased by 139% to 28 billion yen. Many analysts had previously criticized GU for being too similar to UNIQLO. But fast marketing has positioned its "fast fashion" and "more fashionable style" to promote the rapid growth of GU.

The number of stores in UNIQLO's overseas markets continues to grow. The brand also opens flagship stores and large stores in major cities worldwide, and promotes the concept of LifeWear of UNIQLO in a large area. In August this year, UNIQLO launched the semi annual magazine "LifeWear", which was launched by the Japanese trend media leader, Xiao Xiao Hao, to publicize its lifestyle.

Since China opened its first UNIQLO store in 2002, China has become the fastest growing group. Today, UNIQLO has 711 stores in China. According to the financial report, the profit of UNIQLO grew by 21% to 89 billion yen in the Greater China region.

Xun said that in the 2022 fiscal year, sales in the Greater China market are expected to exceed 1 trillion yen.

Another big support for UNIQLO's overseas market growth is in Southeast Asia. Recently, UNIQLO's first India store was officially opened, and the group will continue to expand its markets in Malaysia and Indonesia in the future.

Despite the boycott in the Korean market, XXX group added a new UNIQLO store in South Korea in August. The Korean market contributed 8% of sales to UNIQLO, which was down by over 40% in July, and more in August. Although it did not release specific data, it said the situation was "serious". In this regard, Tadashi Yanai said (Korea market) business has not been hit hard, "I do not think this situation will continue, I am optimistic."

In the future, fast marketing will further deepen the reform of e-commerce. In the 2019 fiscal year, sales of online businesses amounted to 258 billion 300 million yen, accounting for 11.6% of the group's total sales.

UNIQLO brand performance

2019 fiscal year, UNIQLO Japanese domestic market:

Sales grew by 0.9% to 872 billion 900 million yen.

Operating profit fell 13.9% to 102 billion 400 million yen over the same period.

Same store sales, including electricity providers, grew by 1% over the same period last year.

Xunjian pointed out that the core sales of winter goods had led to a 0.9% decline in the same sales volume in the first half of the fiscal year, but the same store sales increased by 3.5% year-on-year in the year-on-year sales under the promotion of summer commodities.

Annual electricity sales increased 32% to 83 billion 200 million yen, representing a 7.3% share of total sales to 9.5%.

2019 fiscal year, UNIQLO overseas market:

Sales increased by 14.5% to 1 trillion and 30 billion yen, the first time to break through the trillion yen level.

Operating profit grew 16.8% to 138 billion 900 million yen.

From regional markets:

Sales and profits in the Greater China market grew strongly, sales increased by 14.3% to 502 billion 500 million yen compared with the same period last year, operating profit increased 20.8% to 89 billion yen compared with the same period last year, same store sales continued to rise, electricity sales increased by over 30% to 170 billion yen.

Sales and profits decline in Korea

Sales and profits in Southeast Asia and the Pacific increased significantly, benefiting mainly from the growth of same store sales in cities.

US market losses narrowed sharply

European market sales and profits continued to grow, sales amounted to 100 billion yen, the Russian market strong performance.

In September 2018, the first Holland store in UNIQLO opened in Amsterdam. In October, the largest global flagship store in Southeast Asia opened in Manila, Philippines; in April 2019, the first Danish store opened in Copenhagen; in September, the first Italy store was opened in Milan; in October, the first store opened in India, Delhi. Xun points out that these new stores are beginning to perform well.

Other brands of XX Group

Sub line GU 2019 fiscal year sales and profits are high, with sales rising 12.7% to 238 billion 700 million yen compared with the same period, operating profit grew 139.2% to 28 billion 100 million yen. Focus on the trend of mass market, with the push of marketing efforts, brand store sales increase. Sales of popular single products such as sweaters, sweaters and T-shirts with brand trends are more than one million.

To benefit from reducing the discount and the lower cost of booking raw materials in advance, the gross profit margin of GU brand has increased significantly. Operating profit margin increased by 6.2 percentage points to 11.8%.

Other brands of XXX group are classified as Global Brands. Sales in fiscal year 2019 declined 2.9% to 149 billion 900 million yen, and operating profit was 3 billion 600 million yen (4 billion 100 million yen in the same period last year). According to brand:

New York fashion brand Theory sales and profits are on the rise.

PLST sales grew, operating profits were unchanged from the previous fiscal year.

French fashion brands Comptoir des Cotonniers, Princesse tam. Tam, and denim brand J Brand continued losses

Fast forward group hopes for the 2020 fiscal year ending August 31, 2020.

Operating profit grew 6.7% to 275 billion yen.

Sales grew by 4.8% to 2 trillion and 400 billion yen.

Net profit increased 7.6% to 175 billion yen.

Note: the current 100 yen is about 6.59 yuan.

For the 2020 fiscal year, XXX Group expects sales to rise by 4.8% to 24 trillion yen, operating profit rose 6.7% to 275 billion yen, net profit increased 7.6% to 175 billion yen, and greater China and Southeast Asian and Oceania markets are expected to expand further, and Japanese UNIQLO's annual operating profit will achieve two digit growth.

By the end of August 2020, the total number of stores in the world will increase to 3745, including 817 Japanese UNIQLO stores, 1520 international UNIQLO stores, 445 GU stores and 963 global brand sub stores.

The global fashion industry is full of uncertainties. As the world's most famous Japanese clothing brand, UNIQLO has built a moat under the guidance of Ryui Masa, but to make further progress with the "foundation", we need to make more breakthroughs, not only in terms of electricity supplier and high-tech, but also to accurately hit the "pain spot" of consumers.

More than once, Ryui Masa, who is retiring, stressed that "everything we do is for the future." In response to the rapidly changing fashion retail environment, Ryui Masa repeatedly said he would hand over the group to the young people, and revealed last month that he wanted to take over the company by women. He will retire to the second tier in the future, focus on the position of chairman, and continue to take part in the company's affairs as a "supervisory" business.

In June this year, Ryui Masa appointed Akai Tamaki, the senior vice president of the group, as CEO of UNIQLO Japan, the first female CEO in the history of UNIQLO. Akada Maki, 40, joined UNIQLO in 2001 and worked in UNIQLO stores in Tokyo, Japan and Shanghai, China.

After the release of the earnings report, XXX group's share price rose 2.63% to 63 thousand and 200 yen, and its market value is about 6 trillion and 700 billion yen, or about 440 billion 800 million yuan.