Japan’s Fast Retailing, which owns clothing brand Uniqlo, said on Thursday that its first-quarter earnings were down 2%.
A day after announcing plans for a significant wage increase, the company posted an operating profit of 117.1 billion yen ($889.82 million) for the three months to the end of November, compared with 119.4 billion yen the previous year.
The consensus forecast was ¥135.3 billion, according to an average of five analyst estimates collected by Refinitiv.
Domestic performance was hit by warm weather in November that dampened sales of fall and winter wear, while Covid controls continued to weigh on China, including the temporary closure of 247 stores in Beijing and Guangzhou.
Chief Financial Officer Takeshi Okazaki said at a press conference, “We believe that normal business will return in mainland China once life with COVID-19 takes hold.
Sales and profit increased in all other regions. The company has left its full-year operating profit forecast unchanged at 350 billion yen.
The company, Japan’s largest retailer, shocked the nation on Wednesday by announcing it would raise employee wages by up to 40%. It greatly satisfied the policy makers who were calling for an increase in
“From a macro perspective, the move highlights how Japanese companies are finding it increasingly difficult to attract and retain workers,” said independent equity firm Publishing on the Smartkarma platform. Analyst Mark Chadwick said.
Fast Retailing, which operates more than 3,500 clothing stores around the world, posted record profits last year as growth in North America and Europe offset a slump in China.
The company is considered a pioneer in the Chinese market, where it produces more products and operates around 900 Uniqlo stores, more than in Japan.
Fast Retailing shares fell 2% in Tokyo trading compared to flat Nikkei index.
By Rocky Swift.Editors: Clarence Fernandez, Bradley Perrette, Conor Humphries
Uniqlo owners see projections to outpace profits on rising sales
Uniqlo owner Fast Retailing has beaten analyst forecasts for profit and sales this fiscal year, thanks to rising demand for cheap casual apparel in Japan and a weaker yen supporting profits brought back from abroad. announced a high outlook.