Fast Retailing warns full-year profit will halve

Business | Reuters and Avery Chen 10 Jul 2020

Japan's Fast Retailing (6288), owner of casual clothing brand Uniqlo, lowered its profit outlook for the year through August as the pandemic wreaked havoc on its global fashion business.

But it also reported a strong rebound in Uniqlo's domestic same-store sales for June and said business in China was recovering faster than previously expected, suggesting it may weather the crisis better than many global peers.

Store closures and weak consumer spending around the world has brought a halt to years of growth at the company, now Asia's biggest fashion retailer and the world's third after Zara owner Inditex and H&M.

Fast Retailing forecast operating profit of 130 billion yen (HK$9.4 billion) for the year through August, down 50 percent from a year earlier rather than a previously expected 44 percent, following a surprise loss of 4 billion yen in the March-May quarter.

It also forecasts a 13 percent drop in annual sales to 1.99 trillion yen, ending 16 straight years of growth.

Uniqlo's domestic same-store sales, including online purchases, rose 26 percent in June from a year earlier, after falling 57 percent fall in April and 18 percent in May.

Meanwhile, Chinese menswear producer China Lilang (1234) saw retail sales of its LILANZ products fall by between 30 to 35 percent in the first half.

But the sales decline narrowed in the second quarter, falling 15 percent to 20 percent year-on-year.

Shares of China Lilang rose 1.11 percent to HK$4.56 yesterday.

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