Uniqlo owner set for 26% profit surge on China rebound, yen slide. When it releases its financial results on Thursday, the Japanese company that owns the multinational apparel retailer Uniqlo is predicted to surpass the record profit set last year thanks to a rebound in China and the yen depreciation.
Fast Retailing (9983.T), which has more than 900 outlets in China, its largest international market, posted record third-quarter results in July and increased its full-year projection as the economy rebounded from a pandemic-related downturn.
The operating profit is anticipated to increase 26% to 374.6 billion yen ($2.52 billion) for the fiscal year through August, according to the average forecast of 12 experts gathered by LSEG. The company’s prediction of 370 billion yen would significantly outperform the 297.3 billion yen of the previous year.
Tadashi Yanai, the richest man in Japan, launched Fast Retailing, which serves as a barometer for merchants doing business in China, the second-largest economy in the world, where sales have begun to recover after tight COVID-19 rules were relaxed.
Meanwhile, the yen has lost approximately 12% of its value against the dollar in 2023, helping Japanese businesses that mostly conduct business abroad.
According to LightStream Research analyst Oshadhi Kumarasiri, given the rebound in China, the weak yen, and the company’s good performance in the United States and Europe, consensus expectations may be understating the company’s outcomes.
The Smartkarma platform publisher Kumarasiri continued, “I’m anticipating a positive earnings surprise and a strong set of guidance for next year.” Fast Retailing has intensified its attention on North American and European markets since its Chinese businesses have struggled for over two years.
Since the regional manager Daisuke Tsukagoshi was promoted to president of Uniqlo last month, there have been rumors that he is being groomed to succeed Yanai. The firm has an ambitious expansion strategy for North America.
According to Forbes, Yanai and his family’s net worth as of October 11 was $33.9 billion. Yanai owns around 19% of the company’s shares.
At the results event on Thursday, both Yanai and Tsukagoshi are expected to speak. Shares of Fast Retailing have increased by 22% in 2023, roughly matching the increase in the benchmark Nikkei index.
