Uniqlo owner Fast Retailing on Thursday raised its earnings forecast for fiscal 2018, thanks to strong sales of warm clothing and improved inventory management so far in the year.
The Japanese fashion retailer said it expects 130 billion yen ($1.2 billion) in net profit for the year ending August, a 9% increase on the previous year, on 2.11 trillion yen in revenue. The new forecast figures are up by 10 billion yen and 60 billion yen, respectively from its previous statement.
The revision was made due to the strong global performance of Uniqlo, the company's core brand, in the first and second quarters. Total revenue for the first two quarters that ended in February was 1 trillion yen, an increase of around 20% on the previous year.
Same-store sales of Uniqlo in Southeast Asia grew by double digits. Sales were especially strong in Indonesia, Malaysia and Thailand, where they opened the region's first stand-alone store in March.
Demand for warm clothing contributed to high sales in China, Hong Kong, South Korea and Japan. The company said better management of inventory prevented popular products from running out of stock.
South Korea, Greater China and other Asian regions are expected to lead growth in the second half of the fiscal year. Founder Tadashi Yanai said: "The age of Asia has finally come," with the region's middle-class population increasing. As Uniqlo's overseas sales surpassed those in Japan in the first quarter, "I feel the potential that our clothes are accepted by all population of the world," he added.
The company also said it plans to double global sales of Uniqlo by 2022 from the current 1.54 trillion yen. This would be done through integrating operations in different regions, improving the supply chain, strengthening marketing strategies and expanding internet sales. Most of the growth is expected to come from outside of Japan.
There has been much speculation about Yanai's retirement but on Thursday, he said: "I will not retire." He added that current executives have been developed to undertake key works of management.