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Uniqlo operator reports record annual operating profit

China sales allow Fast Retailing to shrug off slump in South Korea

China, which opened its first Uniqlo store in 2002, has been Fast Retailing's biggest growth market in recent years.   © Reuters

TOKYO (Reuters) -- Japanese fashion group Fast Retailing Co Ltd on Thursday reported a record annual profit for a third consecutive year, helped by strong sales at its Uniqlo stores in China and strong performance of its cheaper line GU.

Operating profit climbed 9% to 257.6 billion yen ($2.40 billion) in the year ended Aug. 31, mostly in line with market expectations, betraying limited impact from a slump in sales in South Korea amid a consumer boycott of Japanese goods.

The firm expects profit to rise 6.7% to 275.0 billion yen in the current business year, less than half the 15% growth forecast by analysts, according to Refinitiv data.

Fast Retailing's biggest growth market in recent years has been China, where it opened its first Uniqlo store in 2002 and now has over 700 locations.

Uniqlo's profit in greater China rose 21% to 89 billion yen, Fast Retailing said. The company has said it expects revenue in the region to grow to 1 trillion yen by fiscal 2022 from 502.5 billion yen last year.

Another strong point last year was Uniqlo's sister brand GU, where operating profit jumped 139% to 28 billion yen. The brand was previously dismissed by some analysts as too similar to Uniqlo, but has proved popular for its more affordable and trendy items such as oversized sweatshirts.

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