Uniqlo operator Fast Retailing Co yesterday posted a record first-quarter profit and kept its yearly forecast unchanged, even as business in the key Chinese market was hit by COVID-19 restrictions.
The Japanese casualwear firm said that better-than-expected sales and profit in the three months to last month could largely be explained by the “growing diversification” of its business.
While it does not expect the spread of the highly contagious Omicron variant of SARS-CoV-2 to dent overall performance in the fiscal year, the company sounded a note of caution over unpredictable effects of the COVID-19 pandemic.
Photo: AP
“We expect to achieve our initial estimates, though we have difficulties involved in attempting to predict the future situation due to the global spread of COVID-19,” it said in a statement.
Net profit for the first quarter jumped 33 percent year-on-year to ￥93.6 billion (US$817.1 million), marking its best ever first quarter, Fast Retailing said, as business in many parts of the world rebounded from virus lockdowns.
However, revenue and profit declines were seen in China, which is pursuing a strict “COVID zero” strategy and has in the past few months imposed tough localized restrictions.
Sales dropped in Japan, too, following strong performance the previous year and as warm weather hit demand for winter outfits.
The company, one of the world’s top apparel retailers, kept its net profit forecast for the year to August unchanged at ￥175 billion — a 3 percent increase from the previous year’s record figure.
Its results have also been boosted by the depreciation of the yen, which last week hit a five-year low against the US dollar.
Separately, Asos PLC is moving its stock listing to the London Stock Exchange’s main market in a long anticipated shift to attract more investors, and as demand for party dresses and formal wear fuels sales.
The British online fashion retailer said in a statement that sales over Christmas were solid, helped by brands like Topshop.
After shocking the market with a profit warning in October last year, Asos held its full-year forecast steady and yesterday pointed to sales growth of as much as 15 percent.
Asos shares lost half their value last year even as online shopping boomed.
The retailer, like rivals Boohoo Group PLC and Hennes & Mauritz AB, has been hit hard by logistics problems that have made moving stock around the world more difficult amid the pandemic and Brexit.
Rising returns from customers, a big cost for online retailers, have also dented Asos’ performance.
After 20 years on London’s Alternative Investment Market, Asos expects to switch its listing to the main market at the end of next month.
The stock rose as much as 4.9 percent in early trading.
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