Operating profit outside its home market of Japan rose even further in the three months to November 30 by 57.2 per cent year on year to ¥24.3 billion, (US$203 million). Uniqlo, in a statement, said the international division performed “extremely well” with revenue and profit higher than expected.
On the domestic market, Uniqlo also achieved higher than expected increases in revenue and profit. Revenue rose to ¥232.6 billion (up 11.6 per cent) and operating profit expanded to ¥51.1 billion (up 21.3 per cent). It said operating profit rose strongly due to a 7.5 per cent increase in same store sales and higher gross profit margins.
Consolidated revenue totaled ¥479.5 billion (+23.3 per cent), and consolidated profit before taxes totalled ¥106.7 billion (up 53.6 per cent).
The company said the depreciation of the Japanese yen had boosted the appraisal value of foreign-currency denominated assets, generating net finance income of ¥15.3 billion.
Uniqlo aims to become the world’s number one apparel manufacturer and retailer by 2020.
“In pursuit of this aim, we are committed to promoting globalisation, strengthening our overall group management, and reigniting our entrepreneurial spirit,” the company said.
“We have focused much of our efforts on building up our global Uniqlo operations, by accelerating the pace of new store openings outside of Japan. We have also opened global flagship stores, hotspot stores and large-format stores in major cities around the world, in order to boost the awareness and visibility of the Uniqlo brand and to strengthen our global operational base. Within our Global Brands segment, we have been actively expanding our low-priced GU casual wear brand, and our Theory fashion label.”
In Japan, the company’s gross profit to net sales margin improved by 2.4 per cent in the first quarter thanks to the strong overall sales trend.
“The onset of cool weather from early September enabled Uniqlo Japan to launch its fall and winter ranges earlier than usual and the subsequent strong performance of core winter items ranges, such as HeatTech, Ultra Light Down, and Extra Fine Merino, helped to boost the gross profit margin.”
Uniqlo Japan opened the global hotspot store, Uniqlo Kichijoji, on October 3 and the global flagship store, Uniqlo Osaka on October 31.
“Both of these important new community focused stores have proved extremely successful so far.”
The number of directly run Uniqlo Japan stores, excluding 28 franchise outlets, totalled 824 at the end of November. While there is a net decrease of 14 stores year on year, nine of these stores were converted from directly run stores to new employee-franchise outlets.
On the international front, sales exceeded expectations, even after stripping out any foreign currency effect.
The retailer added a net 62 stores in the first quarter, taking its international portfolio beyond 695 – 183 stores more than a year ago.
Within the Uniqlo international business, Uniqlo Greater China (Mainland China, Hong Kong, and Taiwan) and Uniqlo South Korea reported higher than expected increases in revenue and profit.
Uniqlo Southeast Asia and Oceania generated rising revenue and profit in line with expectations, while Uniqlo USA fell short of plan and reported an increase in revenue but a reduced profit. Uniqlo Europe, including operations in the UK, France, Russia, and Germany, reported a slightly lower than expected increase in revenue and profit at the same level year on year.
Uniqilo’s low priced GU fashion casual wear brand reported double-digit increase in both revenue and profit as expected, with strong performances from heavily advertised skirts and knitwear items boosting sales in existing stores.
Its Theory fashion brand reported slightly higher than expected increase in revenue and profit and its French women’s fashion brand, Comptoir des Cotonniers, fell short of plan, reporting a slight contraction in profit.
Its other French brand, Princesse tam.tam, offering corsetry, homewear, swimwear, and sportwear and US-based J Brand premium denim label both performed to plan, generating stable year on year performances during the quarter.