Uniqlo owner’s stock hits record as shoppers go casual in pandemic

Bloomberg

Fast Retailing Co’s lineup of functional and casual attire continued to lure value-conscious shoppers whose preferences are changing in the midst of the Covid-19 pandemic, helping to push the Uniqlo operator’s
first-quarter earnings close to an all-time high.
Operating profit rose 23% to 113.1 billion yen ($1.1 billion) in the three months ended on November 30, according to a company statement. That beat analysts’ average estimate of 101.5 billion yen, and comes just below Fast Retailing’s record quarterly results of 113.9 billion yen two years earlier. Sales for the quarter, however, fell 0.6% to 619.8 billion yen.
The Japan market is holding up despite the uncertainty of the pandemic, which has created another state of emergency for much of the country.
The company’s lineup of casual and functional clothing has attracted more value-conscious customers, resulting in higher same-store sales at Uniqlo’s Japan shops for each month of the quarter.
“Consumers are now thinking of Uniqlo first when they need clothing, and that’s helped our revenue,” said Chief Financial Officer Takeshi Okazaki at a briefing.
“But with the spreading coronavirus especially affecting footfall in urban areas, there’s still challenges ahead.”
Okazaki added that better product mix, marketing and collaboration lines in Japan, such as one with designer Jil Sander, helped sales. E-commerce sales in Japan rose 48% in the quarter, accounting for 15% of total sales in the country.
While Fast Retailing left its full-year forecast unchanged, and said the recent spike in coronavirus cases remains a concern, it sees the latest quarter’s momentum continuing through the first half of the year, spurred by strong Uniqlo results in China.