TOKYO (Reuters) – The Japanese operator of the global Uniqlo clothing chain said on Thursday that first-quarter operating profit rose 7.4%, a solid start to its plan to achieve record profits for a fourth-straight year.
Fast Retailing said operating profit was 157.6 billion yen ($996.84 million) in the three months through November.
That compares with 146.7 billion yen a year earlier, but it was slightly below a LSEG consensus forecast of 160 billion yen drawn from six analysts.
Fast Retailing maintained its full-year operating profit forecast of 530 billion yen, following record earnings of 500.9 billion yen last year.
Known for inexpensive, durable fleeces and cotton shirts, Fast Retailing has long been regarded as a bellwether for consumer spending in Japan and more recently China, where it has more than 900 Uniqlo stores on the mainland.
Domestic sales have gotten a boost from a surge in duty-free shopping amid a tourism boom in Japan fuelled by a weak yen.
But sales growth has cooled in China, prompting the company to scale back store openings and adopt a scrap-and-build strategy to turn around underperforming locations with redesigned stores.
Improved profit margins and international brand awareness helped drive last year’s record results.
In its home market, it has also become a pace-setter for wages in the service industry.
Keen to retain good workers, Fast Retailing said on Wednesday it will institute an aggressive increase in employee pay in Japan – one that follows on from a hike in 2023 that helped shake up the nation’s long moribund wage outlook.
Wages for full-time headquarters and sales staff will rise by as much as 11% from March, while annual salaries for new employees will increase by about 10%, the company said.
($1 = 158.1000 yen)