Fast Retailing hits record high in Q3 as Uniqlo powers on abroad

Japan's Fast Retailing on Thursday reported a record high quarterly operating profit, in a sign the owner of clothing chain Uniqlo was reaping the benefits of a push to expand its overseas sales.

The retailer, which is chasing the top spot in worldwide apparel sales, flagged its ambitions last week when tennis star Roger Federer strode onto the court at Wimbledon in Uniqlo-branded whites, in a sponsorship deal reportedly worth around $30 million annually.

For the quarter ended May, Fast Retailing's operating profit was ¥68.4 billion ($609.41 million), up 37% from a year ago and above an average ¥59.1 billion estimate from four analysts polled by Thomson Reuters I/B/E/S. Results were driven by overseas Uniqlo sales that topped domestic sales for a third consecutive quarter.

Fast Retailing, already Asia's biggest clothing retailer, reiterated its full-year operating profit view of ¥225 billion. Analysts expect better at ¥228.8 billion.

The company's international sales rose 28% and overseas operating profit jumped 65% in the nine months to May, driven mainly by Asian sales of Uniqlo that offers everything from T-shirts emblazoned with robot cat Doraemon designs to office wear such as shirts and blazers.

Fast Retailing, which is expanding Uniqlo's presence in Europe, recently said Denmark would be its ninth country of operation in the region.

Uniqlo's business is growing at home too, despite store numbers plateauing in recent years at just over 800 locations, with sales up 8% in the first nine months of the year. Uniqlo's online sales in Japan were up 33%, accounting for 7.8% of its total domestic sales.

Fast Retailing is determined to grow Uniqlo in the domestic market without using third-party sites, in contrast with another of Japan's top apparel chains, Shimamura Co Ltd, which has just started selling on the Zozotown online mall.

At its low-cost chain GU, sales rose 6% in the nine months to May. Fast Retailing has ambitions to turn GU into a second Uniqlo but has struggled to replicate earlier hits such as ¥990 jeans. Discounting at the chain saw operating profit fall 20% in the three months to May.