Japan’s Fast Retailing expects a continued recovery in sales and profits in the year to August 2022 as the pandemic abates, the operator of clothing brand Uniqlo said on Thursday.
The company said it expects operating profit to climb 8.4% to 270 billion yen ($2.4 billion) in its 2021-22 fiscal year.
For the year ended in August, it reported 249 billion yen in operating profit, topping the 245.7 billion forecast in a Refinitiv poll of 13 analysts.
Uniqlo International recorded a significant increases in both revenue and profit in fiscal 2021, with revenue rising to 930.1 billion yen (+10.2% year-on-year) and operating profit expanding to 111.2 billion yen (+121.4% year-on-year). Despite the pandemic, the European market has been able to greatly improve profitability with reforms to its earnings structures, including closing unprofitable stores, reducing fixed costs, and normalising inventory levels.
“Vaccinations are being carried out all over the world to control the spread of the disease, and the economy is growing in earnest,” CEO Tadashi Yanai told Reuters.
The company said it expects some negative effects from production or logistic delays, problems that have plagued major fashion brands and their global supply lines in recent months. In September, Uniqlo announced that some clothing releases would be delayed due to pandemic-related lockdowns at partner factories in Vietnam.
Looking forward, Fast Retailing expects the pandemic will still drag on results in the first half of the fiscal year but will then recover in the second half as shopping habits return to normal.
The company’s shares have fallen 22% this year to date, compared with a 4.1 percent advance in the benchmark Nikkei 225 index.