By Eimi Yamamitsu
(Reuters) -Uniqlo parent Fast Retailing Co Ltd reported a 16% jump in first-half profit and lifted its outlook for the full year on Thursday, as the Japanese retailer saw a fledgling recovery in China and strong sales growth in Europe and North America.
Uniqlo, a clothing giant known for fleece jackets, low-key sweaters and button-down shirts, has become a bellwether for global retailers in China, where it has around 900 stores, making it Fast Retailing’s biggest foreign market and surpassing the number of stores in Japan.
The results could give some relief to investors concerned about how China’s long COVID-19 lockdowns have taken a toll on the world’s second-biggest economy and the multi-nationals doing business there.
After a “substantial decline” in first-quarter revenue and profit in mainland China, Uniqlo operations began to recover in January, resulting in a sharp increase in second-quarter profit there, Fast Retailing said in a statement.
“Performance for mainland China is now on a recovery track,” the company said.
It said operating profit was 220 billion yen ($1.65 billion) in the six months through February, against 189 billion yen a year earlier, as Southeast Asia, North America and Europe logged strong revenue growth.
Fast Retailing raised its full-year profit forecast to 360 billion yen from 350 billion yen forecast in January. That compared with a consensus forecast for annual profit to total 347 billion yen, according to a Refinitiv poll of 14 analysts.
Japan’s biggest retailer logged a 2% fall for the first quarter ending November as COVID-19 restrictions in China were a drag on growth.
($1 = 133.3200 yen)
(Reporting by Eimi Yamamitsu; Editing by Muralikumar Anantharaman and David Dolan)
