TOKYO: Fast Retailing Co.’s profit fell short of analyst estimates as a weaker performance in Japan overshadowed a strong showing in its overseas markets, particularly China.
Operating profit rose to 74.8 billion yen ($692 million) in the three months ended May 31, according to a statement Thursday from Asia’s largest retailer. That compares with analysts’ average estimate of 79.4 billion yen.
The results show Japan’s domestic market still has a huge influence on Fast Retailing’s fortunes. Domestic results were weighed down as the company shifted a sales event to June.
China continues to be one of the main engines driving overseas expansion, with sales in the country rising in the double digits. Uniqlo so far hasn’t been hurt by the trade war between the U.S. and China, and sales there were strong even in the face of a weaker yuan.
GU, Fast Retailing’s lower-price brand, is making a bigger impact on results. The segment has been speeding up overseas expansion and ramping up advertising efforts toward younger shoppers, which has helped boost the business.
Fast Retailing shares have been on a tear this year, jumping 20%, compared with a 5.7% increase in the benchmark Topix Index.
The stock rose 1.2% to an all-time high on Thursday in Tokyo before earnings were released. - Bloomberg