April 12 (Bloomberg) -- Fast Retailing Co., Asia’s largest clothing retailer, raised its forecast for annual profit as the seller of Uniqlo branded apparel benefits from a weakening yen.
Net income will probably be 91.5 billion yen ($918 million) for the year ending August, higher than its previous forecast of 87 billion yen, the Yamaguchi, Japan-based company said yesterday in a statement. Operating profit for the overseas Uniqlo business rose 40 percent for the six months ended February, while declining 4.5 percent domestically amid a price cut.
Billionaire Tadashi Yanai’s casual clothes maker has opened new stores, including one in Tokyo’s Ginza shopping district, under a plan to revamp the Uniqlo brand’s utilitarian image. Fast Retailing posted a 13 percent gain in net income to 65.4 billion yen for the six months, aided by a 11.1 billion yen gain from favorable currency exchange.
The stock traded 0.9 percent lower to close at 34250 yen in Tokyo trading today. Lower profitability in the domestic business provided a “negative surprise,” Credit Suisse analyst Taketo Yamate said in a note today.
The clothing maker’s outlook for the year ending August assumes an exchange rate of 82 yen per dollar, it said. The yen touched 99.88 on April 10, the weakest since April 14, 2009.
The Bank of Japan this month said it will double the monetary base by the end of 2014 through buying government bonds. The Japanese currency has lost about 19 percent against the U.S. dollar over the past 12 months.
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