Fast Retailing Jumps to Record as Japan Sales Surge: Tokyo Mover

Fast Retailing Co., Asia’s largest apparel retailer, surged to a record in Tokyo trading after saying warmer weather and an extra Sunday in March fueled the biggest monthly jump in Japan sales in more than three years.

The maker of Uniqlo brand casual clothes climbed 14 percent to 35,650 yen at the close in Tokyo trading. The benchmark Nikkei 225 Stock Average gained 3 percent.

Sales at stores open at least a year in Japan rose 23 percent as spring weather arrived earlier than usual and the month included one more Sunday than in 2012, the company said yesterday. Led by billionaire Tadashi Yanai, Fast Retailing has opened outlets in higher-end shopping areas including Tokyo’s Ginza to revive sales of Uniqlo, which started in Japan as a budget label about 30 years ago.

“This is an impressive showing, even taking into account the run of warm weather, and the calendar effect,” Hidehiko Aoki, an analyst at Bank of America Merrill Lynch, wrote in a note to clients before the market opened today. The additional Sunday added about 3 percentage points to sales growth, said Aoki, who raised his price objective for the shares to 34,400 yen and maintained a buy rating.

The sales increase was the biggest since October 2009, based on figures from the Yamaguchi, Japan-based company.

Fast Retailing in January increased its profit forecast to 87 billion yen ($929 million) for the year ending August as overseas sales rose. As part of efforts to revive its brand in Japan, which contributes about 77 percent of annual revenue, the company opened a 52,500-square-foot store in Ginza last year.

The apparel maker’s gains have widened the valuation gap with its bigger global rivals, a sign investors are betting on Yanai’s company to generate faster profit growth.

Fast Retailing trades at about 50 times earnings, compared with about 28 times for Arteixo, Spain-based Inditex SA and a multiple of 23 for Stockholm-based Hennes and Mauritz AB, according to data compiled by Bloomberg.

The stock has risen 63 percent this year, compared with a 19 percent increase for the Nikkei 225. Yanai, who controls about 46 percent of Fast Retailing, gained about $1 billion in holdings today, data compiled by Bloomberg show.

Fast Retailing was also the biggest gainer on the Nikkei 225 from 2006 to 2012, helping Yanai amass a net worth of $16.7 billion as of yesterday in New York, according to the Bloomberg Billionaires Index.