Fast Retailing Gains After Profit Beats Analyst Estimates

Fast Retailing Co. rose to a record before closing little changed in Tokyo trading after Asia’s biggest clothing retailer reported first-quarter profit that topped analyst estimates.

The parent of Uniqlo Co. gained 0.8 percent to 44,760 yen at the close of trading, compared with the 0.2 percent advance in the benchmark Topix index. The shares jumped as much as 4.3 percent to 46,325 yen earlier, the highest level since its 1997 listing on the Tokyo Stock Exchange.

Net income surged 64 percent from a year earlier to 68.8 billion yen ($575 million) in the three months ended in November, the company said after the market closed Thursday. That compared with the 48.4 billion yen average of four analyst estimates compiled by Bloomberg. Profit rose as Fast Retailing sold more Uniqlo casual wear than expected and the yen weakened.

“Fast Retailing will see a big jump in domestic and overseas profit this year, which will certainly go beyond the company’s full-year forecast,” said Mikihiko Yamato, deputy head of research at JI Asia in Tokyo. He said he’s bullish on the company’s shares.

Fast Retailing, headed by Japan’s richest man Tadashi Yanai, projects a 34 percent increase in net income to 100 billion yen for the year ending in August as it speeds up the Uniqlo chain’s overseas expansion. The company reaffirmed the forecast yesterday.

Winter Sales

Sales at Uniqlo Japan, which accounted for 49 percent of Fast Retailing revenue in the first quarter, rose 12 percent as colder weather boosted demand for winter clothing.

The brand’s international sales leaped 47 percent, with greater-than-expected gains from stores in South Korea, China, Hong Kong and Taiwan, the retailer said. Fast Retailing’s overall sales in the September-November period rose 23 percent to 479.5 billion yen, it said.

Every 1-yen decline in the Japanese currency against the dollar increases the group’s net income by about 1 billion yen, Chief Financial Officer Takeshi Okazaki said at a briefing in Tokyo. A weaker yen boosts the value of repatriated earnings from overseas and foreign-currency assets such as cash.

Fast Retailing booked a financial gain of 15.3 billion yen in the fiscal first quarter as it holds part of its cash in dollars and other foreign currencies, Okazaki said.

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