Fast Retailing Drops After Forecasts Cut on Warm Weatherby
Clothing Retailer plans to launch spring product lineup early
Uniqlo U.S. continued to post loss, China missed target
Fast Retailing Co. fell by the most in three months after cutting full-year earnings forecasts as unseasonably warm weather worldwide hurt sales of winter clothes for the retailer’s Uniqlo brand of casual wear.
Operating profit will probably be 180 billion yen ($1.5 billion) in the year ending August 2016, the Yamaguchi, Japan-based company said Thursday. That compares with the company’s projection of 200 billion yen made in October.
The stock fell 2.3 percent to close at 38,140 yen, the lowest level since October 2014, after plunging as much as 7.4 percent in Tokyo trading. The benchmark Topix index lost 0.7 percent.
“Lingering concerns over sales may mean it is a while before the shares rebound,” Kuni Kanamori, an analyst at SMBC Nikko Securities Inc., wrote in a note after the results. “We maintain our somewhat cautious stance on the company as issues remain concerning changes in fashion trends and the balance between price revisions and improved quality.”
Fast Retailing Co. will launch its spring clothing lineup earlier and introduce products that are less “weather-sensitive,” Chief Financial Officer Takeshi Okazaki told a briefing held in Tokyo on Thursday.
It reported operating profit fell 17 percent to 75.9 billion yen in the three months ended in November, worse than the average estimate of 84.2 billion yen from three analysts compiled by Bloomberg. Sales in the company’s fiscal first quarter rose 8.5 percent to 520.3 billion yen.
Uniqlo Japan’s first-quarter operating profit slumped 12 percent while that for the brand’s international unit dropped 14.2 percent as its U.S. business continued to post losses, according to Fast Retailing. The brand also missed targets in Greater China and South Korea, the company said. Still, China’s economic slowdown hasn’t affected its business, CFO Okazaki said.