Uniqlo's robust sales prompt Fast Retailing to boost outlook(70272)

Fast Retailing Raises Forecast as Thermal Wear Boosts Uniqlo

Fast Retailing Co., Japan s largest clothing retailer, raised its full-year profit forecast 8.9 percent as demand for Heattech thermal wear and fleece sweaters drives sales at its Uniqlo chain.

Net income may be 67.5 billion yen ($723 million) in the 12 months ending August, compared with its earlier estimate of 62 billion yen, the company said in a statement today. It posted a 49.8 billion yen profit a year earlier.

Hit products such as the +J line overseen by German designer Jil Sander led to a 40 percent surge in first-quarter sales, defying a slump in Japanese household spending amid job losses and falling wages. Chief Executive Officer Tadashi Yanai, Japan s richest man, is expanding Uniqlo overseas with store openings in Europe, the U.S. and Asia.

No one can follow Fast Retailing, Yasuhiro Matsumoto, a senior analyst at Shinsei Securities Co. in Tokyo. Uniqlo clothes are fashionable and attractive so they don t bore customers.

The retailer, which competes with Inditex SA s Zara and Hennes & Mauritz AB s H&M brands, raised its full-year sales forecast to 820 billion yen from an earlier estimate of 798 billion yen.

Japan Sales

Fast Retailing raised its full-year forecast for its Uniqlo s same-store sales in Japan to a 6.2 percent increase from 3 percent.

Fast Retailing doubled Asian stores outside Japan last quarter, opening 11 stores in China and 13 in South Korea. The +J brand also helped boost Uniqlo sales in the U.K., the company said.

Fast Retailing rose 1.4 percent to 16,900 yen at the 3 p.m. close on the Tokyo Stock Exchange before the company released earnings. The stock rose 35 percent last year, outperforming a 19 percent increase in the benchmark Nikkei 225 Stock Average. Fast Retailing surged 63 percent in 2008.

First-quarter net income increased 57 percent to 34.9 billion yen, with sales of 263.5 billion yen from 188.5 billion yen a year earlier.

Domestic sales at Uniqlo stores open at least a year surged more than 30 percent in September and October and gained 7.9 percent in November. The company had 770 directly operated stores in Japan at the end of last month.

The company s performance contrasts with other Japanese retailers. Seven & I Holdings Co., operator of the 7-Eleven convenience-store chain, and Aeon Co., the biggest-supermarket operator, both posted declines in nine-month revenue yesterday.

Seven & I profit slumped 32 percent and Aeon post a nine- month loss as lower wages sapped demand for clothes and food in Japan.

Uniqlo's robust sales prompt Fast Retailing to boost outlook

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