Fast retailing suffered a HK$700 million loss last quarter
Fast retailing (06288), the parent company of UNIQLO, posted a loss of HK$700 million last quarter, recording an operating deficit in overseas markets. Although the Greater China business returned to growth in May, the Group decided to further lower its consolidated revenue and earnings forecasts.
The Fast Retailing Group’s revenue and profit declined in the first half of fiscal 2020. Consolidated revenue totaled 1.2085 trillion yen (−4.7% year-on-year), and operating profit totaled 136.7 billion yen (−20.9% year-on-year).
This weaker performance was caused primarily by significant reductions in revenue and profit at UNIQLO International segment (South Korea, Mainland China, Hong Kong, and Taiwan), which were adversely impacted by COVID-19 and other factors.
Among the 813 UNIQLO stores in Japan, the number of temporarily closed stores was as high as 311 at once, but the stores started to resume business in mid-May, and revenue rebounded significantly in June.
For overseas UNIQLO, third-quarter earnings plunged 45% to just 132.2 billion yen (about HK$9.55 billion). The company also recorded an operating deficit of 1.4 billion yen (about HK$101 million).
Fortunately, the Greater China region has returned to growth at a faster-than-expected pace, achieving revenue and profit growth in May.
Fast Retailing decided to revise downward full-year forecast indicators, an estimated full-year comprehensive income of 1.99 trillion yen at the end of August this year (approximately HK$144 billion), down 13.1% year-on-year.
The Group said that despite the impact of the outbreak and the impairment loss recorded in the first three quarters and the additional impairment loss expected in the fourth quarter risk, it will maintain its full-year dividend forecast of 480 yen (approximately HK$34.7) per share.