Japanese clothing brand Uniqlo noted operating profits were higher than pre-pandemic levels in first quarter, boosted by China's resurgence and strong demand for stay-at-home clothes like jogging pants and loungewear. But Fast Retailing said it was hard to predict the impact of the pandemic beyond the next several months, an uncertainty some analysts said could limit further gains in the shares, which hit record highs ahead of the results.
Fast Retailing has widely been viewed as one of the most resilient retailers during the pandemic, despite suffering a hit in the early days from its dependence on China for both manufacturing and sales. The company runs about 800 Uniqlo stores in Mainland China, roughly the same number as in its home market, Japan.
Full-year estimate of the company is of ¥245 billion in operating profit on ¥2.2 trillion in sales. Fast Retailing's operating profit in the three months through November rose to ¥113.1 billion ($1.09 billion), up 23 per cent from a year earlier. Uniqlo's focus on China and Japan helped it escape the worst of a global retail downturn from the crisis, which has hit other markets such as the United States and Europe harder.
The company cited a large profit gain in mainland China in the quarter, helped by strong demand for warm clothing and growth in margin-boosting online sales. Both Uniqlo and cheaper sister brand GU have also benefited from strong demand for comfortable clothes, such as loose-fitting T-shirts and stretchy pants as more people work from home.
A sell-out collection with German label Jil Sander, priced above Uniqlo's average range, also helped bolster business in Japan during the quarter, boosting spending per customer by nearly 7 per cent.