A record for four consecutive years! Uniqlo's parent company expects a 13% increase in operating profit for fiscal year 2025 and raises the profit guidance for fiscal year 2026

Fast Retailing, the parent company of Uniqlo, has set a profit record for the fourth consecutive year, despite facing tariff pressures in the United States, driven by a weak yen and a global expansion strategy that boosted performance.

The latest financial results for the fiscal year 2025 show that Fast Retailing's operating profit reached 564.27 billion yen, a year-on-year increase of approximately 13%, exceeding the company's previous expectation of 545 billion yen and the average analyst expectation of 546 billion yen, marking a historical high for the fourth consecutive year. The operating profit from Uniqlo's international business reached 309.32 billion yen, becoming the largest profit contributor to the group.

The company also forecasts that operating profit for the new fiscal year ending August 2026 will reach 610 billion yen, higher than the average analyst expectation of 588 billion yen. This forecast reflects Fast Retailing's confidence in its global expansion strategy and market outlook.

The weak yen has provided significant support for the company's performance, with the yen currently at its lowest exchange rate against the US dollar since February and hitting a historical low against the euro, which benefits the company's overseas revenue conversion and attracts domestic duty-free shopping demand.

Fiscal Year 2026 Expectations Exceed Expectations

Fast Retailing's performance guidance for fiscal year 2026 significantly exceeds market expectations. The company expects operating profit to reach 610 billion yen, higher than the average analyst expectation of 588.3 billion yen, marking a historical high for the fourth consecutive year. The net profit expectation is 435 billion yen, exceeding the expected 425.39 billion yen.

In terms of sales revenue, the company expects net sales for fiscal year 2026 to reach 3.75 trillion yen, significantly higher than the market expectation of 3.66 trillion yen. This expected growth rate reflects management's confidence in the recovery of global market demand. The company expects to distribute a dividend of 520 yen per share, far exceeding the analyst expectation of 482.65 yen, demonstrating strong confidence in cash flow and profitability.

Fast Retailing's founder, Tadashi Yanai, as Japan's richest person, has long been committed to transforming the company into the world's largest fashion retailer. Yanai's ultimate goal is to achieve annual sales of 10 trillion yen, transforming Fast Retailing into a global clothing manufacturer. In this journey, the company needs to compete with global fashion retail giants such as Inditex, the parent company of Zara, and H&M.

International Business Becomes Growth Engine, Domestic Business Remains Stable

The financial results for fiscal year 2025 indicate that the company's international business has become the most important growth driver for the group. International business revenue reached 1.91 trillion yen, slightly exceeding the market expectation of 1.9 trillion yen, accounting for 56% of the group's total revenue.

The performance in the Chinese market is particularly outstanding, with revenue reaching 650.23 billion yen, making it the company's largest single overseas market. Revenue from South Korea, Southeast Asia, India, and Oceania reached 619.42 billion yen. Although the North American and European markets are relatively smaller, they achieved revenues of 271.13 billion yen and 369.51 billion yen, respectively The Japanese business continues to provide stable cash flow and profit contributions to the group. Revenue from the Japanese market reached 1.03 trillion yen, slightly above the market expectation of 1.02 trillion yen. Operating profit from the Japanese business reached 184.45 billion yen, exceeding analysts' expectations of 178.43 billion yen.

Analysts believe that the weak yen has become an important driving force for Fast Retailing's performance. In the domestic market, the tourism boom in Japan has driven a surge in duty-free shopping at domestic stores. In the overseas market, the company's revenue from Western markets received an additional boost when converted to yen.

Other Brands Facing Challenges

Apart from Uniqlo, other brands under Fast Retailing have shown mixed performance. Revenue from the GU brand was 330.7 billion yen, slightly below the market expectation of 332.78 billion yen, and operating profit of 30.51 billion yen also fell short of the expected 31.4 billion yen.

The Global Brands business faces greater challenges, reporting an operating loss of 950 million yen, while the market had previously expected this business to achieve a profit of 855.1 million yen. This performance highlights the difficulties Fast Retailing faces in executing its multi-brand strategy.

In terms of inventory management, the company's inventory decreased to 510.96 billion yen, below the market expectation of 547.48 billion yen, reflecting a healthier operating condition and demand forecasting capability