Fast Retailing, the Japanese company that owns global clothing brand Uniqlo, has revised its full-year forecast, indicating yet another year of record growth. This comes on the back of a stronger-than-expected surge in quarterly earnings, attributed to international expansion.
Fast Retailing reported a 29.4 per cent increase in its operating profit for the quarter ending February, reaching 189.8 billion yen (US$1.19 billion). This impressive figure outperformed the average estimate of 161.6 billion yen. As a result, the company has revised its full-year operating profit forecast upwards to 700 billion yen. This puts the retailer in line for a fifth consecutive year of record earnings.
Fast Retailing stated that it does not anticipate any significant repercussions from the Middle East crisis on its production and logistics for its fiscal 2026 year. The company’s second quarter had ended just before the commencement of US-Israeli airstrikes on Iran. This conflict has been instrumental in causing a rise in oil prices and disrupting supply chains. Investment and trading circles are currently on high alert due to uncertainties regarding a potential permanent peace agreement.
Investors will be closely monitoring how the Iran crisis may influence the expense for Uniqlo, a brand renowned for its affordable clothing basics, including many items made with polyester. Fast Retailing’s shares in Tokyo closed down by 0.5 per cent before these results, but have escalated by more than 18 per cent in 2026.
Teijin Frontier, a supplier to the company based in Japan, announced recently that it will increase its polyester fiber prices by 20 per cent due to rising oil costs. This echoes warnings from European retailers that a drawn-out Middle East conflict could inflate prices and impact consumer demand.
Fast Retailing, with its nearly 900 stores in Japan and mainland China, serves as a benchmark for consumer expenditure in these areas. From its origin as a single store in Japan’s Hiroshima city in 1984, Uniqlo now has a presence in over 2500 global locations. The brand has been aggressively expanding in Europe and North America, aiming to diversify its reach beyond China, its largest overseas market.
The company’s North American and European operations have seen an annual sales growth of 30-50 per cent since fiscal 2022. Anticipated annual revenue from these regions is projected to reach 3 trillion yen each over the medium term. Meanwhile, a tourism surge driven by a weak yen has bolstered the company’s domestic sales in Japan. However, growth in China has decelerated due to weak consumer sentiment, leading to store closures and restructuring.
On China, Fast Retailing’s CFO Takeshi Okazaki commented: “We’re pushing forward with structural reforms … I think it’s fair to interpret that the results are now beginning to show in our performance.”
What is Fast Retailing’s revised full-year operating profit forecast?
Fast Retailing has increased its full-year operating profit forecast to 700 billion yen.
How might the Middle East crisis influence costs for Uniqlo?
If the Middle East crisis leads to sustained high oil prices, the cost of polyester and air freight could increase, potentially impacting Uniqlo’s production costs.
What are Fast Retailing’s plans for structural reforms in China?
CFO Takeshi Okazaki did not detail specific reforms but expressed optimism about the positive impact of ongoing changes on the company’s performance.
