Uniqlo parent Fast Retailing has cut its annual operating forecast amid heavy discounting to offload winter clothes.
The apparel company has struggled with a shortage of popular winter items in the past, and overcompensated last winter by ordering too much inventory.
The unseasonably warm weather hit sales of winter clothes which led to the decline of Fast Retailing’s first quarter profit.
The company is undergoing the biggest revamp of its logistics and supply chain network to resolve the challenge it faced over winter.
The Japanese retailer said it now expects an operating profit of ¥260 billion (A$3.2 billion) for the financial year through August, compared to its previous forecast of ¥270 billion in January. The revised outlook would still be a record high and represent a 10 per cent year-on-year rise.
For the quarter ending February, Fast Retailing posted a double-digit increase in sales and profit in China, which has helped the brand turn in a better-than-expected rise in operating profit to ¥68 billion.
The company reported declines in both revenue and profit in the first half of fiscal 2019, with revenue totaling ¥491.3 billion yen, down 5 per cent from the previous corresponding period, and operating profit totaling ¥67.7 billion yen, down 23.7 per cent from the previous year.
First-half same-store sales, including online sales, declined 9 per cent.
Online sales, which now account for 9.9 per cent of Uniqlo sales in Japan and 20 per cent in China, rose 30.3 per cent in the first half.
