Last Updated: 2015.07.09
Results Summary for the Nine Months to May 31, 2015
FAST RETAILING CO., LTD.
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Consolidated Business Performance
Performance by Group Operation 
Highlights: Fast Retailing Revenue and Profits Rise in Nine Months to May 2015
■FY2015 1Q-3Q: All three business segments report gains across the board
The Fast Retailing Group generated gains in both revenue and profit in the nine months from
September 2014 to May 2015. Revenue expanded 23.9% year on year to JP¥1.3481 trillion, and
operating profit increased 35.5% to ¥189.2 billion. All three business segments reported increases in
both revenue and profit, with UNIQLO International reporting especially strong gains in both
parameters. Profit before income taxes and profit attributable to owners of the parent both increased
by a greater margin than operating profit. This was due largely to the depreciation of the Japanese
yen over the nine months to May 31, 2015, which boosted the carrying amount of foreign-currency
denominated assets, generating net finance income of ¥21.0 billion.
■UNIQLO Japan: Strong same-store sales growth generates higher-than-expected gains
in revenue and profit
UNIQLO Japan reported further gains in revenue and profit in the third quarter from March to May
2015. Same-store sales continued strong, expanding 9.9% year on year on the back of buoyant
demand for Spring Summer ranges. The gross profit margin contracted 1.1% year on year after the procurement of some Spring Summer items at spot exchange rates boosted the cost of sales. However, the SG&A to revenue ratio improved by 0.9 point, helping to boost UNIQLO Japan operating profit by 11.2% year on year.
■UNIQLO International: Achieves expected gains in revenue and profit on consistent strength from Greater China and South Korea
Revenue and profit gains were in line with expectations in the third quarter from March to May 2015. Greater China (Mainland China, Hong Kong and Taiwan) and South Korea reported another strong performance, with increases in revenue and profit outstripping estimates. Conversely, sales and operating profit at UNIQLO USA both fell short of target in the third quarter, swelling that operation's overall loss. Operating profit margin for UNIQLO International segment was knocked slightly lower by a ¥2.0 billion loss on retirement of fixed assets linked to the refurbishment of global flagship stores in the UK and China.
■Global Brands: Reports higher-than-expected rises in revenue and profit, GU strong
Global Brands achieved higher-than-expected gains in revenue and profit in the third quarter March to May 2015. GU outperformed expectations to report significant gains in both parameters on the back of double-digit growth in same-store sales and an improved operating profit margin. By contrast, Theory fell short of target to report a decline in profits. J Brand reported persistent losses, despite a rise in revenue.
■FY2015 consolidated estimates: Expect a record performance
Group revenue: ¥1.65 trillion (+19.3% year on year), operating profit: ¥200.0 billion (+53.4%), profit before income taxes ¥211.5 billion (+56.1%), profit attributable to owners of the parent: ¥120.0 billion (+61.0%). This data would generate earnings per share of ¥1,177.41. Scheduled FY2015 annual dividend: ¥350 per share, divided equally into interim and year-end dividends of ¥175 each.
■UNIQLO Japan: Strong same-store sales growth generates higher-than-expected gains in revenue and profit
UNIQLO Japan generated stronger-than-expected increases in both revenue and profit in the nine months from September 1, 2014 to May 31, 2015. Revenue expanded to ¥638.1 billion (+12.0% year on year), and operating profit increased to ¥113.7 billion (+21.6%). Same-store sales expanded a strong 8.8% year-on-year during the nine-month period. In addition, operating profit increased significantly, thanks to a 1.0 point improvement in the gross profit margin and a 0.6 point fall in the selling, general and administrative expenses to revenue ratio.
The strong rise in same-store sales at UNIQLO Japan was largely attributable to firm sales of core Fall Winter ranges such as HEATTECH and Ultra Light Down, followed by strong sales of Spring Summer ranges such as bottom wear and AIRism innerwear.
The total number of UNIQLO Japan directly-run stores, excluding the 30 franchise outlets, decreased by 27 to 814 stores at the end of May 2015, reflecting our "scrap and build" strategy to increase average store size by replacing smaller, less efficient stores with larger ones. Of these 27, 9 were converted from directly-run stores to employee-franchise outlets.
■UNIQLO International: Achieves expected gains in revenue and profit on consistent strength from Greater China and South Korea
UNIQLO International reported increases in both revenue and profit that were roughly in line with our expectations for the nine months from September 1, 2014 to May 31, 2015. Revenue increased to ¥481.8 billion (+47.0% year on year), and operating profit expanded to ¥51.9 billion (+55.0%). Within the UNIQLO International framework, Greater China (Mainland China, Hong Kong, and Taiwan) and South Korea reported higher-than-expected increases in revenue and profit thanks to continued strong growth in same-store sales in the third quarter from March to May 2015. The total number of UNIQLO International stores expanded to 767 stores at the end of May 2015, a net addition of 169 stores compared to the end of May 2014.
Breaking down the UNIQLO International results into individual operations, UNIQLO Greater China exceeded expectations in terms of revenue and profit growth in the nine months to 31 May 2015. During that time, the operation opened 78 new stores and closed 10 stores, bringing the total number of UNIQLO stores in Greater China to 442 at the end of May 2015. UNIQLO South Korea also reported higher-than-expected increases in revenue and profit. Profits at UNIQLO Europe (United Kingdom, France, Russia and Germany) declined in the third quarter after the 311 Oxford Street global flagship store closed for refurbishment from March. However, UNIQLO Europe did report a rise in revenue and profits for the full nine-month period through to the end of May 2015. Operating losses expanded at UNIQLO USA after persistently sluggish sales led to greater discounting. While slightly below target, UNIQLO Southeast Asia (Singapore, Malaysia, Thailand, the Philippines and Indonesia) did report rises in both revenue and profit. Meanwhile, UNIQLO's operation in Australia performed roughly to plan.
■Global Brands: Reports higher-than-expected rises in revenue and profit, GU strong
Global Brands reported stronger-than-expected increases in revenue and profit in the first nine months of fiscal year 2015. Revenue increased to ¥225.9 billion (+19.6% year on year) and operating profit expanded to ¥19.7 billion (+37.8% year on year). Our low-priced GU fashion casualwear brand exceeded our expectations by reporting significant increases in both revenue and profit. Powerful advertising campaigns for winter items such as skirts, knitwear items and winter outerwear, and then summer items such as gaucho pants and our "yurukire" comfortable but elegant ranges all generated strong sales. This helped boost GU's same-store sales and operating profit margin. By contrast, the Theory fashion label fell short of our target, reporting a contraction in profits on the back of the continued slump in the US luxury market. Our Comptoir des Cotonniers label and Princesse tam.tam label reported flat year-on-year performances. Finally, J Brand reported persistent operating losses, despite a rise in revenue.
■FY2015 consolidated estimates: Expect a record performance
In fiscal 2015, Fast Retailing expects to achieve consolidated revenue of ¥1.65 trillion (+19.3% year on year), operating profit of ¥200.0 billion (+53.4%), earnings before income tax of ¥211.5 billion (+56.1%) and profit attributable to owners of the parent of ¥120.0 billion (+61.0%). This data translates into earnings per share of ¥1,177.41.
The Fast Retailing Group expects its global store network will expand by 229 to 2,982 stores by the end of August 2015. That figure includes 840 UNIQLO Japan direct-run and franchise stores (-12 versus end August 2014), 801 UNIQLO International stores (+168), and 1,341 Global Brands stores (+73).
We plan to deliver an annual dividend of ¥350 per share in fiscal 2015, split evenly into interim and year-end dividends of ¥175 each.
Fast Retailing Co., Ltd. discloses business results data and offers a variety of press releases on its IR website https://www.fastretailing.com/eng/ir/.
