The Japanese owner of clothing brand Uniqlo said on Thursday that quarterly profit rose 45.7%, as it weathered the impact on supply chains and logistics from the Iran war on its way to an expected fifth straight year of record earnings.
Fast Retailing said its operating profit was 213.79 billion yen ($1.32 billion) in the three months through May. That compared with 146.74 billion yen for the same period a year earlier and was well above the 177.73 billion yen average of seven analyst estimates compiled by LSEG.
The company raised its full-year operating profit forecast to 730 billion yen from 700 billion yen.
Fast Retailing is widely seen as a bellwether for consumer spending in Japan and mainland China, where it has almost 900 stores.
From a single store in the western Japanese city of Hiroshima in 1984, there are now more than 2,500 Uniqlo locations across the globe, selling inexpensive fleeces and cotton shirts made primarily in Asian manufacturing hubs.
In recent years, the franchise has been rapidly expanding in Europe and North America as it looks beyond China, its largest overseas market.
Fast Retailing's Japanese sales have been supported by a tourism boom driven by a weak yen, now hovering near a 40-year low, while growth in China has slowed due to weak consumer sentiment, prompting store closures and restructuring.
Global fashion retailers are grappling with disruptions to supplies and logistics from the Middle East conflict as well as the effect of dramatic weather on clothing demand.
Fast Retailing CFO Takeshi Okazaki said in April that the Iran war was complicating air freight from production bases in Southeast Asia and that sustained increases in oil prices could impact costs for synthetic fibres.
Blistering heat waves have hit Europe and North America this year, prompting Swedish retailer H&M to say it is changing its product line-up and marketing calendar to account for longer, hotter summers.
($1 = 162.3200 yen)
(Reporting by Rocky Swift in Tokyo; Editing by Sonali Paul, Muralikumar Anantharaman and Kim Coghill)
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