Uniqlo owner Fast Retailing posts record annual profit, beats forecasts, eyes top spot

Fifth straight record profit

Fast Retailing, the owner of Uniqlo, booked its fifth consecutive record annual profit on Thursday, 8 October, citing strong results in all regions and overcoming the effects of a weak yen at home. Operating profit rose about 32% to 743.13 billion yen ($4.70 billion) in the 12 months ended 31 August, up from 564.3 billion yen in the prior period. That beat the company's own forecast of 730 billion yen and the 726.45 billion yen average estimate from 16 analysts polled by LSEG. Net profit attributable to the group reached 542.52 billion yen, up 25.3% on the previous year, according to Europa Press. Revenue reached 3.96 trillion yen, with growth reported as 16.6% by Europa Press, 16% by Courrier international and 17% by Bloomberg. The company has beaten quarterly expectations throughout the year and repeatedly raised its profit guidance.

Weak yen and a higher forecast

Management warned that the weak yen was making conditions more difficult in Japan, where higher import costs are expected to weigh on fourth-quarter results and lead to price increases. For the year ending August 2027, Fast Retailing forecasts operating profit of 830 billion yen. Europa Press reports a sales forecast of 4.45 trillion yen, up 12.3%, and a net profit forecast of 560 billion yen, up 3.2%. Uniqlo sales in Japan reached 1.08 trillion yen in the year, up 5.3%, while international sales reached 2.4 trillion yen, up 26.3%. The company expects 3,545 stores by the end of August 2027, including 782 Uniqlo Japan stores (franchises included), 1,752 Uniqlo International stores, 490 GU stores and 521 Global Brands stores.

Overseas expansion and China

North America and Europe have been the strongest overseas markets, while mainland China remains sluggish because consumers are still reluctant to spend. Fast Retailing operates nearly 900 Uniqlo shops in China, its biggest foreign market, but store numbers there have levelled off as the company closes underperforming locations and replaces them with newer, larger shops. Uniqlo had 95 stores in Europe as of May, 30 of them in France, and Fast Retailing plans to open 15 a year on the Continent, according to Nihon Keizai Shimbun. Dairo Murata, a JP Morgan analyst, described the room for growth in market terms.

Its market share in the apparel sector in Europe and the United States is below 1%, which means there is significant room for growth.

Online retail is eating into standard Uniqlo outlets, so the group is focusing on massive, multi-level stores that act as destinations in their own right. Uniqlo now has more than 2,500 locations worldwide, starting from a single store in Hiroshima in 1984. Yanai told Nikkei in August that the company plans to double its flagship stores in Japan to 20 over the next decade.

Race with Inditex and H&M

Founder Tadashi Yanai has long said he wants Fast Retailing to become the world's top clothing retailer, putting it in direct competition with Inditex and H&M. Bloomberg reports Yanai's long-term target of 10 trillion yen in sales. Courrier international, citing Asahi Shimbun, says Fast Retailing is set to overtake H&M as the second-largest apparel group, with H&M's results due in November and its latest sales running below 2025 levels. H&M reported 20.3 billion euros in its previous fiscal year. Inditex, owner of Zara, reported 39.86 billion euros of sales in 2025 and would remain ahead of Fast Retailing in that scenario.