Uniqlo expects profits to climb within the year as pandemic recovery continues

Uniqlo owner Fast Retailing is expecting a continued recovery for its brand’s sales and profits in the year to August 2022.

It is predicting its operating profit to climb 8.4 per cent to 270 billion yen ($2.4 billion) in its 2021-22 fiscal year.

For its financial year ending in August Uniqlo reported 249 billion yen ($2.1 billion) in operating profit, topping the 245.7 billion yen it was forecasted to reach by analysts.

“Vaccinations are being carried out all over the world to control the spread of the disease, and the economy is growing in earnest,” Fast Retailing chief executive Tadashi Yanai said.

The company expects the effects of the pandemic will have lasting effects on results in the first interim of the fiscal year however will recover in the second half as shopping habits return to normal.

It also predicts that there will be negative kick back from the global production and logistic crisis that has plagued many fashion manufactures in recent months.

READ MORE: Nike losing out in China to rival sportswear brands as Xinjiang boycott continues

This is partly due to the number of factories which have been closed down in Vietnam due to spikes in Covid cases.

Fast Retailing runs around 800 Uniqlo stores on the Chinese mainland, about the same number as in Japan.

Yanai said the company carried out regular inspections of production sites and had built up a team to improve monitoring of how it gets raw materials for its clothes.

This comes after a number of clothing retailers suffered boycotts from Chinese consumers over their criticism over the alleged human rights violations of the country’s Uighur muslim population.

“In the future, we will ensure a higher level of traceability of the materials we procure, including the farmers who produce the raw goods,” Yanai said.

The company’s shares have fallen 22 percent this year to date, compared with a 4.1 per cent advance in the benchmark Nikkei 225 index.

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