Four consecutive years of record highs! Uniqlo’s parent company forecasts a 13% increase in operating profit for fiscal year 2025 and raises its profit guidance for fiscal year 2026.

Four consecutive years of record highs! Uniqlo’s parent company forecasts a 13% increase in operating profit for fiscal year 2025 and raises its profit guidance for fiscal year 2026.

Fast Retailing, the parent company of Uniqlo, has set a profit record for the fourth consecutive year. Despite facing pressure from US tariffs, the company’s performance has been driven by a weak yen and a global expansion strategy.

The latest results for the 2025 fiscal year show that Fast Retailing’s operating profit reached 564.27 billion yen, up about 13% from the previous year, surpassing the company’s prior forecast of 545 billion yen and analysts’ average forecast of 546 billion yen, marking a record high for the fourth consecutive year. Operating profit from Uniqlo’s international business reached 309.32 billion yen, becoming the group’s largest source of profit.

The company also forecasts that operating profit for the new fiscal year ending August 2026 will reach 610 billion yen, higher than the analysts’ average forecast of 588 billion yen. This outlook reflects Fast Retailing’s confidence in its global expansion strategy and market prospects.

The weak yen has provided substantial support for the company’s performance. Currently, the yen is at its lowest level against the US dollar since February and has hit a historical low against the euro, which benefits the company’s overseas revenue conversion and attracts domestic duty-free shopping demand.

2026 Fiscal Year Forecast Fully Exceeds Expectations

Fast Retailing’s guidance for the 2026 fiscal year is comprehensively above market expectations. The company expects operating profit to reach 610 billion yen, higher than the analysts’ average forecast of 588.3 billion yen, marking a record high for the fourth consecutive year. Net profit is expected to be 435 billion yen, above the expected 425.39 billion yen.

In terms of revenue, the company expects net sales for fiscal 2026 to reach 3.75 trillion yen, significantly higher than the market expectation of 3.66 trillion yen. This expected growth rate reflects management’s confidence in the recovery of global market demand. The company expects to pay a dividend of 520 yen per share, far exceeding analysts’ expectations of 482.65 yen, demonstrating full confidence in cash flow and profitability.

Tadashi Yanai, the founder of Fast Retailing and Japan’s richest man, has long been committed to making the company the world’s largest fashion retailer. Yanai’s ultimate goal is to achieve annual sales of 10 trillion yen and transform Fast Retailing into a global apparel manufacturer. On this journey, the company needs to compete with global fashion giants such as Inditex, the parent company of Zara, and H&M.

International Business as Growth Engine, Japanese Business Stays Stable

Results for the 2025 fiscal year show that international business has become the group’s most important driver of growth. International business revenue reached 1.91 trillion yen, slightly above the market expectation of 1.9 trillion yen, accounting for 56% of the group’s total revenue.

The Chinese market performed particularly well, with revenue reaching 650.23 billion yen, making it the company’s largest single overseas market. Revenue from Korea, Southeast Asia, India, and Oceania reached 619.42 billion yen. Although the North America and Europe markets are relatively small in scale, they still achieved revenues of 271.13 billion yen and 369.51 billion yen respectively.

The Japanese business continues to provide stable cash flow and profit contribution to the group. Revenue in the Japanese market reached 1.03 trillion yen, slightly higher than the market expectation of 1.02 trillion yen. Operating profit from Japanese business reached 184.45 billion yen, surpassing analysts’ expectations of 178.43 billion yen.

Analysts believe that the weak yen has become an important driving force for Fast Retailing’s performance. In the domestic market, the tourism boom in Japan has driven a surge in duty-free shopping at domestic stores. In overseas markets, revenue from Western markets gets an additional boost when converted to yen.

Other Brands Face Challenges

Aside from Uniqlo, other brands under Fast Retailing performed unevenly. GU brand revenue was 330.7 billion yen, slightly lower than the market expectation of 332.78 billion yen, and operating profit of 30.51 billion yen also did not reach the expected 31.4 billion yen.

Global Brands business is facing greater challenges, posting an operating loss of 950 million yen, while the market had previously expected the business to achieve a profit of 855.1 million yen. This performance highlights the difficulties Fast Retailing faces in executing its multi-brand strategy.

In terms of inventory management, company inventory dropped to 510.96 billion yen, below the market expectation of 547.48 billion yen, reflecting a healthier operational status and demand forecasting ability.

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