Fast Retailing's Uniqlo sign boards are displayed at a casual clothing store in Tokyo, Japan January 11, 2023. REUTERS/Issei Kato/File Photo Acquire Licensing Rights
TOKYO, Oct 11 (Reuters) - The Japanese operator of global clothing chain Uniqlo is expected to blow past last year's record profit when it reports results on Thursday, benefiting from a recovery in China and the yen's slide. Characteristics Of Borosilicate Glass
Fast Retailing (9983.T) reported record third-quarter earnings in July and raised its full-year forecast as business in China, its largest overseas market with more than 900 stores, recovered from a pandemic-led slowdown.
Operating profit for the fiscal year through August is expected to rise 26% to 374.6 billion yen ($2.52 billion), according to the average estimate of 12 analysts collected by LSEG.
The company has forecast 370 billion yen, which would far exceed last year's 297.3 billion yen.
Fast Retailing, founded by Japan's richest man Tadashi Yanai, is a bellwether for retailers operating in China, the world's second-biggest economy, where sales have started to rebound after strict COVID-19 controls were rolled back.
The yen, meanwhile, has weakened about 12% versus the dollar so far in 2023, giving a boost to Japanese companies that get most of their sales outside of the country.
Consensus estimates could be underplaying the company's results given the recovery in China, the weak yen, and strong performance in the United States and Europe, said LightStream Research analyst Oshadhi Kumarasiri.
"I'm expecting a positive earnings surprise and a strong set of guidance for next year," added Kumarasiri, who publishes on the Smartkarma platform.
With its Chinese operations in doldrums for more than two years, Fast Retailing has increased its focus on markets in North America and Europe.
The company has an aggressive growth strategy for North America, and the regional chief Daisuke Tsukagoshi was elevated to president of Uniqlo last month, raising speculations he's being groomed to succeed Yanai.
Yanai, who holds about 19% of the company's shares, and his family had a net worth of $33.9 billion as of Oct. 11, according to Forbes.
Both Yanai and Tsukagoshi are due to speak at Thursday's earnings briefing.
Fast Retailing's shares are up 22% in 2023, about even with the gain in the benchmark Nikkei index (.N225).
Reporting by Rocky Swift; Editing by Varun H K
Our Standards: The Thomson Reuters Trust Principles.
Reports mainly on pharma, retail and breaking news in Japan. Previously worked at U.S. Department of State and Bloomberg News before that. New College of Florida and University of Hawaii alum. Former Poynter and JAIMS fellow.
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