Uniqlo owner Fast Retailing beats its profit forecast, raises its dividend to 850 yen and expects slower growth next year

Fast Retailing, the Japanese company behind Uniqlo, said Thursday that operating profit rose 31.7% to 743.1 billion yen in the year to Aug. 31, beating the forecast it gave in July, and raised its dividend for the year to 850 yen a share from the 640 yen it had planned. For the year ahead, it expects that profit growth to slow to 11.7%.

The figures came out after the Tokyo market closed. Revenue for fiscal 2026 rose 16.6% to 3.96 trillion yen, a little short of the 3.97 trillion yen the company had forecast, while profit landed above its targets. Operating profit was 13.1 billion yen more than the 730 billion yen forecast, and profit attributable to shareholders rose 25.3% to 542.5 billion yen, against a forecast of 500 billion yen, helped by 59.3 billion yen of net finance income, mostly interest. The company called it its fifth straight year of record results.

Uniqlo abroad did the heavy lifting

Uniqlo's business outside Japan grew revenue 26.2% to 2.41 trillion yen. Their business profit, the company's measure of what its operations earn before other income and costs, rose 44.1% to 439.8 billion yen, more than twice the 196 billion yen Uniqlo made at home. A weaker yen flattered those numbers; in local currencies, overseas revenue rose about 18% and business profit about 35%.

North America and Europe grew fastest. Revenue rose 34.6% to 364.9 billion yen in North America and 38.7% to 512.6 billion yen in Europe, and business profit grew 53.3% and 69% in the two regions. Together they outsold Greater China for the first time, 877.6 billion yen to 724 billion yen, and also topped the group of South Korea, Southeast Asia, India and Australia. Greater China still grew, with revenue up 11.3% and business profit up 24.6%. In mainland China, where Uniqlo closed a net 51 stores over the year while it reworked the business, revenue rose about 3% in local currency and business profit about 18%.

A soft summer at home

Uniqlo Japan had a record year, with revenue up 5.7% to 1.08 trillion yen and business profit up 8.1%, but it finished weakly. Same-store sales fell 4% in the June-August quarter and customer visits 8%, as cooler weather in June and August than a year earlier, along with typhoons and heavy rain, cut demand for summer clothes; June alone was down 14.1%. The company had warned in July that the quarter would bring lower revenue and a double-digit drop in profit for the business. Sales picked up in September, when same-store sales rose 10.8% as cooler weather brought in shoppers for autumn and winter clothes. Overseas visitors made up about 11% of Uniqlo Japan's sales for the year.

GU, the group's lower-priced fashion chain, grew revenue 1.8% for the year and business profit 11%, but slipped to a slight loss in the fourth quarter as it fell short on summer demand and struggled with the balance of its new autumn range. Fast Retailing said GU's September sales also fell short of plan.

For the group, growth slowed in the fourth quarter. Revenue rose 14.6% to 898.2 billion yen and operating profit 13.6% to 128.7 billion yen, compared with gains of 17.1% and 36.2% in the first nine months.

A bigger payout

The 850 yen dividend, made up of a 320 yen interim payment and a 530 yen year-end payment, compares with 500 yen for fiscal 2025 and amounts to 48.1% of profit, up from 35.4%. The board is due to make the year-end payment final on Nov. 5. For fiscal 2027, Fast Retailing plans 900 yen, split evenly between the two payments, or 49.3% of the profit it forecasts.

The company said its cash generation had improved enough, as Uniqlo grew in the United States, Europe and elsewhere, that it could pay out about half its profit and still fund heavy investment in flagship stores, supply chains, staff training and digital systems. It ended the year with just over 1 trillion yen in cash and cash equivalents.

What it expects for fiscal 2027

For the year to August 2027, Fast Retailing forecasts revenue of 4.45 trillion yen, up 12.3%, and business profit of 830 billion yen, up 15.5%. Operating profit is also forecast at 830 billion yen, a smaller 11.7% gain, because the forecast leaves out the kind of other net income, 24.6 billion yen this year, that it booked on top of business profit. Profit attributable to shareholders is forecast to rise just 3.2%, to 560 billion yen. The company expects net finance income of about 50 billion yen and, with the yen at 160 to the dollar at the start of the year, is assuming no currency gains.

It expects double-digit growth in revenue and profit for Uniqlo outside Japan, with revenue in Greater China rising at a slower pace, and flat business profit at Uniqlo Japan, where same-store sales are forecast to rise about 2% and a weaker yen is raising the cost of the goods it buys. The forecast assumes average rates of 156.2 yen to the dollar and 181.8 yen to the euro, and the company plans to end the year with 3,545 stores, a net 35 more than now.

Fast Retailing shares closed little changed at 74,800 yen in Tokyo on Thursday, before the results came out. Its depositary receipts in Hong Kong, halted at 1 p.m. local time pending the announcement, are due to resume trading on Friday morning.