Fast Retailing Announces Third Quarter Results for Fiscal 2014

Group Performance: Operating income up 9.9% in nine months from September 2013-May 2014. The Fast Retailing Group reported gains in both sales and income in the nine months to May 2014, with consolidated net sales reaching JP\1.088 trillion (+22.8% y/y), and operating income expanding to \136.2 billion (+9.9%). All Group operations reported rising sales and operating income, with UNIQLO International reporting a particularly strong expansion in both sales and income over the nine-month period. In terms of non-operating income, the Group reported a year-on-year contraction in foreign exchange profits of \12.5 billion. As a result, both ordinary income and net income contracted slightly year-on-year.

UNIQLO Japan: Full-year profit expected to rise on improved gross profit margin Same-store sales maintained favorable growth, rising 2.8% year-on-year in the three months to May 2014. Operating income expanded 27.1% year-on-year in the same period, thanks to a significant improvement in the gross profit margin. We forecast that operating income for fiscal 2014 as a whole will expand by 3.3% to \100.0 billion.

UNIQLO International: Another strong performance from Greater China, South Korea, and Europe Sales and income expanded by over 70% year-on-year in the three months to May 2014, thanks to especially strong gains in net sales and operating income at UNIQLO operations in Greater China (Mainland China, Hong Kong, and Taiwan), South Korea, and Europe. At UNIQLO USA, our three New York feature stores generated further double-digit growth in combined sales. However, we estimate UNIQLO USA will remain in the red in fiscal 2014, due to the cost of opening a larger number of new stores than initially planned throughout the year. The successful opening of the first UNIQLO stores in Australia and Germany in April further boosted worldwide recognition of the UNIQLO brand.

Global Brands: GU and J Brand fall slightly short of target Operating income for the Global Brands segment fell slightly short of target in the three months to May 2014, following a disappointing performance from both GU and J Brand. However, we expect the segment to generate gains in both sales and income for the full business year to August 31, 2014.

Fiscal 2014 Consolidated Estimates:
Group sales: \1.370 trillion (+19.9%), operating income: \145.5 billion (+9.5%), ordinary income: \149.5 billion (+0.3%), net income: \78.0bln (-13.7%), earnings per share: \765.34, annual dividend forecast: \300 per share (interim dividend: \150, year-end dividend: \150).