* Q1 operating profit up 16.7 pct y/y at 88.6 bln
* Boosted by cost-cutting drive and foreign exchange gain
* Domestic revenue up 3.4 pct y/y on winter sales
* Maintains operating profit forecast of 175 bln yen for
(Adds CFO comments)
By Thomas Wilson
TOKYO, Jan 12 Japan's Fast Retailing Co Ltd
, the owner of cheap-and-cheerful clothing chain Uniqlo,
reported its biggest quarterly operating profit in two years as
a cost-cutting drive and gains from a weaker yen helped offset
tepid demand at home.
A persistent economic malaise and a lack of wage growth have
eaten away at consumer confidence in Japan, prompting retailers
to offer better products for less and cut expenses. Fast
Retailing has also opted to expand overseas, including China,
Southeast Asia and the United States, to ride out the gloom.
With Japan's consumer prices and household spending both
slumping in November for the ninth straight month, the retailer
said it did not plan to raise prices, highlighting the
challenges faced by the country as it strives to banish
"Consumers are becoming cautious when it comes to shopping,"
said Chief Financial Officer Takeshi Okazaki at an earnings
briefing. "They're highly price-conscious."
Fast Retailing's operating profit for the three months ended
Nov. 30 was 88.59 billion yen ($774.3 million), up 16.7 percent
from a year ago and the highest since the same period in 2014.
This was mostly in line with average analysts' expectations
for an operating profit of 88.84 billion yen for the quarter,
Thomson Reuters data shows.
The retailer's revenue in Japan rose 3.4 percent to 239
billion yen as cold weather in November boosted sales of winter
clothing such as cashmere sweaters and outerwear.
A weaker yen helped the company book a foreign exchange gain
of 15.6 billion yen on foreign currency-denominated assets over
the quarter. The yen averaged 13 percent less against the dollar
between September-November compared to the same period a
At the end of the last business year, overseas stores
contributed 37 percent of the retailer's overall revenue.
Fast Retailing reiterated its operating profit forecast for
the year to August at a record high of 175 billion yen. That
compares with an average of 177.3 billion yen predicted by 18
analysts surveyed by Thomson Reuters.
($1 = 114.4100 yen)
(Reporting by Thomas Wilson and Tim Kelly; Additional reporting
by Ritsuko Shimizu; Editing by Himani Sarkar)