UNIQLO Pricing Strategy Puts Pressure On Fast Retailing

Over the past year and a half, Fast Retailing Co. Ltd. has been heavily influenced by the wrong strategy of raising prices and the expansion of the US market has led to a sharp drop in profits.

The price adjustment strategy also led to a 0.2% decline in Uniqlo's market in the first half of fiscal year.

Stimulated by the re pricing strategy, Fast Retailing Co. Ltd. XXX group's largest brand Uniqlo UNIQLO Japanese market resumed in the second half of the year, especially in the same month sales growth of 18.1% in 7 months, which stimulated the market of Uniqlo UNIQLO Japanese market for the whole year to grow 2.5% revenue growth, from 780 billion 139 million yen in the same period last year to 7998.17 billion yen, of which, in the second half of the year, the Japanese UNIQLO Japanese market revenue increased 6.3%.

In the 2016 fiscal year, Uniqlo UNIQLO's international market income recorded 6554.06 yen billion yen, of which more than half, 332 billion 800 million yen contributed by the Greater China region, recorded an increase of 8.6% and 9.3% respectively.

Affected by the strong yen, erroneous price increase strategy and exchange losses, Asia's largest apparel retailer Fast Retailing Co. Ltd. (9983.T) (6288.HK) XXX group lost its net profit to its parent company in the 2017 fiscal year of August 31, 2016, 56.3%, down from 110 billion 27 million yen in the same period last year to 48 billion 52 million yen.

As for net profit plummeting, Fast Retailing Co. Ltd. express group said that it was partly due to the 11 billion yen's expense exchange loss, the loss of 13 billion 800 million yen of the denim brand Brand J business, and the impairment loss of Uniqlo UNIQLO, Japan, Japan and the United States market, and the loss of property, plant and equipment lost due to the closure of some stores, amounting to 93 billion yen.

In addition, the appreciation of the yen made foreign exchange reserves slide after the yen calculation, resulting in a 36 billion 900 million yen exchange loss on Financing revenues and costs.

However, for the outlook for the current fiscal year 2017, Fast Retailing Co. Ltd. Express Group is optimistic that it expects net profit of 100 billion yen in the 2017 fiscal year ended August 31, 2017, a 108.1% increase over the same period.

Although Uniqlo UNIQLO Japan and the international market saw significant profit growth in the second half of the year, they failed to offset the decline in the first half of the year. The annual operating profit of Uniqlo, UNIQLO, Japan and the international market decreased by 12.6% and 13.7% to 102 billion 462 million yen and 37 billion 438 million yen respectively, compared with 1172.49 yen billion yen and 43 billion 376 million yen in the same period last year.

In recent years, the Uniqlo China market, which relies heavily on UNIQLO, recorded a profit of 36 billion 500 million yen in fiscal year 2016, and also a 5.5% decline.

Fast Retailing Co. Ltd. express group said it was mainly affected by the two quarter of Uniqlo UNIQLO big China market.

Revenue recovery and cost reduction plans worked.

Uniqlo

In Southeast Asia and Oceania and Europe, the revenue and profit in the 2016 fiscal year all recorded an increase. Only the other high hopes for the US market continued to suffer losses. The US market did not improve. The impairment and asset scrapping resulted in a total loss of 74 billion yen.

At the group level, Fast Retailing Co. Ltd. XXX Group recorded an annual income of 1 trillion and 786 billion 473 million yen, an increase of 6.2% over the same period last year, a sharp slowdown compared with the 21.6% increase in the 2015 fiscal year. In the 2015 fiscal year, the Group recorded 1 trillion and 681 billion 781 million yen income. During the period, the group's operating profit was 1272.92 billion yen, up by 22.9%%, pre tax profit 90 billion 237 million yen, plummeting 50.1%, net profit plummeted to 53.9% yen.

In the 2016 fiscal year, the net profit and operating margin of Fast Retailing Co. Ltd. group were 7.1% and 7.3%, respectively, down 880 points and 270 basis points respectively.

The company expects that the current operating profit in the 2017 fiscal year will resume, with an expected growth of 37.5% to 1750 billion yen, but revenue growth will further slow to 3.6%, with an estimated value of 1 trillion and 850 billion yen.

Three of the five brands in the global brand sector, including GU, J Brand, Comptoir des Cotonniers, Princesse tam.tam and J Brand, continue to suffer losses.

As the second major brands of the group

In the 10th anniversary quarter, revenue and operating profit recorded 32.7% and 34.8%, respectively, to 187 billion 800 million yen and 22 billion 200 million yen, and GU brand grew 31 to 350 stores all year round, including 10 stores outside Japan.

The Japanese name jee-you, the Chinese name is excellent, and the GU with free will will be the important growth point of the Fast Retailing Co. Ltd. XXX group. The group's founder, chairman and chief executive Tadashi Yanai Liu Wei well said at the end of last month that it plans to expand the group's cheap brand, and open 1000 stores overseas in the next 10 years, and the expansion of GU will still start in Asia, where Uniqlo and UNIQLO have been successful and become "Asia first".

Theory brand profit also increased in the 2016 fiscal year.

Retailing Co. Ltd. Xun Xun group global brand sector revenue recorded 328 billion 557 million yen, compared with 295 billion 316 million yen in the same period last year rose 11.3%, the operating profit of 9 billion 520 million yen, compared with last year 144.18 yen billion yen plunged 34.0%. despite the slowdown in revenue, but Fast Retailing Co. Ltd. fast marketing group is still adhering to the expansion strategy, plans to expand the total number of global stores in the 2017 fiscal year to 3336, including 837 Japanese Uniqlo UNIQLO stores, 1104 overseas Uniqlo UNIQLO stores and 1395 global brand stores, among which, the UNIQLO Internation stores will be added to the net, while the Japanese UNIQLO stores will remain unchanged in the net fiscal year. 2016 fiscal year Fast