The share price of Fast Retailing fell today (April 11th) after the company revealed it expects profits to be down on its previous estimations.
In a statement, the firm announced that it has cut its net profit forecast to 88 billion Japanese yen (£515 million) for the full year ending in August as a result of factors such as sluggish sales.
Fast Retailing's biggest brand by far is the budget clothing company Uniqlo, which has more than 300 stores in Greater China and has been expanding across the world in recent years. Its largest store yet, which is located in Guangzhou, south China, was opened last month.
The latest profit estimate to be released by the company is significantly down from a previous guidance of 92 billion yen and investors responded negatively to the announcement, with the share price of the firm falling heavily as a result of the news.
Group operations up
Fast Retailing also revealed that all group operations have been reported to be rising, along with net sales and operating income, while Uniqlo International has had a particularly strong expansion in both its net sales and operating income over the last six months.
It said: "In terms of non-operating income, the group reported a year-on-year fall in foreign exchange proﬁts of 6.4 billion Japanese yen.
"This factor was largely responsible for the slight year-on-year contractions in the second-quarter consolidated ﬁgures for ordinary income and net income."
Fast Retailing also noted that the medium-term vision of the company is to become the world’s number one apparel manufacturer and retailer, with the firm accepting it will need to expand aggressively all over the world if it is to have a chance of hitting this target in the future.
Despite the bullish comments made by the company regarding its hopes and aims for the coming years, investors shied away from stocks in the firm following the news of the profits fall. Shares in the company fell by almost seven per cent in trading today after the announcement.
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