Uniqlo (Financials)
Financial overview
- Parent company Fast Retailing generated sales of ¥2.77 trillion (£16.4bn) in FY2023
- Sales Uniqlo International climbed 28.5% to ¥1.44 trillion (£8.54bn)
- Group pre-tax profits rose to ¥437.9bn (£2.61bn)
- Uniqlo Europe sales surged 36% in constant currency to €1.31bn (£1.14bn) in FY2023
Parent company Fast Retailing is one of the world’s largest fashion retailers, comprising four divisions: Uniqlo Japan, Uniqlo International, its discount casual wear label GU and its Global Brands division which includes Theory, PLST, Comptoir des Cotonniers and Princesse tam.tam.
Fast Retailing posted a 20.2% rise in sales to ¥2.77 trillion (£16.4bn) for the year to 31 August 2023 (FY2023).
Uniqlo International (where Uniqlo Europe sits) reported strong revenue gains, with sales jumping 28.5% to ¥1.44 trillion (£8.54bn) in the latest financial year.
Within Uniqlo Japan, the retailer posted revenue of ¥890.4bn (£5.29bn), which was up 9.9% year-on-year, while operating profit was up 9.2% at ¥117.8bn (£700.4m).
Fast Retailing said Uniqlo Japan’s “record performance” was boosted by “strong sales of winter items” as well as increased sales across its AIRism innerwear, AirSense ultra-light jackets among other bestsellers. It said its “great performance” was achieved despite “soaring raw materials costs and a weak yen”, with the retailer encouraging its store staff and the company as a whole to focus on “addressing customer needs”.
With an eye to Uniqlo’s international results, the fashion giant posted record revenue of ¥1.43trn (£8.54bn) and an operating profit of ¥226.9bn (£1.35bn) in FY2023.
In Europe and North America, Uniqlo credited its customers’ “deepening affinity” for its LifeWear brand concept for the hike in performance abroad.
Fast Retailing also said that it saw a “strong overall performance” across the rest of its international regions with “significant revenue and profit gains in all markets”.
The retailer now plans to “strengthen the opening of high-quality stores” in a bid to reach a store estate total of 3,660 by the end of August 2024, comprising 800 Uniqlo Japan stores (including franchise stores), 1,744 Uniqlo International stores, 480 sister-brand GU stores, and 636 Global Brands stores.
Overall group operating profit climbed 28.2% year-on-year from ¥297.3bn (£1.89bn) in FY2022 to ¥381bn (£2.27bn).
The Uniqlo International division surpassed 50% share of group revenues for the first time, with its operating profit rising to approximately 60% of the group total at ¥226.9bn (£1.35bn).
Group pre-tax profit rose 5.9% to ¥437.9bn (£2.61bn) in FY2023.
European sales
Uniqlo’s business in the UK forms part of Uniqlo Europe, which also includes the retailer’s stores in France, Germany, Belgium, Italy, Spain, the Netherlands, Sweden, Denmark and Poland.
*All UK measures in Retail Navigator’s data are for Uniqlo Europe*
Uniqlo Europe saw sales surge 36% in constant currency to €1.31bn (£1.14bn) in FY2023. The retailer said there had been a significant increase in younger customers, who had embraced “viral” items such as its mini-round shoulder bag during the summer months.
Sales at Uniqlo Europe had jumped 52% to €963.7m (£815.0m) in constant currency terms in FY2022 as stores were able to trade for the entire period.
In the face of rapid physical expansion via flagship stores and set-up costs associated with entering new markets, Uniqlo Europe had struggled to maintain sustainable profitability. This was compounded by the health crisis, with operating losses widening from €20.9m (£18.6m) in FY2020 to €28.7m (£25.1m) in FY2021.
Uniqlo Europe swung firmly back into the black in FY2022, however, posting an operating profit of €112.4m (£95.0m), on the back of the stellar sales growth and with less discounting required to drive sales. Operating margin reached a record 11.7%.
A robust performance in the latest financial year saw operating profit within Uniqlo Europe surge to €189.1m (£164.9m) with operating margin climbing to 17.1%. The retailer delivered a pre-tax profit of €186.6m (£162.7m) with pre-tax margin climbing from 11.4% to 16.9%.
Fast Retailing plans to reach revenues of ¥500bn (£2.6bn) within Uniqlo Europe by FY2027.
Within the UK, it operated 17 stores by the close of FY2023, with expansion plans for 2024 including a store in Edinburgh as well as a third store on London’s Oxford Street.
Ecommerce sales performance
Fast Retailing said ecommerce sales rose to around 15% share of total group revenues in FY2023, which Retail Navigator estimates to be in the region of £2.27bn.
It said ecommerce share equated to 15.0% in Japan, approximately 20% in the Greater China region, South Korea, North America, and Europe, and approximately 10% in Southeast Asia, India & Australia.
Uniqlo’s ecommerce operation is growing increasingly important as more customers shop both online and in stores.
The proportion of sales generated online across Uniqlo Europe peaked at 37% at the height of the pandemic in FY2021, up from 22% the year before, but settled back at 20% in FY2022 as trading patterns normalised.
Retail Navigator estimates online sales within Europe came in at around €265.1m (£228.21m) in FY2023.
Management is committed to boosting the contribution of ecommerce to Uniqlo’s global sales to at least 30% in the near future.
Employees
While the headcount across Uniqlo Europe was reduced slightly in FY2021 as costs came under increased scrutiny as during the pandemic, the upward trend in staff numbers resumed in FY2022. The headcount rose 18.4% to 3,732 comprising 3,346 retail staff (up from 2,860 the year before) and 386 (292) admin staff.
Headcount continued an upward trajectory in the latest financial year, with employee numbers rising to 4,604 with both administration and retail staff rising year-on-year.
*Figures in the above chart are for Uniqlo Europe*
Sales per employee surged to a record £218,000+ as the sharp rise in sales more than offset the increase in headcount. Sales per employee rose to around £247,735 in FY2023 given the improvement in sales.
The staff costs to sales ratio was also brought down to 15.0% in FY2022 after three years of increases, edging down to 14.9% in the latest financial year.
Figures in the above chart are for Uniqlo Europe
Current financial year
H1
Uniqlo parent Fast Retailing saw total sales rise 9.5% to ¥1.60trn (£8.66bn) for the six months to end February 2024 (H1 FY2024).
Revenues at Uniqlo Japan fell 2% to ¥486bn (£2.63bn) while Uniqlo International sales surged 17% to ¥884bn (£4.77bn) with strong performances from operations in North America, Europe and Southeast Asia.
Fast Retailing said North America and Europe reported “significant” revenue and profit gains on the back of a continued expansion in new customer bases and growing customer affinity toward LifeWear.
Group operating profit increased to ¥257bn (£1.3bn) with operating profit at Uniqlo Europe rising 23% to ¥151bn (£0.82bn).
Fast Retailing expects full-year revenues to reach ¥3.03trn (£17.8bn), growing 9.5% year-on-year.
Forecast
In the long-term, Fast Retailing is targeting revenues of ¥10trn (£58.7bn), seeking to become the number one brand among customers worldwide.
With expansion being ramped up to 30 new stores a year across the division over the coming years, Fast Retailing expects Uniqlo Europe sales will reach ¥500bn (just over £3bn) by FY2027 on which it is targeting an operating profit margin of 20%.
Retail Navigator forecasts group revenues to reach £22.8bn by FY2028, with European operations rising to around £3.2bn.
Ecommerce sales are forecast to climb to 18.5% for the group with European ecommerce sales accounting for upwards of 27% of sales within the region.
