Fast Retailing : (807KB)

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the "Stock Exchange") take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

FAST RETAILING CO., LTD.

迅 銷 有 限 公 司

(Incorporated in Japan with limited liability)

(Stock Code:6288)

FIRST QUARTERLY RESULTS ANNOUNCEMENT

FOR THE THREE MONTHS ENDED 30 NOVEMBER 2022

AND

RESUMPTION OF TRADING

The board of directors (the "Board") of FAST RETAILING CO., LTD. (the "Parent" or "Company") is pleased to announce the consolidated results of the Company and its subsidiaries (collectively the "Group") for the three months ended 30 November 2022.

At the request of the Company, trading in its Hong Kong depositary receipts on the Stock Exchange was halted with effect from 1:00 p.m. on Thursday, 12 January 2023, pending the release of this announcement. An application will be made by the Company to the Stock Exchange for resumption of trading in the Hong Kong depositary receipts with effect from 9:00 a.m. on Friday, 13 January 2023.

(Amounts are rounded down to the nearest million yen unless otherwise stated)

1. CONSOLIDATED RESULTS

The consolidated financial results were prepared in accordance with International Financial Reporting Standards ("IFRS").

(1) Consolidated Operating Results (1 September 2022 to 30 November 2022)

(Percentages represent year-on-year changes)

	Revenue			Operating profit	Profit before	Profit for
			income taxes	the period
	Millions			%		Millions		%	Millions	%	Millions		%
	of yen				of yen		of yen	of yen
Three months ended 30 November 2022	716,393			14.2		117,077		(2.0)	126,812	(5.5)	89,830		(8.0)
Three months ended 30 November 2021	627,391			1.2		119,406		5.6	134,208	25.2	97,619		34.7
	Profit attributable to	Total comprehensive	Basic earnings	Diluted earnings
		income for the	per share for the	per share for the
	owners of the Parent
		period		period	period
	Millions		%		Millions	%		Yen			Yen
	of yen			of yen
Three months ended 30 November 2022	85,074			(9.1)		77,744		(41.2)		832.47	831.32
Three months ended 30 November 2021	93,592			33.0		132,299		95.6		916.21	914.87
				－ 1	－

(2) Consolidated Financial Position

			Equity	Ratio of equity	Equity per
			attributable to	share
			attributable
	Total assets	Total equity	owners	attributable
	to owners
			of the Parent	to owners
			of the Parent
			to total assets	of the Parent
	Millions of	Millions of	Millions of	%	Yen
	yen	yen	yen
As at 30 November 2022	3,196,819	1,617,760	1,565,335	49.0	15,315.90
As at 31 August 2022	3,183,762	1,615,402	1,561,652	49.1	15,281.90

2. DIVIDENDS

Dividend per share

(Declaration date)

First quarter

Second quarter

Third quarter

Year end

Total

period end

period end

period end

Yen

Yen

Yen

Yen

Yen

Year ended 31 August 2022

-

280.00

-

340.00

620.00

Year ending 31 August 2023

-

Year ending 31 August 2023

115.00

-

115.00

230.00

(forecast)

(Note)

1. Revisions during this quarter of dividends forecast for fiscal year: None

2. Our common stock will be split on a 3-to-1 basis, effective March 1, 2023.

The amounts listed for dividends at the end of Q2 of the fiscal period ending August 2023, as well as year-end dividends, take into consideration this stock split. Note that, due to the vesting date being February 28, 2023, dividends at the end of Q2 will be paid at a rate of 345 yen per share, based on the number of shares prior to the stock split.

3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2023 (1 SEPTEMBER 2022 TO 31 AUGUST 2023)

					(% shows rate of increase/decrease from previous period)
							Profit before	Profit attributable to
	Revenue		Operating profit	owners of the
		income taxes
							Parent
	Millions		%	Millions		%	Millions	%	Millions	%
	of yen		of yen		of yen	of yen
Year ending 31 August 2023	2,650,000		15.2	350,000		17.7	350,000	(15.4)	230,000	(15.9)
	Basic earnings
	per share
	attributable
	to owners
	of the Parent
			Yen
Year ending 31 August 2023	2,251.15

(Note) Revisions during this quarter of previously disclosed consolidated business results projection for the year ending 31 August

2023: None

Regarding the stock split mentioned under the 2. DIVIDENDS, the above basic net income per share is calculated based on the number of shares before the stock split.

－ 2 －

* Notes
(1) Changes of principal subsidiaries in the period:			None
(2) Changes in accounting policies and changes in accounting estimates:
(i)	Changes in accounting policies to conform with IFRS:			None
(ii)	Other changes in accounting policies:			None
(iii)	Changes in accounting estimates:			None
(3) Total number of issued shares (Common stock)
(i)		Number of issued shares	As at 30 November		106,073,656	As at 31 August 2022	106,073,656
	(including treasury stock)	2022		Shares	shares
(ii)		Number of treasury stock	As at 30 November		3,870,360	As at 31 August 2022	3,883,973
	2022		Shares	shares
		Average number of issued	For the three months		102,195,460	For the three months	102,151,077
(iii)		ended 30 November		ended 30 November
	shares		shares	shares
		2022		2021

• This first quarterly results announcement is not subject to quarterly review procedures pursuant to the Financial Instruments and Exchange Act of Japan.
• Explanation and other notes concerning proper use of the consolidated business results projection:
  Statements made in these materials, such as those pertaining to future matters, including business projections, are based on information presently available to the Company and certain assumptions determined to be reasonable. Actual business results may vary materially depending on a variety of factors. For the background, assumptions and other matters regarding the business results projection, please refer to P.7 "(3) Qualitative Information Concerning Consolidated Business Results Projection".

－ 3 －

1. Business Results

1. Results of Operations
   The Fast Retailing Group's revenue increased but profit contracted in the first quarter of fiscal 2023, or the three months from 1 September 2022 to 30 November 2022. Consolidated revenue totaled 716.3 billion yen (+14.2% year-on-year), while operating profit totaled 117.0 billion yen (−2.0% year-on-year). That result was due primarily to a large decline in profits at our UNIQLO operation in the Mainland China market caused by COVID-19 restrictions on movement. Having said that, UNIQLO operations in all markets, with the exception of Greater China and Japan, performed strongly and reported considerable increases in both revenue and profit. Our GU operation also started expanding once again after generating strong rises in both first-quarter revenue and profit. Fast Retailing's consolidated gross profit margin declined by 0.9 point year-on-year to 53.1%. Meanwhile, the selling, general and administrative expense ratio increased by 1.5 points year-on-year to 37.0%. In addition, we recorded 9.7 billion yen under finance income net of costs resulting from higher interest income generated from the higher number of bonds under management and from the recording of translated foreign exchange gains on foreign-currency denominated assets. As a result, first-quarter profit before income taxes contracted to 126.8 billion yen (−5.5% year-on-year) and profit attributable to owners of the Parent decreased to 85.0 billion yen (−9.1% year-on-year).
   The Fast Retailing Group is determined to strengthen initiatives designed to expand our business operations and promote sustainability in order to become a global No.1 brand by focusing on: (1) creating customer-oriented products, (2) accelerating global store openings, (3) building purchasing experiences that fuse physical stores and e-commerce, and (4) helping to solve various environmental and social issues. We are working especially hard at UNIQLO International, as the pillar operation of the Fast Retailing Group, to accelerate new store openings in all markets and to strengthen our e-commerce operations. We aim to continue to expand our operations in the Greater China region (Mainland China market, Hong Kong market, and Taiwan market) and the South Asia, Southeast Asia & Oceania region (Southeast Asia, Australia, and India), where we hope to further strengthen our already established brand position. Now that we have firmly established profitable business structures in North America and Europe, we are aiming to further expand the scale of our business by strengthening our marketing, promoting deeper understanding and loyalty towards our LifeWear ultimate everyday clothing, and accelerating new store openings. We also intend to create clothes that prize LifeWear concepts in order to build a sustainable society. We will continue to pursue our ultimate goals of creating high-quality,long-lasting clothes, clothes with a low environmental impact that are produced in healthy and safe working environments, and clothes that can be further circulated, even after purchase, through recycling and reuse.
   UNIQLO Japan
   UNIQLO Japan reported higher revenue but lower profit in the first quarter of fiscal 2023, with revenue totaling 240.9 billion yen (+6.4% year-on-year) and operating profit totaling 39.4 billion yen (−5.6% year-on-year).First-quartersame-store sales increased by 4.7% year-on-year.Cooler-than-usual temperatures in September and October helped generate strong sales of Fall Winter items, such as jackets, souffle yarn knitwear, cashmere, and HEATTECH items. Sales of on-trend items such as our tucked wide- leg pants also sold well. However, on the profit front, the gross profit margin declined by 1.1 points year-on-year as procurement costs rose on the back of the sharp depreciation in the Japanese yen. The selling, general and administrative expense ratio increased by 0.8 point year-on-year as personnel costs rose on the back of higher wages for part-time and temporary workers and we decided to strategically increase outlays for advertising and promotion.

－ 4 －

UNIQLO International

UNIQLO International reported a significant increase in revenue but a decline in profit in the first quarter of fiscal 2023, with revenue rising to 357.8 billion yen (+19.4% year-on-year) and operating profit contracting to 57.2 billion yen (−4.4% year-on- year). The two factors that sparked the decline in first-quarter profit were the impact of COVID-19 restrictions on movement in Mainland China, which resulted in a large contraction in profit there, and the temporary suspension of operations in Russia, which resulted in a first-quarter loss. However, the South Asia, Southeast Asia & Oceania region, North America, and Europe (excluding Russia) all achieved record first-quarter performances, generating impressively strong increases in revenue and profits that outstripped our expectations.

Breaking down the UNIQLO International performance into individual regions and markets (in local-currency terms), the Mainland China market was heavily impacted by COVID-19 restrictions on movement and a decline in consumer appetite. At the same time, a maximum of 247 stores were forced to temporarily close their doors over the period, all of which resulted in a large decline in both revenue and profit in the Mainland China market. The weather was warmer than usual in the normally bumper month of November in the Hong Kong and Taiwan markets, which resulted in a fall in revenue and a large decline in profits. UNIQLO South Korea reported higher revenue and profit in the first quarter, thanks to particularly strong sales of casualwear items and knitwear. Meanwhile, revenue and profit both rose considerably in S/SE Asia & Oceania, where we witnessed a recovery in consumer appetite and travel demand. Customer support for UNIQLO products had also grown even stronger following our efforts to continuously convey pertinent information about our core items. UNIQLO North America reported significantly higher revenue and profit in the first quarter, with sales proving strong after we conveyed information to improve our branding and strengthened our marketing of core Winter items. Europe (excluding Russia) reported much higher revenue in the first quarter and profit also increased, with sales proving especially strong in September after the weather turned sharply colder.

GU

The GU business segment reported large increases in both revenue and profit in the first quarter of fiscal 2023, with revenue rising to 79.3 billion yen (+13.6% year-on-year) and operating profit totaling 10.6 billion yen (+19.3% year-on-year). GU was able to generate strong first-quarter sales by narrowing down the number of product numbers on offer and ensuring a sufficient supply of mass-trend products. The return of more normal distribution operations, an increased ability to respond flexibly to requirements for additional production of strong-selling items, and falling temperatures in October all helped boost GU performance. Sales of heavyweight sweatshirts, wide pants, and heat padded outerwear proved especially strong.

Global Brands

The Global Brands segment reported a large rise in revenue but a decline in profit in the first quarter of fiscal 2023, with revenue rising to 37.6 billion (+22.4% year-on-year) and an operating profit contracting to 0.7 billion yen (−72.1% year-on-year). While our Theory brand generated much higher revenue, it also reported a decline in first-quarter profit. This was due to a decline in profitability and a consequent contraction in profits at Theory's United States operation following a decision to strengthen discount sales and also to falling profits from Theory's Asian operation, which is concentrated primarily in Greater China, due to COVID-19. Meanwhile, our PLST brand generated slightly higher revenue and profit in the first quarter on the back of strong sales of lightweight haori jackets and stick pants. Finally, our France-based Comptoir des Cotonniers brand reported a decline in revenue on the back of the warmer weather in Europe from October onwards as well as declining consumer appetite in an inflationary environment, and, as a result, the brand recorded a slightly larger operating loss than in the previous year.

Royalty Department performance that had previously been presented under "UNIQLO Japan" is now included in the "Adjustments". Please see "Interim Condensed Consolidated Financial Statements and Accompanying Material Notes, (6) Notes to the Interim Condensed Consolidated Financial Statements, 1. Segment Information" for details. The segment information for the three months ended 30 November 2021 is based on the revised segmentation.

－ 5 －