Uniqlo Expects Six Consecutive Years of Record Profits

Fast Retailing Group, which operates Uniqlo, announced on October 9th that it expects consolidated net profit (IFRS) for fiscal year 2026 (ending August 2026) to rise slightly from the previous year to 435 billion yen. While projecting record profits for the sixth consecutive year, concerns remain about its North American business, which will be fully impacted by Trump’s tariffs. The company plans to offset the impact of tariffs through price increases, but this also carries the risk of a consumption downturn in its largest global market.

Sales revenue (equivalent to sales) is projected to increase by 10% to 3.75 trillion yen in fiscal year 2026.

In fiscal year 2025 (ending August 2025), operating income for the North American business will be 271.1 billion yen, a 25% year-on-year increase. In the United States, pre-tariff inventory levels have essentially bottomed out. At a press conference held in Tokyo, Fast Retailing Chief Financial Officer Ken Okazaki stated, “We have absorbed the increased costs caused by tariffs through price adjustments,” and revealed that prices for some products had already been raised.

Fast Retailing had previously forecast that tariffs would be the primary cause of a decrease of approximately 2.5 billion yen in its “operating profit” (calculated by deducting sales costs, selling expenses, and administrative expenses from sales revenue) for fiscal 2025. The company has reportedly offset this profit decline through price increases.

The impact of tariffs will further increase starting in fiscal 2026. Okazaki stated, “We will absorb this impact through price rationalization,” indicating a desire for further price increases in the United States.

Fast Retailing Chairman and President Tadashi Yanai, who also attended the press conference, stated regarding the US tariff policy, “Imposing tariffs is, in a sense, an antagonistic act. The market must be free and open.” He also strongly expressed his dissatisfaction with the tariff policy, stating, “There have been cases where trade disruptions have led to wars.”

Of particular concern is the impact of price increases on sales. Although US personal consumption remains strong, Uniqlo’s value proposition is widely considered a strength, and continued price increases could lead to a decline in sales.

Fast Retailing is shifting its growth focus from the Chinese market, long its core profit driver, to other regions, with the US market becoming increasingly important.

For fiscal 2025, Uniqlo’s overseas sales in the Greater China region, encompassing Hong Kong and mainland China, fell 4% year-on-year to 650.2 billion yen, marking the first decline in five years. North America saw a 25% year-on-year increase to 271.1 billion yen, while Europe saw a 34% year-on-year increase to 369.5 billion yen.

In the US market, Fast Retailing is opening flagship stores in major cities such as New York and Chicago.

Fast Retailing has 366 sewing factories worldwide (as of September), including 60 in Vietnam and 27 in Bangladesh, which export to the US. Products from these two countries have been subject to a hefty 20% tariff since August.

Whether Fast Retailing can achieve its sixth consecutive year of record profits hinges on its pricing strategy in the US market, which requires balancing cost-shifting and pricing. Competing apparel companies have also begun raising prices in the US market.

From June to August 2025, H&M’s sales in North and South America, primarily in the US, reached 12 billion Swedish kronor, a year-on-year decrease of 8%. H&M’s CEO, Daniel Ervér, believes the impact of tariffs will intensify after September to November and hints at possible future price increases.

In addition, according to US media reports, Spain’s Inditex Group, which owns the ZARA brand, has already raised prices on some products in the US market.

Fast Retailing announced on the 9th that its consolidated net profit for the fiscal year 2025 (ending August 2025) increased by 16% year-on-year to 433 billion yen. Sales of its Uniqlo business in Japan increased by 10% year-on-year to 1.026 trillion yen, marking the first time an apparel company’s sales exceeded 1 trillion yen.