Uniqlo owner's Q3 results to offer clues on China recovery, Japan inflation (updated)

RYOHIN KEIKAKU

13/07/2022 09:40

(Adds graphic on financials and estimates)
    By Rocky Swift
    TOKYO, July 13 (Reuters) - Japan's Fast Retailing  9983.T ,
home of Uniqlo, is expected to report quarterly profit grew 11%
overall on Thursday, but investors' focus will be on whether
China is recovering and how domestic consumers are faring with
inflation and the weak yen.
    A bellwether for global retailers operating in China, Fast
Retailing previously warned of a sharp decline in profit this
year from its nearly 900 stores in the world's no.2 economy.
Still, it raised overall sales and profit forecasts to reflect
strong demand in North America and Europe.  urn:newsml:reuters.com:*:nL2N2WC09Y
    On Thursday, the company is expected to post an operating
profit of 66.72 billion yen ($487 million) for its fiscal third
quarter through May, according to an average of seven analysts'
forecasts from Refinitiv. 
    For the year ending August, the company expects earnings to
climb 8.4% to 270 billion yen. 
    Uniqlo, known for affordable basics like socks and t-shirts,
is popular in China and has not disavowed the use of Xinjiang
cotton, unlike rivals including H&M  HMb.ST , after allegations
of forced labour in the region emerged in recent years.
     "We believe the worst is behind us in China and this
current quarter is 'as bad as it gets'," wrote Mark Chadwick, an
analyst who publishes on the Smartkarma research platform.
    Meanwhile, the U.S. market is projected to turn a profit for
the first time, he added.
    Results last week by Japanese retail giants Ryohin Keikaku
Co  7453.T , home of the Muji brand, and 7-Eleven convenience
store owner Seven & i Holdings Co  3382.T  showed the diverging
trends of major overseas markets.
    Ryohin Keikaku reduced full-year forecasts, citing an
uncertain outlook for mainland China. But Seven & i, which also
runs Speedway convenience stores in the United States, lifted
annual earnings estimates as the yen's decline to a 24-year low
against the dollar boosts the value in Japanese currency terms
of sales booked in the world's biggest economy.  urn:newsml:reuters.com:*:nL4N2YO1JT
    In Japan, meanwhile, the yen's drop is adding to production
costs and inflation. Fast Retailing chief executive Tadashi
Yanai has railed that there is "absolutely no merit" to a weak
yen.
    The company said last month it would increase prices on its
popular fleeces this autumn and warned that more hikes could be
on the horizon.  urn:newsml:reuters.com:*:nL4N2XU1ML
    ($1 = 137.0700 yen)
    

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Fast Retailing Financials, Estimates    https://www.datawrapper.de/_/9eidn/
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 (Reporting by Rocky Swift; editing by Kenneth Maxwell)
 ((rocky.swift@thomsonreuters.com;))