| Indicator | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥30651.8B | ¥26167.1B | +17.1% |
| Operating Income / Operating Profit | ¥6143.9B | ¥4509.5B | +36.2% |
| Ordinary Income | ¥6582.4B | ¥5205.1B | +26.5% |
| Net Income | ¥4599.3B | ¥3596.1B | +27.9% |
| ROE | 16.4% | 15.5% | - |
For the nine months ended August 2026 (Q3 cumulative), Fast Retailing reported Revenue of ¥30651.8B (YoY +¥4484.7B, +17.1%), Operating Income of ¥6143.9B (YoY +¥1634.4B, +36.2%), Ordinary Income of ¥6582.4B (YoY +¥2061.7B, +26.5%), and Profit attributable to owners of parent (quarter) of ¥4260.8B (YoY +¥869.8B, +25.6%), delivering high-quality growth with higher sales and profits. Gross margin improved to 54.9% (up +1.1pt from 53.8% a year earlier), SG&A ratio improved to 35.6% (down -1.3pt from 36.9%), and Operating Margin expanded to 20.0% (up +2.8pt from 17.2%). Overseas UNIQLO drove a large increase in Operating Income to ¥3519.3B (YoY +46.2%), Domestic UNIQLO achieved ¥1733.5B (+15.1%), and GU reached ¥332.1B (+26.1%), with all segments growing. Comprehensive Income was ¥7372.4B, 1.6x Net Income, mainly due to Foreign currency translation differences of ¥1556.3B and Cash flow hedge valuation gains of ¥1214.4B. Operating Cash Flow was ¥6501.1B (YoY +52.2%), Free Cash Flow was ¥5401.3B, sufficient to cover dividend payments of ¥1778.9B and capital expenditures. Progress toward full-year guidance was 77.2% of Revenue, 84.2% of Operating Income, and 85.2% of Profit attributable to owners of parent, exceeding the typical Q3 benchmark (75%) at the Q3 stage.
[Revenue] Revenue totaled ¥30651.8B (YoY +17.1%), sustaining high growth. By segment, Overseas UNIQLO accounted for ¥18340.3B (59.8% of total) and was the largest profit driver with Operating Income of ¥3519.3B (YoY +46.2%). Domestic UNIQLO reported Revenue of ¥8676.9B and Operating Income of ¥1733.5B (+15.1%), GU reported ¥2656.7B Revenue and Operating Income ¥332.1B (+26.1%), and Global Brands reported ¥963.1B Revenue and Operating Income ¥30.1B (+5.2%); all segments achieved higher sales and profits. Overseas UNIQLO’s strong growth was driven by robust same-store performance and new store openings in Greater China, Southeast Asia, and North America, and benefited from a favorable FX effect (yen weakness) that boosted sales and profits. Domestic UNIQLO secured double-digit profit growth through steady same-store sales and successful pricing strategies.
[Profitability] Cost of sales was ¥13815.7B, giving Gross Profit of ¥16836.1B and Gross Margin of 54.9% (up +1.1pt from 53.8%). Relief in raw material costs and improvements in markup/mix contributed. SG&A was ¥1909.0B (SG&A ratio 35.6%, improved -1.3pt from 36.9%), meaning SG&A growth (+13.0%) lagged Revenue growth (+17.1%), demonstrating positive operating leverage. As a result, Operating Margin reached 20.0% (up +2.8pt from 17.2%). Financial income was ¥545.0B (prior year ¥790.2B) and net of financial expenses ¥106.5B (prior year ¥94.7B) produced net financial income of ¥438.5B; adding equity-method investment gains of ¥10.7B resulted in Ordinary Income of ¥6582.4B (YoY +26.5%). After corporate income tax expense of ¥1983.1B (effective tax rate 30.1%), Quarterly Profit was ¥4599.3B (prior ¥3596.1B, +27.9%), and Profit attributable to owners of parent was ¥4260.8B (prior ¥3390.9B, +25.6%). Net Income margin improved to 15.0% (up +1.3pt from 13.7%). Extraordinary items included Other income ¥243.3B (prior ¥90.4B) and Other expenses ¥37.2B (prior ¥38.6B); impairment losses were minor at ¥4.7B (prior ¥7.9B). In summary, the company delivered revenue and profit growth with margin expansion — high-quality growth.
Domestic UNIQLO Operating Income was ¥1733.5B (YoY +15.1%) on Revenue of ¥8676.9B, yielding a margin of 20.0%. Strong same-store performance and price optimization secured double-digit profit growth. Overseas UNIQLO Operating Income was ¥3519.3B (YoY +46.2%) on Revenue of ¥18340.3B, a margin of 19.2%; high growth in Greater China, Southeast Asia, and North America and scale-driven dilution of fixed costs drove margin improvement. GU Operating Income was ¥332.1B (YoY +26.1%) on Revenue of ¥2656.7B, margin 12.5%; a balanced contribution from same-store sales and new stores, along with gross margin improvement, supported results. Global Brands Operating Income was ¥30.1B (YoY +5.2%) on Revenue of ¥963.1B, margin 3.1%; restructuring effects for Theory and others are gradually materializing. Other businesses posted Operating Income of ¥1.5B (YoY -18.5%), including property leasing, with minor impact. Corporate adjustments of ¥527.3B represent head office costs and non-attributable segment income; although increased from ¥303.1B prior year, consolidated Operating Income growth absorbed the rise.
[Profitability] Operating Margin 20.0% (up +2.8pt from 17.2%) and Net Income margin 15.0% (up +1.3pt from 13.7%) materially improved due to gross margin expansion and SG&A efficiency. ROE was 16.4% (prior estimate ~15%), aided by higher Net Income margin and improved asset efficiency. [Cash Quality] Operating CF / Net Income (consolidated) was 1.41x (Operating CF ¥6501.1B / Consolidated Net Income ¥4599.3B), indicating good cash conversion. Free Cash Flow of ¥5401.3B covers dividend payments of ¥1778.9B roughly 3.0x, supporting dividend sustainability. [Investment Efficiency] Total asset turnover annualized was approx. 0.92x (Revenue ¥3.07T / Total assets ¥4.43T, Q3 cumulative basis), an improvement year-on-year. EPS ¥1388.62 (prior ¥1105.36, +25.6%), BPS ¥8891.75 (prior ¥7408.65, +20.0%) — shareholder value expanded. [Financial Soundness] Equity Ratio 61.6% (up +2.7pt from 58.9%), D/E ratio 0.20x (interest-bearing debt approx. ¥2329B / Equity ¥2.81T, excluding lease liabilities) — very healthy. Current ratio 313% (Current assets ¥2.93T / Current liabilities ¥0.93T) shows no short-term liquidity concerns. Cash and cash equivalents totaled ¥11320.8B and short-term financial assets ¥9621.2B, providing over ¥2T of on-hand liquidity.
Operating CF was ¥6501.1B (prior ¥4271.3B, +52.2%), a substantial increase. Starting from Ordinary Income ¥6582.4B plus depreciation and amortization ¥1742.2B for a subtotal of ¥8023.9B, working capital changes contributed via a decrease in inventories (+¥382.4B CF) and an increase in accounts payable (+¥469.5B), while an increase in accounts receivable (-¥647.7B) used cash. Other asset changes -¥8.4B, other liability changes +¥294.6B, and other items -¥356.0B combined; after corporate taxes paid ¥1964.8B and interest paid ¥105.6B, Operating CF reached ¥6501.1B. Investing CF was -¥1099.8B: time deposit placements -¥14308.2B and withdrawals +¥13437.1B net to -¥871.1B; tangible fixed asset acquisitions -¥615.7B; intangible asset acquisitions -¥183.0B; acquisition of investments -¥3638.9B and sales +¥4249.6B net to +¥610.7B — reflecting capital expenditures and financial investments. Free Cash Flow (Operating CF - Investing CF) totaled ¥5401.3B. Financing CF was -¥3719.8B, driven by dividend payments ¥1778.9B, bond redemptions ¥700.0B, lease liability repayments ¥1083.7B, and dividends to non-controlling interests ¥149.2B. Cash and cash equivalents increased by ¥2388.4B from opening ¥8932.4B to closing ¥11320.8B, including FX translation effects +¥706.9B.
Quarterly Profit ¥4599.3B versus Comprehensive Income ¥7372.4B (1.60x) — Other Comprehensive Income of ¥2773.1B was largely composed of Foreign currency translation differences ¥1556.3B and Cash flow hedge valuation gains ¥1214.4B. These are OCI remeasurement items reflecting temporary FX and derivative valuation movements. Non-operating income included Financial income ¥545.0B (including FX-related items, interest and dividends), down from ¥790.2B prior year, but absorbed by significant operating profit growth. Extraordinary items included impairment losses of ¥4.7B (within operating expenses), down from ¥7.9B, and asset retirement losses of ¥9.4B, both minor. The quality of recurring earnings is high: the majority of the 20.0% Operating Margin stems from structural improvements in gross margin and SG&A efficiency. However, about 38% of the increase in Comprehensive Income is driven by OCI, which poses reversal risk if FX assumptions change.
Full-year guidance: Revenue ¥39700.0B, Operating Income ¥7300.0B, Profit attributable to owners of parent (quarter) ¥5000.0B, EPS ¥1629.54, Annual dividend ¥320. Q3 cumulative progress was 77.2% of Revenue, 84.2% of Operating Income, and 85.2% of Profit attributable to owners of parent, substantially above the typical Q3 progress benchmark of 75%. With Operating Income and Net Income reaching around 85% of full-year forecasts by Q3, the hurdle to achieve second-half plan is relatively lower. An upward revision was implemented by Q3, and favorable FX assumptions (continued yen weakness) and improved earnings power of overseas operations are lifting full-year guidance. The dividend forecast ¥320 reflects an interim dividend of ¥320 already paid and an undecided year-end dividend; given progress and an estimated payout ratio of ~20%, upside to the dividend is possible. Q3 EPS of ¥1388.62 (annualized ~¥1851 pace) versus full-year EPS guidance ¥1629.54 indicates full-year target is attainable.
An interim dividend of ¥320 was paid at Q3 (year-end dividend undecided; full-year guidance ¥320). Based on Q3 cumulative Profit attributable to owners of parent ¥4260.8B and dividend payments ¥1778.9B, the implied payout ratio is about 41.7% (reflecting cumulative past dividend payments); on a forecast basis, annual dividend ¥320 / forecast EPS ¥1629.54 implies a payout ratio of approx. 19.6%, conservative. Dividend payments are about 32.9% of FCF ¥5401.3B, ensuring ample coverage. No share buybacks were executed in the period; total shareholder returns consist solely of dividends. The dividend policy is underpinned by profit growth and cash generation, supporting sustainability. On-hand liquidity exceeding ¥2T (cash ¥11320.8B + liquid financial assets ¥9621.2B) provides strong financial backing for dividends.
Inventory working capital increase risk: Inventories of ¥4976.6B decreased from ¥5109.6B prior year, but inventory turnover days must be monitored relative to sales growth. Accounts receivable ¥1662.5B increased +72.5% from ¥964.1B prior year, raising concerns about longer collection periods and credit risk associated with expanded EC and overseas sales. DSO is approx. 19.8 days (¥1662.5B / daily sales approx. ¥83.9B), a significant increase from about 13.5 days prior year. While receivable growth aligns with sales expansion structurally, signs of collection delays or bad debt risk warrant attention.
FX volatility and hedge valuation volatility: Of Comprehensive Income ¥7372.4B, OCI ¥2773.1B (Foreign currency translation differences ¥1556.3B, hedge valuation gains ¥1214.4B) accounts for ~38%, exposing the company to reversal risk if FX assumptions change. Derivative financial assets total ¥2210.3B (current ¥1378.4B + non-current ¥831.9B), forming part of hedge valuation gains. Sharp FX moves could markedly swing OCI and equity, and yen appreciation would pressure overseas-driven Revenue and profits given ~60% overseas sales ratio.
Lease liabilities, fixed-cost burden, and store expansion risk: Total lease liabilities ¥5654.1B (current ¥1314.3B + non-current ¥4340.8B) correspond to right-of-use assets ¥5224.1B and represent fixed-cost commitments tied to store expansion. Annual lease payments approx. ¥1083.7B (Q3 cumulative basis) reduce flexibility during economic downturns or store underperformance. Although impairment losses were minor (¥4.7B), the risk of future impairments or exit costs for unprofitable stores requires monitoring.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 20.0% | 3.9% (1.2%–8.9%) | +16.1pt |
| Net Income Margin | 15.0% | 2.2% (0.2%–5.7%) | +12.8pt |
Company profitability is outstanding within the retail sector, reflecting scale and product strength differentiation.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue growth (YoY) | 17.1% | 3.0% (-0.1%–9.2%) | +14.1pt |
Revenue growth substantially outpaces the sector median, driven by overseas expansion and same-store growth.
※ Source: Company compilation
High-profit growth led by Overseas UNIQLO and structural margin improvement: Operating Margin 20.0% (up +2.8pt YoY) reflects structural earnings power improvement via both gross margin expansion and SG&A efficiency. Scale expansion of overseas operations and fixed-cost dilution is expected to continue. With full-year progress near 85% after upward revisions, if FX assumptions and same-store performance remain favorable, there is upside to full-year results. Strong cash generation (FCF ¥5401.3B) combined with a conservative dividend payout (~20%) preserves scope for dividend increases while maintaining financial flexibility.
Monitoring needs for rapid accounts receivable growth and inventory working capital: Accounts receivable increased +72.5% YoY and DSO lengthened to about 19.8 days, requiring vigilance for collection delays or bad debt. Inventories declined in absolute terms but maintaining inventory efficiency and restraining markdowns during growth will be key to preserving gross margins. Approximately 38% of Comprehensive Income is OCI-driven, so FX and hedge valuation volatility can materially affect equity and comprehensive results; FX assumption changes should be monitored. Lease liabilities ¥5654.1B pose fixed-cost commitments; the risk/return profile of store expansion should be continuously evaluated regarding medium-to-long-term profitability and flexibility.
This report was auto-generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are company-compiled reference data based on public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.