Uniqlo Sees Need to Raise Prices Due to Higher Material Costs
(Bloomberg) -- Fast Retailing Co., which became one of the world’s biggest apparel companies by selling simple, affordable and stylish clothing at its Uniqlo stores, will probably need to raise prices, its chief financial officer said.
“It’s time to review and increase prices of some items as we face higher costs of materials, logistics and weaker yen,” CFO Takeshi Okazaki said at an earnings briefing in Tokyo Thursday. “Our baseline is trying not to raise prices as much as possible. It will be extremely limited.”
Although core inflation runs well below 1% in Japan, consumer expectations for higher prices have climbed to their highest since 2008, according to a recent quarterly survey by the Bank of Japan. Higher input prices from raw materials, supply chain disruptions and economies flush with cash are fueling a wave of price gains across the globe, most notably in the U.S., where the consumer price index climbed 7% in 2021.
Earlier on Thursday, Fast Retailing reported that operating profit rose in the latest fiscal quarter ended November to 119 billion yen ($1 billion), despite weaker sales at its Uniqlo stores in Japan and slower foot traffic. The result topped an average analyst projection for 99 billion yen. The retailer kept its profit forecast for the current fiscal year intact at 270 billion yen.
Fast Retailing will give a more thorough price review after the autumn and winter season, Okazaki said.
©2022 Bloomberg L.P.