Fast Retailing, US apparel and retail imports and Tesco all had numbers of interest this week. Just Style takes a look at some of the highlights.
Fast retailing enjoys H1 profit boost on Gu, Uniqlo sales growth
In the first half of 2024, Uniqlo's parent company Fast Retailing Group saw revenues increase by 9%, with the Uniqlo brand performing well across most geographies and GU brand emerging as a key driver for the group's expansion.
For the six months ended 29 February 2024, Fast Retailing’s revenue rose 9% year-on-year from ¥1.47trn ($9.58bn) to ¥1.59trn ($10.44bn).
Operating profit rose 16.7% to ¥257.09bn vs last year’s ¥220.26bn.
The profit before income taxes increased 29.9% from ¥230.5bn to ¥299.4bn.
The group’s profit for the period was up by 27.2% to ¥209.44bn.
Fast Retailing says it is now focused on its growth mission and is targeting:
- Further progressing the development of a digital consumer retailing industry,
- Diversifying global earnings pillars,
- Pursuing a business model in which the development of business contributes to sustainability,
- Expanding its GU business segment, as well as Theory and other global brands, and
- Strengthening human capital.
Recently, Uniqlo shared plans to open 11 new stores across Texas and California in 2024 as part of its wider store growth plans for North America.
Surprise growth in US apparel imports from Asia in February
US apparel imports surged during February, with a healthy return to growth from Bangladesh and a whopping 90% increase in shipment volume coming from Cambodia.
Overall, US apparel shipment volumes from all sources increased 12.9% to 2bn SME during February.
In value terms, growth of US apparel imports in February was 2.9% higher year-on-year.
Eight of the top ten apparel suppliers to the US booked shipment volume increases, with falls coming only from Honduras and Mexico.
The three Southeast Asian major apparel suppliers to the US all saw shipment volume increases.
Dr Sheng Lu associate professor in the Department of Fashion and Apparel Studies at the University of Delaware, observes the “unusual rebound in US apparel imports from leading Asian countries including China could be related to US apparel imports under de minimis trade rules" but says further detailed analysis is needed.
US retailers show resilience in navigating shipping challenges
According to NRF vice president for supply chain and customs policy Jonathan Gold, US imports will continue to increase despite another disruption – the Port of Baltimore closure - impacting US trade.
Gold pointed out the tragic collapse of the Francis Scott Key Bridge is not expected to have a national impact, however he believes it shows the ongoing need for “flexibility and resiliency” in every company’s supply chain.
Hackett Associates founder Ben Hackett said that while impact is expected to be limited with most containers being rerouted through surrounding ports, carriers have rerouted around the Red Sea and Suez Canal after attacks on vessels earlier this year while adding additional vessels and increasing vessel speed to make up for longer voyages. Doing so has resulted in relatively stable supply chains within a short period of time.
US ports covered by Global Port Tracker handled 1.96m TEU in February. That was down 0.3% from January but up 26.4% from the same month last year, when many Asian factories were closed for the Lunar New Year holiday.
Global Port Tracker projected March at 1.8m TEU, down 7.8% from February because of Lunar New Year’s impact but up 11% year over year.
April is forecast at 1.93m TEU, up 8.4% year over year, and May at 2.04m, up 5.5% and the highest level since 2.06m last October.
June is forecast at 2m TEU, up 8.9%; July at 2.04m TEU, up 6.6%, and August at 2.09m TEU, up 6.9%.
The first half of 2024 is expected to total 11.7m TEU, up 11% from the same period last year. Imports during 2023 totalled 22.3 million TEU, down 12.8% from 2022.
Tesco should focus on side hustles as food inflation eases
Tesco delivered a “strong sales performance” across the group for the 52 weeks ended 24 February 2024 (FY 23/24) with a 7.2% constant rate increase to $61.5bn ($78.13bn) from £57.2bn in the same prior period.
The supermarket also reported an adjusted operating profit of £2.8bn compared to $2.5bn the year before, which was a 12.7% constant rate increase.
But while home and clothing only account for 7% of total UK sales, these sectors continue to “hinder” Tesco as sales decreased by 3.4% for the period.
GlobalData senior retail analyst Eleanor Simpson-Gould said: “Given the weaker performance, Tesco’s efforts to exit from unprofitable markets such as large electricals and adult shoes and the acquisition and launch of Paperchase late last year are a good first step, but further work is needed to bring these ailing categories back to growth.”
She also suggested that Tesco should consider adding third-party trials to support its non-essential offering.
