TOKYO (Reuters) -The Japanese operator of Uniqlo on Thursday said earnings soared 33% in its second quarter, the last period of calm before the U.S. imposition of import tariffs clouded the global clothing chain's aim for a fourth successive year of record profit.

Fast Retailing said operating profit was 146.7 billion yen ($999.9 million) for the three months through February. That compared with 110.4 billion yen for the same period a year prior and the 125.9 billion yen average of six analyst estimates compiled by LSEG.

The company raised its full-year operating profit forecast to 545 billion yen from a previous guidance of 530 billion yen.

From one store 40 years ago in Hiroshima, western Japan, Uniqlo has grown to more than 2,500 locations worldwide, selling inexpensive fleeces and cotton shirts made primarily in China and other Asian manufacturing hubs.

That business model now stands at odds with sweeping tariffs that were announced and then delayed by U.S. President Donald Trump, whipsawing global markets and prompting retaliation from trading partners.

Trump last week announced massive tariffs on dozens of countries, including a 24% duty on non-automobile products from Japan. He backtracked on Wednesday, pausing the measures for 90 days, but kept pressure on China by raising tariffs on that nation's goods to 125% from 104%.

Fast Retailing has in recent years looked to North America and Europe for growth due to a slowing economy in China, its largest overseas consumer market with more than 900 Uniqlo stores on the mainland.

The majority of Uniqlo products sold in the United States are produced in Southeast Asia.

Founder Tadashi Yanai, Japan's richest man, has long been an advocate of free trade and has defended the company's business with China amid criticism of human rights abuses on the mainland.

($1 = 146.7100 yen)

(Reporting by Rocky Swift; Editing by Christopher Cushing)

View Comments