October 13, 2016 / 6:46 AM / 10 months ago

Uniqlo operator Fast Retailing forecasts record profit on Asia growth

Shoppers walk inside Fast Retailing's Uniqlo casual clothing store in Tokyo, Japan July 10, 2014.Toru Hanai/File Photo

TOKYO (Reuters) - Fast Retailing Co Ltd (9983.T), the Japanese owner of the Uniqlo casual wear brand, expects to post a record operating profit in the year to August 2017, as growth in its Asian business offsets sluggish retail demand at home.

Retailers in Japan are lowering prices and consolidating operations in a bid to shore up sales amid weak household spending and a stronger yen, but this has so far had only limited impact, with domestic monthly retail sales falling for the past sixth months, underlining ongoing fragility in the wider economy.

Fast Retailing said on Thursday it planned to increase the number of overseas Uniqlo stores to 1,104 store by the end of August, focusing on Greater China and other Asian countries, from 958 in the year just ended, while keeping the number of its Japan stores unchanged.

"At Uniqlo International we expect operating profit will expand sharply in fiscal 2017, with continued strong profit gains predicted from Uniqlo Greater China and Uniqlo Southeast Asia and Oceania," the company said in a statement.

Asia's biggest clothing retailer by sales said it expected operating profit to jump 37.5 percent to a record high 175.0 billion yen ($1.70 billion) for the year ending in August 2017, a touch higher than the average estimate of 174.2 billion yen from 19 analysts polled by Thomson Reuters I/B/E/S/.

Operating profit fell 22.6 percent to 127.3 billion yen in the year just ended, compared with the firm's forecast for 120 billion yen.

Full-year operating profit slid for the first time in five years due to currency related losses, while impairment losses linked to its J Brand brand and store closures at home and in the United States also weighed on the company's bottom line.

Reporting by Naomi Tajitsu; Editing by Muralikumar Anantharaman

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