Uniqlo owner warns significant tariff impact, plans price hikes
JAPAN’S Fast Retailing, owner of the Uniqlo clothing brand, said on Thursday higher US tariffs would start impacting its US operation significantly from later this year and it planned to raise prices to mitigate the blow.
Concerns about resurgent inflation and an economic slowdown triggered by US President Donald J. Trump’s erratic tariff roll-out have already dampened shopping enthusiasm in the US and other major consumer markets. Earlier this week, Mr. Trump has set a new Aug. 1 deadline for “reciprocal” tariff rates, which will affect nearly all trading partners.
“It is unavoidable that we will be significantly affected from autumn and winter,” Fast Retailing Financial Officer Takeshi Okazaki said in its quarterly earnings conference.
“It will be difficult to absorb all costs. Our approach will be to raise prices where possible and not where it isn’t possible, while ultimately focusing on creating a sustainable business that securely generates profits.”
The majority of Uniqlo products sold in the US are produced in Southeast Asia and South Asia.
In a letter on Wednesday, Mr. Trump notified Sri Lanka, a major apparel exporter to the US, would face a 30% tariff from Aug. 1. Its competitor Vietnam faces a lower 20% US tariff but trans-shipments from third countries through Vietnam will face a 40% levy, Mr. Trump said last week.
For the current fiscal year to end-August, the company kept its operating profit forecast at 545 billion yen, as it expected limited tariff impact due to early shipments to the US market.
“FY2025 impact likely to be limited, whatever the tariff rate,” the company said in an earnings statement, adding it has already shipped a substantial number of products to the US.
Fast Retailing said operating profit in the three months to May 31 rose 1.4% to 146.7 billion yen ($1 billion), below a consensus forecast of 153.8 billion yen based on a LSEG poll of five analysts.
From one store in Hiroshima, western Japan, 40 years ago, Uniqlo has grown to more than 2,500 locations across the world, selling inexpensive fleeces and cotton shirts made primarily in China and other Asian manufacturing hubs.
But that business model has been upended by widespread tariffs announced by Mr. Trump, while falling sales in China due to weak consumer demand in the world’s second-largest economy has put pressure on profits.
It expected lower fourth-quarter sales and profit in China due to overall lackluster demand for apparel.
The company has recently 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.
Shares in Fast Retailing were the fourth-biggest loser among large-cap stocks in the Asia-Pacific in the first half of 2025, declining about 8%, according to LSEG data.
Shares in the company closed down 0.9% prior to the earnings report. — Reuters
