Goldman Sachs raises Fast Retailing's operating profit forecast as same-store sales in Japan show strong growth

Goldman Sachs published a report stating that it has raised the operating profit forecasts for Fast Retailing (06288.HK) for the fiscal years 2026 to 2028 by 2%, 1%, and 1% respectively, reflecting strong domestic sales momentum in Japan as of November, including a year-on-year same-store sales growth of 11% from September to November and an overall sales growth of 12.1%.

The bank has incorporated factors such as the bottoming out of performance in mainland China and the impact of U.S. tariffs into its forecasts, expecting sales and operating profit in the Chinese market to increase by 2% and 5% respectively. In the North American market, despite the tariff impact, the bank anticipates that the operating profit margin for the fiscal year 2026 will improve as the company adjusts prices, controls discount levels, and enhances labor efficiency, mainly concentrated in the second half of the fiscal year. In Japan, considering the weakening yen leading to a reduction in price increases for Uniqlo, the bank forecasts a consolidated operating profit margin of 16.9% for the fiscal year 2026, an improvement of 0.3 percentage points year-on-year.

Goldman Sachs expects the company's consolidated operating profit for the first quarter of the fiscal year 2026 to be 184 billion yen, a year-on-year increase of 17%; it has raised the target price for Fast Retailing's Japanese stock (9983.JP) to 60,000 yen, maintaining a "Buy" rating