The operator of Uniqlo, Japan’s Fast Retailing, is expected to post another quarter of strong earnings on Thursday, but the focus will be on how the global clothing chain navigates a trade environment thrown into disarray by new US tariffs.

Fast Retailing is expected to post a 14 per cent rise in operating profit to US$866 million in the three months through February from a year earlier, based on the LSEG consensus forecast drawn from six analysts.

That would be a record for the second quarter and a near doubling of the 7.4 per cent profit growth of the first quarter.

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 US President Donald Trump, along with retaliation by some of America’s trading partners.

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.

The tariffs will certainly be a negative for Fast Retailing, said independent analyst Mark Chadwick, but the measures will have the same impact on its retail peers and have a worse effect on other industries.

“Textile supply chains are probably more flexible than, say auto supply chains,” said Chadwick, who writes on the Smartkarma platform. “In short, US tariffs will have a negative impact on Fast earnings looking out over the next 12 months, but less so than other global firms like Nintendo, Toyota.”

Shares retreat after 2024 jump

Fast Retailing shares have fallen more than 4 per cent this month, as Trump laid out his tariffs plan. They are down 19 per cent in 2025, after surging nearly 50 per cent last year.

Its founder Tadashi Yanai, Japan’s richest man, aims to make his company the world’s No. 1 clothing brand. Yanai, due to speak at Thursday’s earnings briefing, has long been an advocate of free trade and has defended the company’s business dealings in China when human rights concerns there have sprung up.

Trump said Japan would be hit with a 24 per cent reciprocal tariff on non-auto products, while duties on Chinese goods will rise to 104 per cent.

UBS analysts said that Uniqlo goods shipped to North America are procured from sources outside China, and Fast Retailing’s tariff costs would be an estimated $236,011 million next fiscal year, curbing business profit by about 6 per cent.

“We will be watching closely whether a heightened price consciousness among consumers leads them to re-rate the balance between value and pricing at Uniqlo, potentially translating into business opportunities over the medium term,” UBS’s Takahiro Kazahaya wrote in a report this week.

Fast Retailing expects operating profit to reach 530 billion yen in the fiscal year ending in August, which would be a fourth straight year of record earnings.

Domestic sales have recently gotten a boost from a surge in duty-free shopping amid a tourism boom in Japan fuelled by a weak yen.

• Reporting by Rocky Swift; Editing by Muralikumar Anantharaman, of Reuters.