Japan’s Fast Retailing Co clocked a 7 per cent second-quarter profit growth that fell slightly short of market estimates, but the Uniqlo owner retained its annual profit guidance, keeping it on course to report a third straight year of record earnings.

Operating profit was 110.4 billion yen ($721.80 million) in the three months ended in February, compared with 103 billion yen the prior year and the 114.3 billion yen average estimate of five analysts in an LSEG survey.

Fast Retailing on Thursday also left its full-year operating profit forecast unchanged at 450 billion yen.

It revised down full-year revenue guidance by 20 billion yen to 3.03 trillion yen to reflect weaker growth in the first six months.

Known for its fleece jackets and inexpensive basic clothing items, Fast Retailing is benefiting from a recovery in China, its biggest foreign market, and a slide in the yen to a 34-year low that boosts the value of its overseas sales.

And as the company charts an aggressive growth trajectory in Greater China, North America and Europe, it is taking advantage of a post-Covid shift among many consumers for value over luxury.

The results follow a 25 per cent jump in earnings in the first quarter on the back of strong sales in China following years of pain during the coronavirus pandemic. With its 922 stores in mainland China, Fast Retailing is a bellwether for global retailers operating in the world’s second-biggest economy.

The company, founded and run by Tadashi Yanai, Japan’s richest man, has posted record results in the past two years and is projecting profits to climb again this year.

Prior to the earnings, shares in Fast Retailing closed down 0.6 per cent, versus a 0.4 per cent drop in the broader market.

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