Uniqlo Owner Warns Of Price Hikes As Trump Tariffs Start To Bite

Uniqlo owner Fast Retailing said Thursday that higher U.S. tariffs would start impacting its North American operation significantly from later this year and said that it planned to hike prices as a result.

Despite what is expected to be a record year for the Japanese fashion retailer, with Fast Retailing pointing to significant international sales growth, including in the U.S., a slowdown in China and trading disruption in North America threatens to hit trade and pricing.

Altogether, the company said that it expects the tariffs will reduce profits by 1% in fiscal 2025, after Fast Retailing shipped products early to mitigate the impact.

Earlier this week, in his latest announcement, U.S. President Trump set a new August 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 conceded in Fast Retailing’s 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 apparel sold in the U.S. is produced in Southeast Asia and South Asia and this week Trump notified major source market Sri Lanka that it would be hit by a 30% tariff from August 1, while its competitor Vietnam – which at one point was facing crippling tariff levies – now should see a lower 20% U.S. tariff.

Uniqlo Parent Earnings

For the current fiscal year to end-August, Fast Retailing kept its operating profit forecast at $3.7 billion, as it expected limited tariff impacts thanks to early shipments to the U.S. market to try and circumnavigate the impact of increased duties.

“FY2025 impact is likely to be limited, whatever the tariff rate,” the company said in an earnings statement, adding it has already shipped a substantial amount of merchandise to the U.S. already. Fast Retailing added that operating profits in the three months to May 31 rose 1.4% to circa $1 billion, below a consensus forecast of about $1.05 billion.

It also expected lower fourth-quarter sales and profits in China, its largest overseas market with 900 stores, because of overall lacklustre demand for apparel from Chinese consumers.

The company has recently looked to North America and Europe for growth, in part because of the anticipated slowdown in China. In the three months through May 2025, revenue rose 8.3% to around $3 billion and operating profit increased to just under $500 million, up 1.5%. In local currency terms, revenue increased by approximately 14% and operating profit by approximately 7%.

In a bullish update, Fast Retailing said that Uniqlo operations in South Korea, the Southeast Asia, India & Australia region, North America, and Europe all reported higher revenues and profits.

The strong performance in those markets was driven partly by robust sales of strongly marketed core summer ranges along with the continued opening of new stores that showcase the company’s LifeWear brand value, which it has been heavily promoting.

In the nine months through May 2025, revenue totaled $9.96 billion (+12.7% year-on-year) and operating profit totaled around $1.6 billion (+8.4%).

Markets have reacted to the impending price increases where Fast Retailing was already the fourth-biggest faller among large-cap stocks in the Asia-Pacific in the first half of 2025, declining over 9%. However, on a 12-month basis the Uniqlo owner’s stock value is still nearly 6% ahead.