Uniqlo Owner Warns of Significant Tariff Impact, Plans Price Hikes Amid Global Economic Uncertainty

Fast Retailing, owner of Uniqlo, warns of significant tariff impact from autumn/winter, plans to raise prices to mitigate the blow. The company's operating profit for FY2020 is expected to be ¥545 billion, with limited tariff impact due to early shipments to the US market. However, lower sales and profit are expected in China due to weak consumer demand. The company is focusing on creating a sustainable business that generates profits in North America and Europe.

Fast Retailing, the owner of the Uniqlo clothing brand, has announced that it expects higher U.S. tariffs to significantly impact its North American operations starting from autumn and winter. The company has stated that it plans to raise prices to mitigate the financial blow caused by these tariffs. This comes amidst concerns about resurgent inflation and an economic slowdown triggered by the erratic tariff roll-out by U.S. President Donald Trump [1].

The majority of Uniqlo products sold in the U.S. are produced in Southeast Asia and South Asia. However, the company has been facing challenges due to the recent tariff announcements. In a letter on Wednesday, Trump notified Sri Lanka, a major apparel exporter to the U.S., that it would face a 30% tariff from August 1. Meanwhile, Vietnam, a competitor, will face a lower 20% U.S. tariff, but trans-shipments from third countries through Vietnam will face a 40% levy [2].

Fast Retailing expects the tariffs to reduce its profits by 1% in fiscal 2025. The company has already shipped a substantial amount of merchandise to the U.S. to mitigate the impact of increased duties. For the current fiscal year to end-August, the company kept its operating profit forecast at ¥545 billion, as it expected limited tariff impacts due to these early shipments [1].

The company also expects lower fourth-quarter sales and profits in China, its largest overseas market, due to overall lacklustre demand for apparel from Chinese consumers. Fast Retailing has been looking to North America and Europe for growth due to 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% [1].

Fast Retailing's stock has been affected by these developments. In the first half of 2025, shares in the company were the fourth-biggest loser among large-cap stocks in the Asia-Pacific, declining about 9%. However, on a 12-month basis, the company's stock value is still nearly 6% ahead [2].

The company's financial officer, Takeshi Okazaki, stated that while it will be difficult to absorb all costs, the company's 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 [1].

References:
[1] https://www.forbes.com/sites/markfaithfull/2025/07/10/uniqlo-owner-warns-of-price-hikes-as-trump-tariffs-start-to-bite/
[2] https://www.investing.com/news/stock-market-news/uniqlo-operator-fast-retailing-9month-profit-rises-122-4129150