Fast Retailing, the Japanese parent company of global apparel brand Uniqlo, has warned that higher US tariffs will significantly affect its American operations from later this year. In response, the company plans to implement selective price increases to offset rising import costs.
Concerns over a resurgence in inflation and broader economic instability have been heightened by US President Donald Trump’s unpredictable tariff measures. These actions have already dampened consumer sentiment across major retail markets, including the United States.
Earlier this week, President Trump announced a new deadline of 1 August for the implementation of “reciprocal” tariff rates, which are expected to apply broadly to nearly all US trading partners.
“It is unavoidable that we will be significantly affected from autumn and winter,” said Takeshi Okazaki, Chief Financial Officer of Fast Retailing, during the company’s quarterly earnings briefing. “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.”
A large proportion of Uniqlo’s US inventory is sourced from manufacturing hubs in Southeast and South Asia. In a formal notification on Wednesday, President Trump confirmed that Sri Lanka—an important apparel exporter to the US—would face a 30 per cent tariff beginning 1 August. Vietnam, another key supplier, will be subject to a 20 per cent tariff, although products trans-shipped through Vietnam from third countries will be subject to a steeper 40 per cent levy.
For the current financial year ending August, Fast Retailing maintained its operating profit forecast at ¥545 billion, citing the benefit of early product shipments to the US market. “FY2025 impact likely to be limited, whatever the tariff rate,” the company stated in its earnings release, noting that a substantial portion of merchandise had already been delivered to the United States.
In the three months to 31 May, operating profit rose 1.4 per cent to ¥146.7 billion (approximately US$1.0 billion), falling short of the ¥153.8 billion consensus estimate from five analysts polled by LSEG.
Founded with a single store in Hiroshima four decades ago, Uniqlo has expanded to more than 2,500 locations worldwide. Its business model—selling affordable fleece and cotton garments primarily made in China and other Asian markets—has come under pressure from shifting geopolitical trade dynamics and weakening consumer demand in key regions.
Sales in China, Uniqlo’s largest overseas market with over 900 stores, have declined amid broader economic uncertainty. The company anticipates lower revenue and profits in China for the fourth quarter, citing subdued demand for apparel.
With growth slowing in China, Fast Retailing has shifted focus towards expansion in North America and Europe. However, shares in the company have struggled, falling approximately 8 per cent in the first half of 2025—ranking it the fourth-worst performer among Asia-Pacific large-cap stocks, according to LSEG data. Shares closed down 0.9 per cent ahead of the earnings release.
