*

Fast Retailing's ( FRCOF ) Q2 profit expected to rise 14% to 125.9

billion

yen

*

US tariffs pose challenges, but impact seen less severe

than on

other industries

*

Domestic sales boosted by tourism and weak yen

*

Shares down 19% in 2025 after soaring nearly 50% last year

By Rocky Swift

TOKYO, April 9 (Reuters) - The operator of Uniqlo,

Japan's Fast Retailing ( FRCOF ), 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 U.S. tariffs.

Fast Retailing ( FRCOF ) is expected to post a 14% rise in operating

profit to 125.9 billion yen ($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% 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 U.S. 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 ( FRCOF ),

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, U.S. 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 ( FRCOF ) shares have fallen more than 4% this month,

as Trump laid out his tariffs plan. They are down 19% in 2025,

after surging nearly 50% 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% reciprocal tariff

on non-auto products, while duties on Chinese goods will rise to

104%.

UBS analysts said that Uniqlo goods shipped to North America

are procured from sources outside China, and Fast Retailing's ( FRCOF )

tariff costs would be an estimated 34.3 billion yen next fiscal

year, curbing business profit by about 6%.

"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 ( FRCOF ) 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.

($1 = 145.3900 yen)

(Reporting by Rocky Swift; Editing by Muralikumar Anantharaman)