Uniqlo Business PPT containing data on different parameters

Uniqlo business PPT

1. Uniqlo: Navigating the Diverse Business Landscape Uniqlo, the renowned Japanese fast fashion retailer, has established itself as a global powerhouse with a diverse portfolio of business units. As the company faces challenges posed by labour rights scrutiny and the shift towards sustainable consumption, it is crucial to assess its financial performance and chart a strategic roadmap for the future. This presentation aims to provide the CFO and the board with a comprehensive analysis, identifying the profitable and loss-making business units, and leveraging the DuPont analysis framework to guide decision-making. by PRASAD KALE (FT252064)

2. Uniqlo's Business Segments UNIQLO Japan Uniqlo's flagship segment, UNIQLO Japan, has consistently been a strong performer, contributing a significant portion of the company's overall revenue and operating profit. This segment's focus on high-quality, affordable apparel has resonated well with the domestic market. UNIQLO International The UNIQLO International segment has seen impressive growth, expanding its global footprint and capturing market share in various regions. This segment's ability to adapt to local preferences and deliver a consistent brand experience has been a key driver of its success. GU GU, Uniqlo's more affordable and trendy brand, has also contributed to the company's overall performance. This segment caters to a younger demographic and has been successful in offering fashion-forward products at competitive prices.

3. Uniqlo's revenue has shown a consistent increase over the years from 2019 to 2023, with a notable jump in 2023 reaching 27,626,537 million yen . The total assets and total equity of Uniqlo have been growing steadily from 2019 to 2023. There is a significant increase in total assets and equity in 2022 and 2023, indicating a strong financial position . Uniqlo's gross profit has been increasing year over year, with the highest gross profit in 2023. Operating profit, profit before income taxes, and profit for the period also show a positive trend, with 2023 seeing the highest figures across all these metrics . While total liabilities have increased over the years, the increase in total assets and equity suggests that the company's growth in liabilities is being managed well with corresponding growth in assets and equity. FINANCIAL ANALYSIS

4. Profitability Analysis 1 UNIQLO Japan: Consistent Profitability The UNIQLO Japan segment has consistently generated strong operating profits, showcasing its ability to maintain a profitable business model and adapt to market conditions. 2 UNIQLO International: Promising Growth The UNIQLO International segment has demonstrated impressive growth in both revenue and operating profit, indicating its potential to become a significant contributor to the company's overall financial performance. 3 GU: Fluctuating Profitability The GU segment has experienced some fluctuations in its operating profit, suggesting the need for further optimization and strategic adjustments to enhance its profitability. 4 Global Brands: Underperforming The Global Brands segment has consistently reported losses, indicating the need for a comprehensive review and potential restructuring to address the underlying challenges.

5. Applying the DuPont Analysis 1 Net Profit Margin Analyzing the net profit margin across Uniqlo's business segments will provide insights into their operational efficiency and pricing strategies. 2 Asset Turnover Evaluating the asset turnover ratio will help identify the segments that are effectively utilizing their assets to generate revenue. 3 Financial Leverage Examining the financial leverage ratio will shed light on the segments' capital structure and their ability to optimize the use of debt financing.

6. Year ROE -Uniqlo 2019 18.10% 2020 9.08% 2021 15.12% 2022 14.67% 2023 16.83% ROE Year Assets Per Business Segment (Millions Yen) Uniqlo Japan Uniqlo International GU Global Brands 2019 ¥ 4,57,914 ¥ 7,73,142 ¥ 2,36,049 ¥ 5,43,453 2020 ¥ 5,40,365 ¥ 9,56,413 ¥ 2,89,927 ¥ 6,25,285 2021 ¥ 5,76,126 ¥ 10,68,501 ¥ 3,12,421 ¥ 5,52,927 2022 ¥ 6,87,666 ¥ 12,92,515 ¥ 3,72,785 ¥ 7,65,764 2023 ¥ 7,38,367 ¥ 15,08,696 ¥ 4,27,888 ¥ 6,29,744 Assets Per Business Segment

7. Year Shareholder's Equity per Business Segment (Million Yen) Uniqlo Japan Uniqlo International GU Global Brands 2019 ¥ 2,24,022 ¥ 3,77,830 ¥ 1,15,375 ¥ 2,66,307 2020 ¥ 2,22,985 ¥ 3,94,718 ¥ 1,19,666 ¥ 2,58,710 2021 ¥ 2,67,097 ¥ 4,94,842 ¥ 1,44,740 ¥ 2,55,619 2022 ¥ 3,55,888 ¥ 6,69,779 ¥ 1,93,309 ¥ 3,96,848 2023 ¥ 4,18,785 ¥ 8,55,542 ¥ 2,42,284 ¥ 3,56,750 Shareholder's Equity per Business Segment

8. Year Net Income (Million Yen) Uniqlo Japan Uniqlo International GU Global Brands 2019 71,732 97,233 19,715 2,580 2020 73,280 35,164 15,285 -8,920 2021 82,193 63,290 15,338 -4,680 2022 86,849 1,22,128 10,868 -1,524 2023 82,517 1,58,899 18,297 -2,115 Net Income

9. Operating profit: UNIQLO Japan : The operating profit shows a significant increase from 2019 to 2023, peaking in 2023 . UNIQLO International : A steady increase in operating profit is observed from 2019 to 2023, with a notable surge in 2023 GU : Operating profit remained relatively stable from 2019 to 2022 but experienced a sharp increase in 2023 . Global Brands : Operating profit was negative in 2019, improved slightly in the following years, but still remained relatively low compared to other segments. Number of Stores: UNIQLO Japan : he number of stores shows a slight decline from 2019 to 2023 . UNIQLO International: The number of stores has been increasing steadily from 2019 to 2023 . GU : The number of stores has remained relatively constant, with a slight decline observed towards 2023 . Global Brands : The number of stores has remained stable with a very slight increase over the years . Operating Profit and Number of Stores

10. UNIQLO Japan: A Consistent Performer Stable Revenue UNIQLO Japan has maintained a relatively stable revenue stream, demonstrating its ability to cater to the domestic market's preferences and adapt to changing consumer trends. Consistent Profitability The segment's consistent operating profits highlight its operational efficiency and effective cost management, making it a reliable contributor to Uniqlo's overall financial performance. Optimized Asset Utilization UNIQLO Japan's efficient asset management, as evidenced by its strong asset turnover ratio, suggests that the segment is effectively leveraging its resources to drive growth and profitability. Healthy Financial Structure The segment's prudent financial leverage indicates a well-balanced capital structure, providing a solid foundation for future investments and expansion.

11. UNIQLO International: Promising Growth Expanding Global Footprint The UNIQLO International segment has successfully expanded its global presence, opening new stores in various regions and capturing market share in international markets. Adaptability to Local Preferences The segment's ability to tailor its product offerings and marketing strategies to local preferences has been a key driver of its growth, allowing it to resonate with diverse consumer bases. Optimizing Supply Chain Uniqlo's focus on streamlining its supply chain and logistics operations for the UNIQLO International segment has enabled it to improve efficiency and responsiveness to global market demands.

12. GU: Navigating Fluctuations Evolving Consumer Preferences The GU segment has faced challenges in keeping up with the rapidly changing fashion trends and consumer preferences, leading to fluctuations in its financial performance. Pricing Strategies The need to strike a balance between offering affordable prices and maintaining profitability has been a key focus area for the GU segment. Operational Efficiency Improving operational efficiency, including supply chain management and cost control, will be crucial for the GU segment to stabilize its profitability.

13. Global Brands: Underperforming Consistent Losses The Global Brands segment has consistently reported operating losses, indicating the need for a comprehensive review and potential restructuring. Declining Market Share The segment's inability to maintain a competitive edge and capture market share has contributed to its underperformance. Brand Strategy Evaluation A thorough assessment of the Global Brands segment's brand positioning, product offerings, and marketing strategies is necessary to identify and address the root causes of its underperformance.

14. The Path Forward Segment Strategic Focus Key Initiatives UNIQLO Japan Maintain Profitability Continuous product innovation, cost optimization, and adapting to evolving consumer preferences UNIQLO International Accelerate Global Expansion Strengthen local market presence, enhance supply chain efficiency, and tailor product offerings to diverse consumer needs GU Stabilize Profitability Refine pricing strategies, improve operational efficiency, and stay agile in responding to fashion trends Global Brands Turnaround or Restructure Conduct a comprehensive review, identify and address the root causes of underperformance, and explore strategic options for the segment

15. Conclusion Leveraging Strengths Uniqlo should continue to capitalize on the strengths of its profitable segments, such as UNIQLO Japan and UNIQLO International, to drive overall growth and financial performance. Addressing Challenges The company must address the challenges faced by the underperforming segments, such as GU and Global Brands, through strategic interventions and operational improvements to enhance their profitability. Embracing Sustainability As Uniqlo navigates the evolving landscape of sustainable consumption, it should integrate environmental and social responsibility into its business strategies to maintain its competitive edge and meet the expectations of its stakeholders. Continuous Adaptation Uniqlo's ability to adapt to changing market conditions, consumer preferences, and industry trends will be crucial in ensuring its long-term success and solidifying its position as a global fashion leader.