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The largest clothing retailer in Asia – Fast Retailing Co. – made an official statement today, revealing that it reduced its initial projection for its annual profit due to increasing costs and decreasing demand. The company posted a net profit decline, which amounted to 1.4% during the first half of its financial year.

Fast Retailing Co. said that its net income for the financial year that is to end in August 2014 is expected to be about 88 billion yen (865 million dollars). The companys forecast is lower than the initially projected one, which was estimated to 92 billion yen. The result is also lower than the average analysts estimates, which were compiled by Bloomberg. The company, however, increased its initial revenue projection from 1.32 trillion yen to 1.37 trillion yen.

Although Fast Retailing Co. has a considerable overseas presence in most major shopping districts, the profit margins of the casual clothing stores of the company in Japan were reported to have fallen. According to Bloomberg, the operating margin of Fast Retailing Co. declined 23% from a year earlier to 10% during the second quarter.

The billionaire Tadashi Yanai, who established the company commented on its difficulties in an interview, cited by Bloomberg: “I dont have an optimistic view about consumption in Japan.”

That is one of the reasons why over the last few years the company has put its focus on investing in its foreign expansion, in pursuit of its goal of becoming the largest apparel retailer by sales globally in six years. Mr. Yanai, the Chief Executive Officer of Fast Retailing, is now relying on companys foreign expansion in order to boost its growth. He also said he has been considering the idea of increasing the number of Fast Retailings outlets located in China from 267 to 1 000.

According to Financial Times, shares of Fast Retailing Co. Ltd fell 1.45% to close at 36,710 JPY in Tokyo today, while companys one-year return rate was 9.58%. The same media reported that the 18 analysts offering 12-month price targets for Fast Retailing Co. Ltd have a median target of 36,250, with a high estimate of 48,000 and a low estimate of 20,000. The median estimate represents a -2.68% decrease from the last price of 37,250.

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