Uniqlo doubles Inditex’s growth rate as it targets the top spot in global fashion

The Japanese apparel group Fast Retailing, owner of the Uniqlo chain, continues to grow at a rapid pace and could finish 2026 as the world’s second-largest fashion retailer. On Thursday, the company reported record annual results, with double-digit increases in both revenue and profit.

The company, whose strength lies in basic wardrobe staples, closed its 2025-26 fiscal year, which ended in August, with revenue of 3.96 trillion yen. At current exchange rates, that is equivalent to roughly $25.6 billion, up 16.6% from the previous year and a new all-time high. Growth accelerated in the second half of the fiscal year, from March to August, when revenue rose 18.8%.

Those growth rates are more than double Inditex’s current pace. The Spanish fashion giant — which includes brands such as Zara and Oysho — reported a 7.6% increase in revenue in its first fiscal half, from February to July.

Net profit attributable to Fast Retailing also surged, rising 25% to around $3.4 billion at current exchange rates.

However, Fast Retailing’s annual sales and profits are remarkably close to what Inditex generated in just six months: €19.8 billion ($22.6 billion) in revenue and €3.0 billion ($3.4 billion) in net profit, respectively.

The Japanese group has also benefited not only from organic sales growth and international expansion, but from a positive currency effect of 4.4% on annual revenue. This is largely due to the current weakness of the yen against currencies such as the euro and China’s renminbi. When sales generated in those markets are converted back into yen, their value in the Japanese currency increases compared with a year earlier. In the case of the euro, for instance, the foreign-exchange benefit is close to 12%.

For Inditex, the effect is the opposite. The company is currently facing a negative currency impact of around 1%, as revenues earned in weaker currencies lose value when translated into the euro, the currency in which the group reports its results.

Becoming No. 1

In any case, the revenue levels reached by Fast Retailing in the past fiscal year have put the company in a position to overtake H&M as Inditex’s closest challenger in global fashion retail, both online and in stores.

The Swedish group’s fiscal year ends on November 30. Through the first nine months of the year, its cumulative sales were down 4.4% from the same period a year earlier. To match Fast Retailing’s revenue in euro terms, H&M would need to post sales growth of nearly 10% in the final stretch of its fiscal year.

However, the owner of Uniqlo is determined to go even further. The company’s chairman, president and CEO, Tadashi Yanai, who is also its largest shareholder with an 18% stake, has set his sights on becoming the world’s leading apparel retailer.

“The goal of becoming global No. 1 has been clear since our founding,” Yanai said in a presentation posted Thursday on Fast Retailing’s investor website. According to the document, that ambition is now “entering a new phase.”

As key drivers of future growth, Yanai points to the potential of Southeast Asia, where Uniqlo aims to become the brand of choice for the region’s young middle class, as well as a major push for GU, Fast Retailing’s value-fashion chain, which currently operates nearly 500 stores in Japan alone.

The presentation suggests that GU may soon accelerate its international expansion. Yanai says the brand’s goal is to become “a global brand” once it completes the ongoing overhaul of its image and commercial strategy, which is being repositioned with a stronger focus on fashion.

In comments reported by Reuters on Thursday, Yanai reiterated a goal he first announced three years ago: turning Fast Retailing into a company with 10 trillion yen in annual revenue, equivalent to roughly €56.5 billion ($64.5 billion) at current exchange rates.

To get there, he aims to add 500 billion yen in revenue each year, or about €2.8 billion ($3.2 billion). At its current scale, it would take the company around 12 years to reach that target.

“When you say 500 billion yen, in our clothing retail sector, ​that’s a massive company," Yanai said. “If you look around the world, there are regions everywhere with that sort of potential.”

Fast Retailing forecasts revenue growth of 12.3% in fiscal 2027, to 4.45 trillion yen, equivalent to more than €25 billion ($28.5 billion). Even so, that would represent an increase somewhat below the pace Yanai has set as a long-term goal.

The Japanese group expects to maintain double-digit growth in both North America and Europe, where sales rose 35% and 39%, respectively, in the last fiscal year.

Combined, those two markets generated nearly €5 billion ($5.7 billion) in revenue for Uniqlo, surpassing China for the first time despite having around 700 fewer stores there.

The group, which operates seven stores in Spain, ended the year with 3,510 outlets worldwide and plans a net addition of 35 stores during the current fiscal year. According to the information released on Thursday, none of those openings are expected to be in the Spanish market.

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