Fast Retailing Co Ltd demonstrated fast growth over the last few years. Will the growth continue?
15/10/2015 • About Fast Retailing Co Ltd (
$6288) • By InTwits
Fast Retailing Co Ltd is a growth stock in Retail industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Fast Retailing Co Ltd showed fast growth in the last financial year. Fast Retailing Co Ltd's revenue surged on 21.6% in FY2015. At the same time Fast Retailing Co Ltd well managed its profitability and showed even faster growth in EBITDA of 24.9% for the same period.
In the last 3 years the company showed fast revenue growth of 21.9% from FY2012 to FY2015 annualy. EBITDA surged on 9.24% from FY2012 to FY2015 annualy.
Fast Retailing Co Ltd ($6288) financials for the last 5 years
| mln. JPY | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 820,349 | 928,669 | 1,142,971 | 1,382,935 | 1,681,781 |
|---|
| Revenue growth, % | | 13.2% | 23.1% | 21.0% | 21.6% |
|---|
| Gross margin, % | 51.9% | 51.2% | 49.4% | 50.6% | 50.5% |
|---|
| SG&A, % | 35.1% | 35.0% | 35.2% | 37.5% | 37.7% |
|---|
| EBITDA | 141,716 | 150,687 | 157,708 | 157,286 | 196,414 |
|---|
| EBITDA growth, % | | 6.3% | 4.7% | -0.3% | 24.9% |
|---|
| EBITDA margin, % | 17.3% | 16.2% | 13.8% | 11.4% | 11.7% |
|---|
| Net Income | 54,354 | 71,654 | 104,595 | 74,546 | 110,027 |
|---|
| Net Income margin, % | 6.63% | 7.72% | 9.15% | 5.39% | 6.54% |
|---|
| |
| CAPEX | 18,902 | 23,980 | 27,668 | 41,414 | 44,663 |
|---|
| CAPEX/Revenue, % | 2.30% | 2.58% | 2.42% | 2.99% | 2.66% |
|---|
| Debt | 28,261 | 23,185 | 33,494 | 31,498 | 29,701 |
|---|
| Cash | 64,386 | 132,238 | 296,708 | 314,049 | 355,212 |
|---|
| Net Debt/EBITDA | -0.3x | -0.7x | -1.7x | -1.8x | -1.7x |
|---|
| |
| ROIC, % | 33.3% | 31.6% | 23.7% | 17.9% | 19.8% |
|---|
| ROE, % | 18.1% | 20.4% | 21.8% | 12.5% | 16.1% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. EBITDA margin increased slightly on 0.300 pp from 11.4% to 11.7% in FY2015. If we look for the longer period EBITDA margin dropped on 4.50 pp from 16.2% in FY2012 to 11.7% in FY2015.
Fast Retailing Co Ltd shows attractive ROIC at 19.8% for the last 12 months which assumes stable development model. Three years ago it was considerably higher at 31.6%. For the last three years the average ROIC was 20.5%.
Fast Retailing Co Ltd showed fast Net Income margin growth of 1.10 pp from 5.40% to 6.50% in FY2015. In the last 3 years Fast Retailing Co Ltd showed big decline in Net Income margin of 1.20 pp from 7.70% in FY2012 to 6.50% in FY2015.
Fast Retailing Co Ltd operates at ROE of 16.1%. For the last three years the average ROE was 16.8%.
Capital expenditures (CAPEX)
Fast Retailing Co Ltd's CAPEX/Revenue was 2.66% in FY2015. The company's CAPEX/Revenue increased slightly on 0.0735 pp from 2.58% in FY2012 to 2.66% in FY2015. It's average level of CAPEX/Revenue for the last three years was 2.69%.
Leverage (Debt)
Fast Retailing Co Ltd has negative net debt at -1.7x Net Debt/EBITDA - at the same time with high growth. If we look for the longer period Fast Retailing Co Ltd showed fast leverage growth of 0.93x from -0.72x in FY2012 to -1.66x in FY2015.
Management team
Tadashi Yanai runs Fast Retailing Co Ltd as a CEO.
Peers in Retail
Below we provide Fast Retailing Co Ltd benchmarking against other companies in Retail industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| China Household Holdings Ltd ($692) | -87.0% | -32.8% | 5,357.9% | 76.2% | |
| Ming Fung Jewellery Group Ltd ($860) | 21.9% | 3.3% | -14.9% | 54.3% | |
| Merry Garden Holdings Ltd ($1237) | 53.9% | 37.1% | 12.8% | 47.6% | |
| Luk Fook Holdings International Ltd ($590) | | 47.2% | 12.6% | 43.3% | -17.1% |
| NewOcean Energy Holdings Ltd ($342) | 19.3% | 23.1% | 15.9% | 36.0% | |
| |
|---|
| Median (109 companies) | 21.8% | 10.0% | 5.9% | 2.8% | -6.4% |
|---|
| Fast Retailing Co Ltd ($6288) | | 13.2% | 23.1% | 21.0% | 21.6% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Culture Landmark Investment Ltd ($674) | 77.5% | 91.1% | 99.4% | 99.5% | |
| Modern Beauty Salon Holdings Ltd ($919) | 97.3% | 97.4% | 95.9% | 96.8% | 96.7% |
| Vongroup Ltd ($318) | | | | 95.1% | 99.1% |
| Nanjing Sinolife United Co Ltd ($3332) | 80.6% | 86.5% | 89.3% | 90.9% | |
| Embry Holdings Ltd ($1388) | 82.3% | 81.2% | 80.4% | 82.3% | |
| |
|---|
| Median (98 companies) | 39.4% | 37.2% | 36.4% | 35.1% | 45.3% |
|---|
| Fast Retailing Co Ltd ($6288) | 51.9% | 51.2% | 49.4% | 50.6% | 50.5% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Maoye International Holdings Ltd ($848) | 45.5% | 47.4% | 46.3% | 73.2% | |
| China Dongxiang Group Co Ltd ($3818) | 5.6% | 6.0% | 5.6% | 58.3% | |
| Nanjing Sinolife United Co Ltd ($3332) | 47.8% | 51.6% | 56.9% | 54.4% | |
| Lifestyle International Holdings Ltd ($1212) | 49.6% | 47.5% | 47.0% | 44.7% | |
| Golden Eagle Retail Group Ltd ($3308) | 52.1% | 48.5% | 47.3% | 42.8% | |
| |
|---|
| Median (109 companies) | 13.1% | 9.6% | 7.1% | 7.9% | 6.0% |
|---|
| Fast Retailing Co Ltd ($6288) | 17.3% | 16.2% | 13.8% | 11.4% | 11.7% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Intime Retail Group Co Ltd ($1833) | 58.4% | 28.3% | 55.4% | 37.0% | |
| Future Bright Holdings Ltd ($703) | 6.2% | 2.6% | 3.7% | 36.8% | |
| Sage International Group Ltd ($8082) | 20.4% | 236.6% | 28.2% | 35.4% | |
| Maoye International Holdings Ltd ($848) | 30.9% | 32.8% | 24.1% | 31.5% | |
| Tsui Wah Holdings Ltd ($1314) | 5.2% | 8.3% | 9.3% | 30.5% | 10.6% |
| |
|---|
| Median (109 companies) | 3.9% | 4.0% | 3.6% | 3.5% | 2.2% |
|---|
| Fast Retailing Co Ltd ($6288) | 2.3% | 2.6% | 2.4% | 3.0% | 2.7% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 48.1% | 50.7% | -4.6% | 81.3% | 71.8% |
| Starbucks Corp ($4337) | 36.4% | 36.4% | -6.0% | 52.8% | |
| Sa Sa International Holdings Ltd ($178) | 45.7% | 53.5% | 52.7% | 49.0% | 39.8% |
| Coach Inc ($6388) | 82.0% | 82.3% | 68.7% | 45.0% | 20.8% |
| Nanjing Sinolife United Co Ltd ($3332) | 57.4% | 67.3% | 68.1% | 32.2% | |
| |
|---|
| Median (109 companies) | 16.6% | 11.8% | 8.2% | 8.2% | 3.1% |
|---|
| Fast Retailing Co Ltd ($6288) | 33.3% | 31.6% | 23.7% | 17.9% | 19.8% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Sparkle Roll Group Ltd ($970) | -0.8x | 0.6x | 4.0x | 9.3x | 23.5x |
| China Yongda Automobiles Services Holdings Ltd ($3669) | 3.3x | 3.4x | 4.7x | 5.5x | |
| Zhongsheng Group Holdings Ltd ($881) | 2.2x | 4.6x | 4.5x | 5.3x | |
| NewOcean Energy Holdings Ltd ($342) | 35.2x | 6.2x | 6.1x | 5.3x | |
| Century Ginwa Retail Holdings Ltd ($162) | 6.5x | 2.0x | 2.5x | 4.8x | |
| |
|---|
| Median (85 companies) | -0.8x | -0.5x | -0.8x | -0.2x | -0.6x |
|---|
| Fast Retailing Co Ltd ($6288) | -0.3x | -0.7x | -1.7x | -1.8x | -1.7x |
