Last week, Japan, where the company operates some 800 Uniqlo stores, declared a fourth coronavirus state of emergency in Tokyo, just two weeks before the Olympic Games are due to begin.
"With the declaration of a state of emergency again, it is expected that customers' willingness to go out and shop will be more restrained," Chief Financial Officer Takeshi Okazaki told reporters in Tokyo. "We expect that trend will continue for the time being, so we have revised our business forecast to reflect this."
Fast Retailing said on Thursday it now expects operating profit for the fiscal year ending August to rise 64% year-over-year to 245 billion yen ($2.23 billion), versus a previous estimate of 255 billion yen.
Profit rose to 227.9 billion yen in the nine months ended May from 134.4 billion yen in the year-earlier period that was hit hard by the coronavirus crisis.
The interim results were bolstered by strong sales of masks, lounge wear and other goods that befitted the stay-at-home lifestyle of the pandemic.
The company has been among the more resilient retailers during the COVID-19 pandemic, as Uniqlo's focus on China and Japan helped it escape the worst of the downturn in the United States and Europe.
But the company had to deal with crises in Myanmar and China that upset supply lines and created reputational challenges.
Earlier this year, it was forced to halt operations at some partner facilities in Myanmar, where a military coup has led to social unrest.
In China, the company and other foreign brands are facing customer backlash over criticisms of alleged human rights abuses in Xinjiang province. Fast Retailing operates about 800 Uniqlo stores on the mainland.
Chief executive Tadashi Yanai has declined to comment on Xinjiang issues, saying his company remains politically neutral.
The company lost an appeal with United States Customs in May after a clothing shipment was impounded because of suspected violations of a ban on Xinjiang cotton.
Earlier this month, a media report said Fast Retailing was among four retailers being investigated by French prosecutors for suspected concealing of human rights abuses in China. The company said there was no forced labour in its supply chain.
CFO Okazaki reiterated that the company wasn't aware of any problems in its supply chain and that it would cooperate with any probe from authorities.
(Reporting by Rocky Swift in Tokyo; Editing by Sayantani Ghosh, Jacqueline Wong and Kim Coghill)
By Rocky Swift