China "reported a decline in revenue and considerable drop in profits" in the three months to November 30, Fast Retailing said Thursday as it reported a 22 percent rise in overall net income.

This was "after failing to compile sufficient product mixes (in China) suited to warm winter weather or develop a sufficiently detailed response to the minute needs of individual regions" it added.

The firm's operations in China could also suffer further after chief executive Tadashi Yanai told the BBC in November that Uniqlo did not use cotton from the Xinjiang region.

China has been accused of incarcerating more than one million Uyghurs and other Muslim minorities in the northwestern region. Beijing rejects the allegations.

Yanai's comments sparked online calls in China for consumers to boycott Uniqlo's roughly 1,000 outlets in the country.

Fast Retailing's finance chief Takeshi Okazaki told reporters on Thursday that it did not detect any impact on its sales from this in the last quarter.

"But we will keep a close eye on how this situation will develop," he said.

Fast Retailing shares were down 6.7 percent at 48,560 yen in Tokyo afternoon trade, having fallen as much as 7.8 percent earlier.