TOKYO, July 14 (Reuters) - Fast Retailing posted its fifth straight drop in quarterly profit after sales at its Uniqlo casual-clothing chain sagged following the March earthquake, but it stuck to its annual outlook and noted solid demand for lighter apparel as shoppers brace for a long, hot summer.

Uniqlo

The 4.6 percent decline in March-May operating profit at Japan's biggest apparel retailer came as the disaster and ensuing power crisis forced businesses to curtail operating hours and services and prompted consumers to curb spending.

But spending has been gradually picking up since then, and retailers are eyeing an extra boost from a government campaign to get office workers to swap suits for lighter wear amid lower air conditioning use due to power shortages. Moreover, temperatures in June already hit their highest in at least 50 years in some regions, weather agency data shows.

"The weather has been very hot and if this continues, given the need to save electricity, I think there will be more demand for summer clothing," said Tokyo-based Mitsushige Akino, Chief Fund Manager, Ichiyoshi Investment Management.

"And if you look at the economic environment, it's not as if the income or spending situation is getting better. So I think there will be plenty of opportunities for the likes of Uniqlo to take advantage of that," Akino added.

Fast Retailing' s operating profit fell to 22.5 billion yen ($285 million) in March-May, as same-store sales at Uniqlo outlets in its home market fell 1.9 percent during the quarter compared with a year earlier.

Still, Fast Retailing, which aims to become the world's No.1 apparel retailer with in the next ten years, kept its forecast for a 3 percent rise in domestic same-store sales for the second half after a first-half plunge of 9.9 percent.

"Since May summer items have been selling well, particularly inner wear and 'Super Cool Biz' items," executive vice president Nobuo Domae told reporters at a briefing, referring to the government's cooler-clothing campaign.

Fast Retailing, whose rivals include Sweden's H&M Hennes & Mauritz (HMb.ST) and U.S.-based Gap , kept its operating profit forecast at 121.5 billion yen for the financial year ending Aug. 31, down 8.2 percent from the previous year. The company had raised its outlook in April.

The forecast matches the average estimate in a poll of 22 analysts by Thomson Reuters I/B/E/S.

The company, which aims to open around 200 Uniqlo branches annually in Asia, saw its third-quarter profits in the region double to 1.8 billion yen, although that made up less than 10 percent of its overall operating profit.

Fast Retailing runs about 150 Uniqlo stores overseas, but has more than 800 in Japan.

Shares of Fast Retailing have risen around 10 percent since March 11, outperforming a 3 percent drop in the benchmark Nikkei average .

The stock closed up 0.4 percent before the announcement on Thursday, against a 0.3 percent fall in the Nikkei.

By James Topham
($1 = 79.015 Japanese Yen)
(Additional reporting by Isabel Reynolds; Editing by Chris Gallagher)