Fast Retailing Co., Ltd.
October 13, 2016

Analysts’ Meeting Q&ABusiness Results for Fiscal 2016 (September 2015 to August 2016)
Below are questions from our analyst’s meeting concerning business results for fiscal 2016,or the twelve months from September 2015 through August 2016. The answers have beenedited to keep them short and clear.
Q: You have set yourselves medium-term targets for annual revenue of ¥3 trillion and anoperating profit margin of 15%. How do you intend to achieve that higher OP margin?
A: Tadashi Yanai, Chairman, President and CEO – First by expanding our global operations. As
we expand our global operations, we must also instigate changes in our actual corporate framework,so we don’t simply reduce business cost ratios to curtail bloated expenses, but to pursue more
efficient expense ratios as a growing corporate entity. A small portion of the UNIQLO International
segment is still not operating successfully, but we expect that area will also start generating better
results from next year.
We are also looking to expand the Group through digital innovation. We have already started tointroduce Ariake-style next-generation warehouse systems around Japan, and we plan to open
more of these centers in Asia, China, Europe and the United States. Our ultimate aim is to reach astage where we can deliver products to customers directly from the factory.

Q: You said you expect to achieve approximately 2% year-on-year growth in the same-store
sales + online sales measure for UNIQLO Japan in fiscal 2017. How firm is this forecast?
A: CEO Yanai – I think that figure is most definitely achievable.
Q: This is a question about GU. Womenswear constitutes a large proportion of the current
GU product range but, as you expand your GU store network, do you plan to also strengthen
your menswear and kids wear ranges? Also, when you decide to expand GU’s internationalpresence, you will face competitors such as H&M and ZARA, in a market where consumers
tend to prefer stylish European fashion. GU’s inherent fashion style is a little different. Is thisa concern in terms of your international expansion strategy?
A: Osamu Yunoki, CEO G.U. Co., Ltd. – First, we do intend to put considerable effort intostrengthening men’s and kid’s clothing going forward. Our initial task was to establish a GU brandposition that emphasized “trendy fashion,” and that is why we focused largely on designing anddeveloping women’s wear to date. That strategy has proved successful in terms of establishing theGU brand, and clearly differentiating it from UNIQLO. Now, we have reached the stage where wecan broaden our focus. Men’s and kid’s wear both harbor huge growth potential for GU, so we wantto expand these ranges, ensuring a distinct differentiation with UNIQLO. Menswear doesn’t require
quite as many design or trendy features as womenswear. Since UNIQLO already offers high-quality
basic menswear with a hint of fashion, we would like to focus on offering a more design-focused,1

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October 13, 2016

trendy feel for its men’s ranges. In fact, I don’t think it would sell unless we offered that additional
trendy flavor.
In terms of developing GU in international markets, we will concentrate first on the Asian market.
The clothes we wear today are “western clothes”, originating from Europe. Fast fashion wasoriginally developed by H&M and ZARA. For its part, GU collects information and ideas on latest
fashion trends from around the world, and incorporates those ideas into its designs along with anelement of distinctive Japanese DNA. It might sound a little abstract, but the GU brand definitelyincorporates that renowned Japanese talent for ensuring just the right balance in its productofferings: GU clothes are not over-designed, they are just right. GU clothes are easy to wear andeasy to coordinate. These are some of GU’s most attractive features, and what GU customers inShanghai and Taiwan say they like about the brand. We will have to experiment along the way, but
we are determined to carve a unique position for the GU brand in international markets, weaving aunique Japan-style DNA into exciting but easy-to-wear clothes.

Q: From what you have just said, it seems you plan to position GU in Asian markets as abrand offering “fashion with an intrinsic Japanese flavor,” and let customers discover thevalue of that Japanese-style DNA for themselves. Is that right?
A: GU CEO Yunoki – To be able to carve new demand, it is extremely important that customers
discover and recognize the value of GU for themselves. Customers want to enjoy fashion, but thatcan require considerable effort. It can be hard to find for customers to find which of the latest trends
really suits them. However, exploring fashion trends can be very exciting and fun. If we canemphasize that fact and make it easier for customers to enjoy fashion, then I believe we draw out
latent demand for fast fashion, GU style.

Q: When do you expect the Ariake distribution center to be up to full speed, and are the 10
other distribution centers around Japan also operating already?
A: CEO Yanai – I expect the warehouse to be operating fully by roughly next spring. We are not justtalking about the launch of a single distribution center but the overhaul of our entire supply chain
and corporate framework, so we can’t complete the process in a single leap. Having said that, you
should start to see obvious and genuine changes in terms of expanded distribution ande-commerce-related services from spring 2017.
A: Takeshi Okazaki, Group Executive Vice President & CFO – We have started store and online
deliveries from the Ariake warehouse. In that sense, it is already fulfilling all functions. However, toachieve what we define as full operation, we have to attain specific targets on productivity andprocessing efficiency. That will take a little more time. I also expect customers will notice a distinct
change in the way UNIQLO operates from around next spring.
Regarding the other 10 national distribution centers, they have started operating, but not all 10centers are intended to deal with both physical-store and online deliveries. In fact, only a few of the2Fast Retailing Co., Ltd.
October 13, 2016

centers will conduct EC deliveries.

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