Flash Report on the Consolidated Financial Results
for the First Half of the Fiscal Year Ending February 28, 2019
October 11, 2018
Listed Company Name: Lawson, Inc.
Tokyo Stock Exchange (First Section)
Code No.: 2651
(URL http://www.lawson.jp/en/ir)
Company Representative: Sadanobu Takemasu, President and CEO, Representative Director,
Chairman of the Board
Contact: Tomoki Takanishi, Deputy Senior Vice President, Finance and Accounting Division Director
Tel.: +81-3-5435-2773
Scheduled date for submission of quarterly securities report: October 12, 2018
Scheduled date for payment of dividend: November 9, 2018
Supplementary materials for quarterly financial results: Yes
Holding of presentation of quarterly results: Yes (for institutional investors and analysts)(Amounts less than one million yen are truncated)
1. Consolidated operating results for the first half ended August 31, 2018 (from March 1, 2018 to August 31,
2018)(1) Consolidated operating results (cumulative)
Note: Percentages represent increases (decreases) compared with the corresponding period of the previous fiscal
year.

For the first half ended
August 31, 2018
August 31, 2017
Note: Comprehensive income:Gross operating
revenue

Operating income

Ordinary income

Millionsof yen351,973
329,402

Millionsof yen34,48538,945

Millionsof yen33,53638,456

%
6.9
7.6

%
(11.5)(2.5)

For the first half ended August 31, 2018
For the first half ended August 31, 2017%(12.8)
0.2

19,223 million yen
24,500 million yen

Profit per share

Diluted profit per shareYen
179.32236.36Yen
179.23236.21For the first half ended
August 31, 2018
August 31, 2017

Profitattributable toowners of parent
Millions%of yen17,942 (24.1)
23,644
4.6(21.5)%
17.9%(2) Consolidated financial position

Millions of yen

Millions of yen

Shareholders’ equity
ratio%

August 31, 2018

960,760

288,198

29.4

February 28, 2018

900,256

281,446

30.6

As of

Total assets

Net assets

Reference: Shareholders’ equity:
As of August 31, 2018
As of February 28, 2018282,174 million yen
275,658 million yen

2. Dividends

2017 fiscal year－

Annual dividends per share
1H
3Q
Year-end
Yen
Yen
Yen
127.50－127.502018 fiscal year－

127.50

1Q
Yen

2018 fiscal year (forecast)
Note: Revision of the most recent dividends forecast: None－

127.50

Total
Yen
255.00
255.003. Forecast of consolidated operating results for the 2018 fiscal year ending February 28, 2019 (from March 1,
2018 to February 28, 2019)
Note: Percentages represent increases (decreases) compared with the corresponding period of the previous fiscal
year.
Profit attributable
Profit per
to owners of
shareparentMillions
Millions
Millions
Millions
%
%
%
%
Yen
of yenof yenof yenof yen2018 fiscal year
722,000
9.8
60,000(8.8) 57,000(12.5) 28,000
4.4 279.83
Note: Revision of the most recent consolidated operating results forecast: Yes
Gross operating
Operating income Ordinary income
revenue

4. Notes(1) Change in significant subsidiaries during the quarterly consolidated period (Changes in certain specified
subsidiaries resulting in changes in scope of consolidation): None
Added: None

Excluded: None

(2) Adoptions of specific accounting methods for preparing quarterly financial statements: None
(3) Changes in accounting policies, changes in accounting estimates or restatements
1. Changes in accounting policies associated with revision in accounting standards: Yes
2. Changes in accounting policies other than 1. above: None
3. Changes in accounting estimates: None
4. Retrospective restatements: None
Note: For changes in accounting policies associated with revision in accounting standards, please refer to “2.
Consolidated Financial Statements and Main Notes, (4) Notes to Consolidated Financial Statements(Changes in Accounting Policies)” on page 15.
(4) Number of shares outstanding (common stock)
1. Number of shares outstanding at the end of period (including treasury shares)
As of August 31, 2018:
100,300,000
As of February 28, 2018:
2. Number of treasury shares at the end of period
As of August 31, 2018:242,568

100,300,000

As of February 28, 2018:244,849

3. Average number of shares during the period (cumulative six months)
As of August 31, 2018:
100,056,667
As of August 31, 2017:

100,034,650

Note: This flash report is exempt from quarterly review.
Note: Descriptions on appropriate use of financial performance forecasts and other special notes
Forward-looking statements presented herein such as financial forecasts are based on currently available
information and certain presumptions deemed to be reasonable as of the date of announcement. The
achievement of said forecasts cannot be guaranteed. Actual results may be materially different from those in
the forecast as a result of various factors. For preconditions of these financial forecasts and notes concerning
their use, please refer to “1. Qualitative Information Regarding Quarterly Financial Results, (3) Explanation
Regarding Forward-looking Statements” on page 9.

Contents

1. Qualitative Information Regarding Quarterly Financial Results ·····························································

2(1) Explanation Regarding Consolidated Operating Results ······································································

2(2) Explanation Regarding Consolidated Financial Position ·····································································

8(3) Explanation Regarding Forward-looking Statements ···········································································

9

2. Consolidated Financial Statements and Main Notes ··················································································

10(1) Consolidated Balance Sheet ···············································································································

10(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ·················

12

Consolidated Statement of Income ······································································································

12

Consolidated Statement of Comprehensive Income ·············································································

13(3) Consolidated Statement of Cash Flows ·······························································································

14(4) Notes to Consolidated Financial Statements ························································································

15(Going Concern Assumption) ·············································································································

15(Notes to Significant Changes in the Amount of Shareholders’ Equity) ···············································

15(Changes in Accounting Policies)········································································································

15

1

1．Qualitative Information Regarding Quarterly Financial Results(1) Explanation Regarding Consolidated Operating Results
During the first half of fiscal 2018, six months from March 1 to August 31, 2018, we have advanced andaccelerated our “1000-Day Action Plan,” which is in its final fiscal year, and focused our business activities onbuilding Lawson’s next-generation convenience store model. Changes in community needs resulting from anaging population and the prevalence of the nuclear family, among others, are serving as a tailwind for theconvenience store industry. Meanwhile, competition is intensifying across sector lines, constantly spurring us
to take swift action. Given such a business environment, we have made efforts to evolve our business model asa manufacturing retailer targeting small catchment areas and to raise our store productivity to an unprecedented
level toward our ongoing goal of fulfilling our customers’ needs in everyday life by serving as an essential partof their communities. We intend to aim for further progress forward to achieve this goal.
As a result, for the first half of fiscal 2018 on a consolidated basis, gross operating revenue increased to351,973 million yen (up 6.9% from previous fiscal year), operating income decreased to 34,485 million yen(down 11.5% from previous fiscal year) and ordinary income decreased to 33,536 million yen (down 12.8% fromprevious fiscal year). Profit attributable to owners of parent decreased to 17,942 million yen (down 24.1% fromprevious fiscal year).
Furthermore, we also focused on addressing operating risks based on the 2018 Basic Policy for Improvementof Internal Control Systems. We will continue promoting internal control even more.
Operating results by business segment were as follows:(Domestic Convenience Store Business)
In our convenience store business, we offered everyday ready-made dishes including bento lunchboxes, riceballs, deep-fried items, salads and soups at LAWSON stores. In our effort to expand our merchandise assortment
offered in the evening and nighttime hours, we restructured our system across the entire supply chain from Juneby changing the order placement deadline and truck delivery times. In addition, with the aim of facilitating cash
register operations and achieving higher cash-handling efficiency at stores, we are accelerating the introductionof new point-of-sale (POS) cash registers (for sales information management) equipped with an automaticchange dispenser function at all our stores nationwide. Our plan is to complete the introduction by the end of the
fiscal year ending February 2019.
[Store Operations]
In store operations, we continued to focus on reinforcing adherence to the Three Essential Practices, whichemphasizes (1) serving customers courteously; (2) offering a merchandise assortment focused on basic itemswith high demand; and (3) keeping our stores and communities clean. Furthermore, we also actively promoted
our stores by strengthening our product lineup and improving operations and franchise support by headquarters.
As part of our efforts to enhance customer convenience and store operation productivity, we are executing apilot project on LAWSON Smartphone Payment, our mobile self-service payment service option based on a
dedicated app, at three LAWSON stores in Tokyo, which allows customers to purchase items at these LAWSON
stores simply by scanning them on their smartphone wherever they are within the store, eliminating the need2

to line up at the cash register. The project will be expanded in phases to 100 stores by the end of the fiscal year
ending February 2019, mostly in large cities.

[Merchandising and Service Strategies]
On the merchandise side, our onigiri rice ball lineup, which we revamped entirely in April 2018 by
employing new and improved ingredients and production methods, was well received by customers. Our“Korega” lunchbox series made with rigorously selected ingredients and production methods, as well as ourchilled lunchboxes that bring out the best from ingredients, also enjoyed ongoing popularity. Furthermore, we
also revamped our “Motto! Yasai” (meaning “More vegetables!”) series featuring delicious and healthy farewith abundant vegetables by adding Starchy Sauce Fried Noodles and Fried Rice Noodles containing half therecommended daily vegetable intake, which also sold well.
In the counter fast food range, we revamped our “Genkotsu Croquettes” and “Genkotsu Menchi” (deep-friedground beef), while also strengthening our assortment of ready-made dishes offered during the evening andnighttime hours by expanding our lineup of packed dishes composed mainly of items that can go straight to thedinner table such as our “Okazu Croquettes” and “Okazu Menchi” (deep-fried ground meat). In July 2018, incelebration of our long-selling “Kara-age-kun” chicken nuggets crossing the 3-billion-unit mark in cumulative
sales, we launched TV commercials and a sales promotional campaign during which an extra piece was added
to each serving. The item continued to record robust sales as a popular product.
In the dessert range, in June 2018 we launched “Soft Rice Cake Stuffed with Chocolate” as our first Japanesedessert from the “Uchi Café SWEETS X GODIVA” series produced in collaboration with Godiva, as well as“Chocolate Roll Cake” in celebration of the first anniversary of the series, which were both hugely popular,
especially among female customers. In addition, we started offering a series of seasonal dessert items, the firstof which was “Uchi Café X GODIVA Etoile du Chocolat” themed on tanabata, or star festival, in July. Thiswas followed by the launch in September of the second item in the series, “Uchi Café X GODIVA Otsukimi
Chocolate Soft Rice Cake (4 pieces)” themed on the autumn moon-viewing festival.
Driven by the higher average temperature this summer, sales of ice cream were robust, especially our private
brand “Uchi Café Fruit Bar” series.
On our sales promotion side, while strengthening our merchandise assortment offered during the evening
and nighttime hours, we also rolled out a special evening sales campaign, which offered a 20-yen discountwhen two applicable counter food items were purchased on weekday evenings. In addition, effective measures
to attract customers were launched, including a speed lottery capitalizing on our strength in the entertainment
field and “Summer Snoopy Fair Stamp Campaign,” offered exclusively to Ponta and d-point members.

3

[Breakdown of Sales by Merchandise Category at Chain Stores in Domestic Convenience Store Business]
Fiscal period

Product categories
Processed foods

Previous 1st Half
From March 1, 2017
to August 31, 2017
Net sales
Percentage of(Millions of yen)
total (%)
575,867
52.7

Current 1st Half
From March 1, 2018
to August 31, 2018
Net sales
Percentage of(Millions of yen)
total (%)
607,282
52.4

Fast foods

257,23723.5

276,057

23.8

Daily delivered foods

161,15114.8

171,950

14.9

Non-food products

98,0109.0

103,269

8.9

1,092,266

100.0

1,158,560

100.0

Total

(Note) These figures include stores operated by both Lawson, Inc. and Lawson Sanin, Inc.

[Store Development]
In opening new stores, the Group continued to focus on developing profitable stores.
Regarding the entire Lawson Group, the total number of LAWSON, NATURAL LAWSON, and LAWSONSTORE100 stores opened and closed during the first half of the current fiscal year stood at 525 and 177 stores,
respectively, with the total number of stores reaching 14,340 as of the end of August 2018. *1
With regard to our partnership initiatives with other chain retailers in Japan, as in the previous fiscal year,
we are remodeling THREE F stores operated by Three F Co., Ltd. into LAWSON THREE F stores, and SAVE
ON stores operated by Save On Corp. into LAWSON stores.
With regard to THREE F stores, 258 stores were remodeled into LAWSON THREE F stores from August
2017 to May 2018, completing the brand transition with the planned exclusion of some stores. Meanwhile, a
total of 73 SAVE ON stores were remodeled into LAWSON stores from March to August 2018, with the brandtransition scheduled to be completed by the end of 2018. In addition, LAWSON stores were opened in the
Chugoku/Shikoku region’s largest bus terminal, which is used by approximately 33,000 people a day, and in
the Fukuoka Prefectural Government building in July.
In an effort to establish convenience store models catered to an aging population and rising healthconsciousness, we are building partnerships with dispensing pharmacy and drug store chains to operate
healthcare-oriented LAWSON stores that offer a wider assortment of merchandise than conventional
LAWSON stores including over-the-counter pharmaceuticals, cosmetics and daily necessities. The number ofstores offering non-prescription drugs has reached 194 stores (includes 44 pharmacy LAWSON stores equippedwith drug-dispensing pharmacies) as of the end of August 2018. Moreover, the number of stores offering
nursing care consultation services has reached 17 as of the end of August 2018. Furthermore, we have also been
expanding our chain of “in-hospital LAWSON stores,” which feature strengthened focus on medical, sanitary,
nursing and rehabilitation supplies in addition to merchandise and services offered at standard convenience
stores. The number of such stores has reached 302 as of the end of August 2018. Building on our expertisedeveloped through operation of in-hospital LAWSON stores, we will continue supporting the well-being ofpeople and society.
With respect to LAWSON STORE100, we will continue to offer 100-yen items (excluding tax) by scaling
down product portions to respond to a diverse range of customer needs.
4*1 The numbers of store openings and closings and total number of stores in Japan include stores operatedby Lawson, Inc., subsidiary Lawson Sanin, Inc. and three equity-method affiliates, Lawson Kochi, Inc.,
Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.

[Change in the Total Number of Domestic Stores]
Total stores as ofFebruary 28, 2018

Change during
periodTotal stores as ofAugust 31, 2018

13,044361

13,405

NATURAL LAWSON

143

(2)

141

LAWSON STORE100

805

(11)

794

13,992348

14,340LAWSON

Total(Note) These figures include stores operated by Lawson, Inc., subsidiary Lawson Sanin, Inc. and equitymethod affiliates, Lawson Kochi, Inc., Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.

[Number of LAWSON stores by prefecture (As of August 31, 2018)]
Prefecture

Numberof stores

Hokkaido

665

Ibaraki

217

Kyoto

339

Ehime

220

Aomori

256

Tokyo

1,730

Shiga

157

Tokushima

136

Akita

191

Kanagawa

1,102

Nara

138

Kochi

141

Iwate

173

Shizuoka275

Wakayama

150

Fukuoka

512

Miyagi246

Yamanashi

131

Osaka

1,142

Saga

74

Yamagata

111

Nagano

176

Hyogo

681

Nagasaki

108

Fukushima

151

Aichi

705

Okayama

196

Oita

183

Niigata

231

Gifu

177

Hiroshima

227

Kumamoto

156

Tochigi

196

Mie

138

Yamaguchi

119

Miyazaki

106

Gunma

123

Ishikawa

104

Tottori

143

Kagoshima

197

Saitama691

Toyama192

Shimane147

Okinawa

227

Chiba

612

Fukui

113

Kagawa135

Total(domestic)

14,340Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores(Note) These figures include stores operated by Lawson, Inc., subsidiary Lawson Sanin, Inc. and equitymethod affiliates, Lawson Kochi, Inc., Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.
[Other]As Lawson’s “last-one-mile solution,” we started offering the LAWSON FRESH PICK service (colloquiallyshortened to “Loppick”) in March 2018. Loppick enables customers to reserve products on a dedicated smartphone
app by 8 a.m. and receive them after 6 p.m. on the same day at their designated LAWSON store. By leveraging
our existing store and logistics network, the service offers customers the freedom of not having to wait at homefor delivery and allows them to pick up their purchased items when they want in the evening. Approximately 600
kinds of items can be purchased ranging from perishable foods and seasonings to meal kits for easy cooking in
addition to products from Seijo Ishii and other specialty stores. Loppick has been well received, especially by5female customers, and has become available at around 700 stores as of the end of August 2018, including storesin the Tama and Jonan districts of Tokyo. By the end of the current fiscal year ending February 2019, the Loppick
service network is scheduled to be expanded to some 2,000 stores mainly in the Tokyo metropolitan area.

As a result, Domestic Convenience Store Business posted gross operating revenue of 239,008 million yen (up6.0% from previous fiscal year) and segment profit of 28,706 million yen (down 12.4% from previous fiscal year).

(Seijo Ishii Business)
The number of directly operated Seijo Ishii stores, a high-end supermarket chain offering quality foods, reached
142 as of the end of August 2018. Sales were solid and its well-selected products have remained popular amongcustomers. By continuing to leverage the company’s strengths including its product development expertise, knowhow acquired as a manufacturing retailer, and retailing techniques, we will endeavor to enhance the brand capacityof Seijo Ishii.

As a result, Seijo Ishii Business posted gross operating revenue of 42,008 million yen (up 7.9% from previous
fiscal year) and segment profit of 3,255 million yen (up 7.4% from previous fiscal year).

(Entertainment-related Business)
With regards to our Entertainment-related Business, Lawson Entertainment, Inc., which forms the core of thebusiness, continued to secure top-class ticket transaction value in the ticketing industry. HMV, which sells music
CDs and DVDs, also operates the HMV Record Shop specializing in analog records. As of the end of August
2018, the number of HMV stores totaled 56 including the HMV Record Shop. United Cinemas Co., Ltd. operates
cinema theaters at 41 sites, offering 357 screens nationwide including those operated on commission as of theend of August 2018.
As a result, Entertainment-related Business posted gross operating revenue of 39,344 million yen (down 0.1%
from previous fiscal year) and segment profit of 2,527 million yen (up 2.5% from previous fiscal year).
(Other Business)
In addition to the aforementioned businesses, the Group is also involved in the Overseas Business and the
Financial Services Business.
With regards to Overseas Business, the Group’s operating companies opened LAWSON stores in the People’s
Republic of China, Thailand, Indonesia, the Philippines, and the United States of America (Hawaii).
In the People’s Republic of China, after being the first Japanese convenience store operator to advance into
Shanghai, we made inroads into Chongqing, Dalian, Beijing, Wuhan, and Nanjing. In June 2018, the number ofstores exceeded 1,000 in Shanghai and its neighboring regions, while in July, five new stores were opened
simultaneously in Hefei, Anhui Province, contributing to the steady increase trajectory. The number of LAWSON
stores in the entire country reached 1,709 as of the end of August 2018.

6

[Distribution of LAWSON Brand Stores Overseas by Region]

Country/Region

Number of stores

Change during

Number of stores(As of February 28,

period(As of August 31,

2018)

2018)

China

Shanghai and surrounding area

865

179

1,044

China

Chongqing

165

17

182

China

Dalian

122

14

136

China

Beijing

73

13

86

China

Wuhan

198

57

255

China

Hefei

－

6

6

Thailand

101

8

109

Indonesia

37

－

37

Philippines

33

2

35

2

－

2

1,596

296

1,892

United States of America

Hawaii

Total

With respect to our Financial Services Business, the number of ATMs installed in LAWSON and other storesincreased. We strengthened partnerships with new financial institutions bringing the total number of our
financial institution partners to 93 nationwide (up 3 from previous fiscal year), including online banks, and thenumber of ATMs installed nationwide to 13,140 (up 407 from previous fiscal year) as of the end of August
2018. *2
As a result of an absorption-type company split effective June 1, 2018, Lawson Bank, Inc. absorbed
Lawson’s ATM business of Lawson ATM Networks, Inc. The banking license was received from the Financial
Services Agency on August 10, and the banking business was launched on September 10. Provision of banking
services to customers is scheduled to start on October 15. In view of the high potential demand for extensive
banking services, we are poised to offer financial services that will serve as essential financial infrastructure in
the communities we serve. *3*2 JA Bank and JF Marine Bank are classified as separate financial institutions.
*3. Lawson Bank Preparatory Company, Inc. changed its name to Lawson Bank, Inc., effective July 2, 2018

As a result, Other Business posted gross operating revenue of 35,896 million yen (up 20.8% from previous
fiscal year) and segment loss of 4 million yen (in contrast to posting segment profit of 642 million yen in thesame period of the previous fiscal year).

7(2) Explanation Regarding Consolidated Financial Position① Assets, liabilities and net assets at the end of the first half of fiscal year 2018
Current assets increased by 31,934 million yen from the end of the previous fiscal year to 263,795 million
yen, mainly reflecting an increase of 18,231 million yen in accounts receivable-other and an increase of
13,680 million yen in cash and deposits. Non-current assets increased by 28,569 million yen from the end of
the previous fiscal year to 696,965 million yen, mainly reflecting an increase of 14,135 million yen in property
and store equipment, an increase of 6,626 million yen in intangible assets and an increase of 7,807 million
yen in investments and other assets. Consequently, total assets increased by 60,504 million yen from the endof the previous fiscal year to 960,760 million yen.
Current liabilities increased by 50,896 million yen from the end of the previous fiscal year to 430,119
million yen, mainly reflecting an increase of 26,267 million yen in accounts payable-trade, an increase of
13,584 million yen in accounts payable-other and an increase of 5,358 million yen in short-term loans payable.
Non-current liabilities increased by 2,855 million yen from the end of the previous fiscal year to 242,442
million yen, mainly reflecting an increase of 6,763 million yen in lease obligations, a decrease of 5,469 million
yen in long-term loans payable and an increase of 1,139 million yen in asset retirement obligations.
Consequently, total liabilities increased by 53,752 million yen from the end of the previous fiscal year to672,561 million yen.
Net assets increased by 6,752 million yen from the end of the previous fiscal year to 288,198 million yen,mainly reflecting an increase of 5,185 million yen in retained earnings. Consequently, shareholders’ equity
ratio was 29.4%, down from 30.6% as of the end of the previous fiscal year.
② Cash flows during the first half of fiscal year 2018
Cash and cash equivalents at August 31, 2018 increased by 13,680 million yen from the end of the previous
fiscal year to 43,801 million yen.
Net cash provided by operating activities was 88,038 million yen, a decrease of 31,106 million yen fromthe corresponding period of the previous fiscal year, mainly because of a decrease in deposits received.
Net cash used in investing activities was (40,573) million yen, a decrease of (3,866) million yen from thecorresponding period of the previous fiscal year, mainly because of a decrease in payments for long-term
prepaid expenses.
Net cash used in financing activities was (33,055) million yen, a decrease of (33,952) million yen from thecorresponding period of the previous fiscal year, mainly because of an increase in short-term loans payable.

8(3) Explanation Regarding Forward-looking Statements
Regarding the financial forecast of the full fiscal year ending February 28, 2019, the forecast of consolidated
gross operating revenue and the forecast of non-consolidated gross operating revenue, ordinary income andprofit have been revised in view of the recent trends in operating results.The business forecasts and future
prospects presented herein are made based on currently available information and are subject to potential
risks and uncertainties. As such, actual business results may significantly differ from those expressed or
implied in the forecasts due to changes in various factors.

Forecast of consolidated operating results(full year)

Forecast of non-consolidated operating
results (full year)

Previous forecast

Previous forecast

Revised forecast

Revised forecast

Forecast
YoY
Forecast
YoY
Forecast
YoY
Forecast
YoY(in millions comparison (in millions comparison (in millions comparison (in millions comparisonof yen)(%)
of yen)(%)
of yen)(%)
of yen)(%)

Grossoperatingrevenue

732,000

111.4

722,000

109.8

401,000

107.5

395,000

105.9

Operatingincome60,00091.2

60,00091.2

44,50087.2

44,50087.2

Ordinary
income57,00087.5

57,00087.5

60,000118.8

50,00099.0

Profit(attributableto owners ofparent)28,000104.4

28,000104.4

38,000195.7

34,000175.1

9

2. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheet
As of February 28, 2018 and August 31, 2018
(Millions of yen)

AssetsCurrent assets:
Cash and deposits
Accounts receivable-due from franchised stores
Lease receivables
Merchandise
Accounts receivable-other
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets:
Property and store equipment:
Buildings and structures, net
Tools, furniture and fixtures, net
Leased assets, net
Other, net
Total property and store equipment
Intangible assets:
Software
Goodwill
Trademark right
Other
Total intangible assets
Investments and other assets:Long-term loans receivable
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

10Previous fiscal year
As of
February 28, 2018

Current 1st Half
As of
August 31, 201830,124
46,59916,426
18,913
82,6333,411
33,779(28)
231,860

43,80540,95019,682
20,623
100,864
3,910
34,045(87)263,795

197,979
16,355
123,940
11,660349,935

204,928
16,319131,067
11,755364,070

41,602
47,947
10,074573
100,197

47,42649,062
9,768
566
106,824

47,425
100,686
24,406
46,840(1,095)
218,262
668,395
900,256

48,454
101,599
25,081
51,811(876)
226,070
696,965
960,760

(Millions of yen)

Liabilities
Current liabilities:
Accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Accounts payable-other
Income taxes payable
Deposits received
Provision for bonuses
Other
Total current liabilities
Non-current liabilities:
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for retirement benefits to executive officers
and audit and supervisory board members
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity:
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

11

Previous fiscal year
As of
February 28, 2018

Current 1st Half
As of
August 31, 2018

118,174
36,340575
33,06360,7416,880
109,629
3,767
10,051
379,222

144,442
41,698－35,35674,326
7,561
111,286
3,894
11,553
430,119

55,469113,6172,616

50,000120,381
3,065

271

274

13,781
29,062
24,767
239,587
618,809

14,52930,202
23,988242,442
672,561

58,506
46,689166,124(1,040)270,280

58,506
46,688
171,310(1,031)
275,474

2,084
(575)
4,595
(726)
5,377
195
5,593
281,446
900,256

3,610
(575)
4,458
(793)
6,699
220
5,804
288,198
960,760

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income
For the first half of the fiscal year ended February 28, 2018 and the first half of the fiscal year ending February
28, 2019(Millions of yen)

Gross operating revenue
Net sales
Cost of sales
Gross profit
Operating revenue:
Income from franchised stores
Other operating revenue
Total operating revenue
Operating gross profit
Selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses:
Interest expenses
Loss on cancellation of leases
Other
Total non-operating expenses
Ordinary income
Extraordinary income:Gain on sales of shares of subsidiaries and associates
extraordinary
incomeGain Totalon salesof shares of subsidiaries
and associates
Extraordinary losses:
Loss on retirement of non-current assets
Impairment loss
Other
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

12

Previous 1st Half
From March 1, 2017
to August 31, 2017
329,402
131,033
90,07740,956

Current 1st Half
From March 1, 2018
to August 31, 2018351,973
145,471
99,66145,810147,248
51,120198,369
239,325
200,380
38,945

154,375
52,126
206,502
252,312217,827
34,485

352

369

431

467

1,103
1,887

1,225
2,063

959
660
755
2,376
38,456

1,178
943
889
3,011
33,536

302
302

－
－

1,293
668
149
2,111
36,648
10,581
2,157
12,73923,908263
23,644

1,816
1,190
325
3,332
30,204
12,150125
12,275
17,928(13)
17,942

Consolidated Statement of Comprehensive Income
For the first half of the fiscal year ended February 28, 2018 and the first half of the fiscal year ending February
28, 2019(Millions of yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests

13

Previous 1st Half
From March 1, 2017
to August 31, 2017
23,908Current 1st Half
From March 1, 2018
to August 31, 2018
17,928

888
(373)
76
592
24,500

1,526
(163)
(67)
1,295
19,22324,224276

19,264(40)

(3) Consolidated Statement of Cash Flows
For the first half of the fiscal year ended February 28, 2018 and the first half of the fiscal year ending February
28, 2019(Millions of yen)Previous 1st Half
From March 1, 2017
to August 31, 2017
Net cash provided by (used in) operating activities:
Profit before income taxes
Depreciation and amortization
Impairment loss
Interest income
Interest expenses
Loss on retirement of non-current assets
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in accounts receivable-other
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accounts payable-other
Increase (decrease) in deposits received
Increase (decrease) in net defined benefit liability
Other
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities:
Purchase of property and store equipment
Purchase of intangible assets
Purchase of shares of subsidiaries and associates
Payments of long-term loans receivableCollection of long-term loans receivable
Purchase of long-term prepaid expenses
Payments for transfer of business
Other
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities:
Net increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Repayments of lease obligations
Cash dividends paid
Payments from changes in ownership interests in subsidiaries that do
not result in change in scope of consolidation
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting fromchange of scope of consolidation
Cash and cash equivalents at end of period

14

Current 1st Half
From March 1, 2018
to August 31, 2018

36,64827,911
668
(352)
959
1,293
1,818
(11,974)
25,692
5,471
33,434369
5,840
127,780355(960)(8,031)
119,144

30,20431,875
1,190
(369)
1,178
1,816
3,577
(18,279)
26,58013,386
1,659
456
4,989
98,265370(1.206)(9,391)
88,038(17,801)(8,635)(209)(3,650)2,567(7,362)(6,692)(2,654)(44,439)(19,928)(10,386)(3,044)(3,665)2,539(2,138)(2,730)(1,219)(40,573)(30,047)(285)(16,365)(12,501)

5,358(6,044)(19,532)(12,757)(7,799)－(8)(67,007)(67)
7,629
67,692(79)(33,055)(739)
13,67030,120765

1076,08643,801

(4) Notes to Consolidated Financial Statements(Going Concern Assumption)
Not Applicable.

(Notes to Significant Changes in the Amount of Shareholders’ Equity)
Not Applicable.

(Changes in Accounting Policies)
The Company’s foreign consolidated subsidiaries are applying International Financial Reporting Standard
15 (IFRS 15) “Revenue from Contracts with Customers” from the first quarter of the fiscal year ending
February 28, 2019.
The impact of the application of IFRS 15 on the Company’s consolidated financial statements is immaterial.

15