Flash Report on the Consolidated Financial Results
for the Third Quarter of the Fiscal Year Ending February 28, 2023
January 10, 2023
Listed Company Name: Lawson, Inc.
Tokyo Stock Exchange
Code No.: 2651
(URL https://www.lawson.jp/en/ir)
Company Representative: Sadanobu Takemasu, President and CEO, Representative Director,
Chairman of the Board
Contact: Tomoki Takanishi, Senior Vice President, Financial Administration Division Director
Tel.: +81-3-5435-2773
Scheduled date for submission of quarterly securities report: January 13, 2023
Scheduled date for payment of dividend: －Supplementary materials for quarterly financial results: Yes
Holding of presentation of quarterly results: None
(Amounts less than one million yen are truncated)
1. Consolidated operating results for the third quarter ended November 30, 2022 (from March 1, 2022 toNovember 30, 2022)(1) Consolidated operating results (cumulative)
Note: Percentages represent increases (decreases) compared with the corresponding period of the previous fiscal
year.

For the third quarter ended
November 30, 2022
November 30, 2021
Note: Comprehensive income:Gross operating
revenue
Millions%of yen
737,385 41.1
522,489
5.0

Operating income

Ordinary income

Millionsof yen45,15438,651Millionsof yen44,57039,440

%
16.8
19.5

For the third quarter ended November 30, 2022
For the third quarter ended November 30, 2021
Profit per share

%
13.0
30.3

Profit attributable toowners of parent
Millions%of yen26,123
7.2
24,378104.8

29,535 million yen
26,094 million yen

13.2 %
68.6 %

Diluted profit per share

For the third quarter ended
Yen
Yen
November 30, 2022
261.03260.80November 30, 2021
243.61243.39Note: “Accounting Standard for Revenue Recognition” (ASBJ Statement No.29, March 31, 2020) and otherstandards are applied from the beginning of the first quarter of the fiscal year ending February 28, 2023.
(2) Consolidated financial position

Millions of yen

Millions of yen

Shareholders’ equity
ratio%

November 30, 2022

1,363,571

289,136

20.8

February 28, 2022

1,337,245

278,473

20.4

As of

Total assets

Net assets

Reference: Shareholders’ equity:
As of November 30, 2022
As of February 28, 2022

283,286 million yen
272,891 million yen

2. Dividends
1Q
Yen
2021 fiscal year

－

1H
Yen
75.00

2022 fiscal year

－

75.00

Annual dividends per share
3Q
Year-end
Yen
Yen
－
75.00

2022 fiscal year (forecast)
Note: Revision of the most recent dividends forecast: None

Total
Yen
150.00－75.00

150.003. Forecast of consolidated operating results for the 2022 fiscal year ending February 28, 2023 (from March 1,2022 to February 28, 2023)
Note: Percentages represent increases (decreases) compared with the corresponding period of the previous fiscal
year.
Gross operating
Profit attributable Profit per
Operating income Ordinary income
revenueto owners of parent share
Millions ofMillions
Millions
Millions
%
%
%
%
Yen
yen
of yenof yenof yen2022 fiscal year
1,024,000 46.6
53,000 12.5
48,5002.0
22,00022.9
219.83
Note: Revision of the most recent consolidated operating results forecast: None
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
(4) Number of shares outstanding (common stock)
1. Number of shares outstanding at the end of period (including treasury shares)
As of November 30, 2022:
100,300,000
As of February 28, 2022:
2. Number of treasury shares at the end of period
As of November 30, 2022:
223,012

As of February 28, 2022:

3. Average number of shares during the period (cumulative nine months)
As of November 30, 2022:
100,075,705
As of November 30, 2021:

100,300,000

228,807

100,070,354

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) Notes to Consolidated Financial Statements························································································

14(Going Concern Assumption) ·············································································································

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

14(Changes in Accounting Policies) ·················································································

14(Additional Information) ····················································································································

15

1

1．Qualitative Information Regarding Quarterly Financial Results(1) Explanation Regarding Consolidated Operating Results
During the third quarter of fiscal 2022, nine months from March 1 to November 30, 2022, we continued totake rigorous prevention measures against the infection of the novel coronavirus and responded to new normal
demand by exerting concerted Group-wide efforts. Specifically, under the leadership of our Lawson Group
Sweeping Transformation Executive Committee, which was launched in September 2020 to realize “Challenge2025” formulated for 2025, the 50th anniversary of our foundation, we renovated our stores and revamped our
product lineups in Domestic Convenience Store Business in response to changes in the business environment,
and the whole Lawson Group endeavored to resolve medium- to long-term issues for sustainable growth,acquire new revenue opportunities and foster job satisfaction. Upholding a strategic concept of focusing on
community, individual customers, and individual stores in fiscal 2022, we are introducing an area company
system to build a stronger structure for rigorously pursuing the creation of value for customers at locations
closer to them.
As a result, for the third quarter of fiscal 2022 on a consolidated basis, gross operating revenue increased to
737,385 million yen (141.1% year on year), operating income increased to 45,154 million yen (116.8% year
on year) and ordinary income increased to 44,570 million yen (113.0% year on year). Profit attributable toowners of parent was 26,123 million yen (107.2% year on year).
The Company has adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020) and other standards from the beginning of the first quarter of the fiscal year ending February
28, 2023. Therefore, year-on-year comparative figures for the third quarter of the fiscal year ended February
28, 2022 represent amounts based on the previously adopted accounting policies. For information on thechanges in relation to the application of the new accounting standards, please refer to “2. Consolidated
Financial Statements and Main Notes (3) Notes to Consolidated Financial Statements (Changes in Accounting
Policies).”
We also focused on improving our group-wide internal control system and addressing operating risks basedon the 2022 Basic Policy for Improvement of Internal Control Systems. We will continue promoting internal
control going forward.
Operating results by business segment were as follows.

(Domestic Convenience Store Business)
During the third quarter under review, the number of new COVID-19 cases, which had previously peakedin August 2022, started to increase again in October 2022. Nevertheless, an overall rising trend was seen in the
movement of people.
Amid such drastic shifts in the business landscape, Lawson has been proceeding with store renovations inline with the business environment surrounding each store, helping them expand their merchandise assortmentof frozen foods and other daily necessities to adapt to changes in customers’ lifestyles and better address
customer needs. By the end of November 2022, we had completed the renovation of some 1,865 stores, andthe total number of stores renovated since fiscal 2021 reached 6,170. Installation of the Machikado Chubo in-2store kitchen service at stores also progressed, with 8,970 stores equipped with the service as of the end of
November 2022. In addition, we implemented a full-scale introduction of MUJI products at LAWSON stores in
May 2022, with a total of 6,569 stores including those in the previous fiscal year offering the merchandise as ofthe end of November 2022.
In store operations, as we work our way toward 2025, our 50th anniversary year, we launched the HAPPYLAWSON PROJECT in June 2022 with the aim of creating “new hubs of refreshment in every community,” andpromoted measures to fulfill the three promises of our business policy—“Superior taste,” “Human kindness,” and“Environmental (Machi) friendliness”—in an effort to operate LAWSON stores endorsed by all our customers.
In addition to further strengthening our distinctive products that focus on taste and health, we are also working
to provide heartfelt customer service in our stores. As part of our efforts to achieve a decarbonized society, we
opened an energy-saving model store in Kawasaki City, Kanagawa Prefecture. With approximately 80% of its
refrigerated/frozen display cases equipped with doors and solar panels installed on its roof, the store achieves
reductions of 40% and 55% in electricity consumption and CO2 emissions, respectively, from its fiscal 2013 levels.
We will be launching similar stores in other regions to verify the effectiveness of this initiative, after which wewill seek to make this a standard for new and renovated stores from fiscal 2024. Furthermore, in Toshima Ward,
Tokyo, we opened a Green Lawson store, which has incorporated over 20 sustainability measures including
endeavoring to decrease its environmental impact by reducing food loss and plastic usage, serving customers with
on-screen avatars to realize less restrictive work options for employees, and leveraging digital transformation tofacilitate smooth communication with customers as well as to reduce manpower tasks of stores.

[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 items withhigh demand; and (3) keeping our stores and communities clean. In our efforts to respond to customer needs andincrease sales, we also focused on expanding our merchandise assortment to respond to changes in customer
lifestyles and values. Furthermore, we kept up our initiatives to increase the profitability of franchise stores,
including helping them streamline their store operation and control costs associated with food waste and utility
expenses.

[Merchandising and Service Strategies]
Sales continued to surge in frozen foods and fast-food counter items, whose assortments we have beenendeavoring to expand with the aim of supporting the daily lives of customers with store renovations. In the frozen
food range, sales were strong for ingredients and deli items that fulfill customers’ pantry needs as well as forgroundbreaking items such as frozen desserts. In the fast-food counter range, new flavors of “Kara-age-kun”
chicken nuggets and “Protein Chicken” for protein lovers enjoyed robust sales. We strengthened our merchandise
assortment of regular products and rolled out sales promotional measures, which resulted in the strong
performance of onigiri rice balls and the “Korega BENTO” box lunch series in the rice range and deli items in thedaily food range. In addition, new dessert products such as “Rich Canelé” and “Rich Fresh Cheesecake” also
contributed to sales. With regard to products offered by the Machikado Chubo in-store kitchen service, we saw
strong performance for regular items such as the “Thick-Sliced Sangenton Pork Cutlet Sandwich” and “Mixedseafood Tempura Rice Bowl” as well as deli items launched in October. In daily necessities, MUJI cosmetics,

3

which we are currently in the process of introducing, recorded strong sales.
In food delivery service, the combined number of stores listed on 4 food delivery services such as Uber Eats,reached 3,556 in 45 prefectures as of November 30, 2022. In addition, Uber Eats delivers over-the-counter(OTC) drugs sold at 86 LAWSON stores in 16 prefectures.

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

Product group
Processed foods

Previous fiscal year
From March 1, 2021
To November 30, 2021
Sales
Percentage(Millions of yen) of total (%)
903,417
53.9

Current fiscal year
From March 1, 2022
to November 30, 2022
Sales
Percentage(Millions of yen)of total (%)
929,928
53.7

Fast foods

363,81821.7

388,438

22.4

Daily delivered foods

261,43815.6

265,839

15.3

Nonfood products

148,235

8.8

149,389

8.6

1,676,910

100.0

1,733,595

100.0

Total

[Store Development]
In opening new stores, the Group continued to focus on developing profitable stores.
During the third quarter under review, the total number of LAWSON, NATURAL LAWSON and LAWSONSTORE100 stores opened in Japan stood at 176 stores. Meanwhile, we closed a total of 204. As of the end of
November 2022, the total number of domestic stores was 14,628 *1.
In an effort to establish convenience store models catered to an aging population and a trend toward selftreatment, we are building partnerships with dispensing pharmacy and drug store chains to operate healthcareoriented LAWSON stores that offer over-the-counter pharmaceuticals and prescription drugs, as well as a wider
assortment of cosmetics and daily necessities than conventional LAWSON stores. The number of stores
offering non-prescription drugs has reached 297 stores (includes 50 pharmacy LAWSON stores equipped withdrug-dispensing pharmacies) as of the end of November 2022. Moreover, the number of stores with nursing
care consultation desks for seniors has reached 21 as of the end of November 2022. Furthermore, we have also
been expanding our chain of “in-hospital LAWSON stores,” which feature strengthened focus on medical,
sanitary and nursing supplies in addition to merchandise and services offered at standard convenience stores.
The number of such stores has reached 342 as of the end of November 2022. Building on our expertisedeveloped through operation of in-hospital LAWSON stores, we will continue to support the lives of all peopleinteracting with hospitals.
Our NATURAL LAWSON stores, which are popular among customers for supporting their beauty, health,and comfortable lifestyles, offer an exclusive selection of finely picked items of value, including food madewith healthy ingredients and environmentally friendly detergents and cosmetics. Meanwhile, our LAWSONSTORE100 stores offer high quality, safe and reliable fruits and vegetables with a focus on freshness and daily
necessities, supporting customers’ daily dietary lives by helping them plan their meals. The stores are visitedby customers of all ages including children and the elderly, and particularly single people and homemakers. Asof the end of November 2022, we operate 131 NATURAL LAWSON stores and 664 LAWSON STORE100
stores.

4

*1 The numbers of store openings and closings and total number of stores in Japan include stores operated by
Lawson, 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, 2022
LAWSON

Change during
periodTotal stores as ofNovember 30, 2022

13,851(18)

13,833

NATURAL LAWSON

136

(5)

131

LAWSON STORE100

669

(5)

664

14,656(28)

14,628

Total[Number of LAWSON stores by prefecture (As of November 30, 2022)]
Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores

Hokkaido

680

Ibaraki

215

Kyoto

328

Ehime

217

Aomori

277

Tokyo

1,674

Shiga

153

Tokushima

137

Akita

179

Kanagawa

1,064

Nara

133

Kochi

137

Iwate

180

Shizuoka

274

Wakayama

152

Fukuoka525

Miyagi

256

Yamanashi

136

Osaka

1,183

Saga

75

Yamagata

109

Nagano

169

Hyogo

699

Nagasaki

123

Fukushima

169

Aichi

718

Okayama

240

Oita

201

Niigata

226

Gifu

178

Hiroshima

300

Kumamoto

161

Tochigi

198

Mie

136

Yamaguchi

127

Miyazaki

109

Gunma

244

Ishikawa

103

Tottori138

Kagoshima

200

Saitama696

Toyama177

Shimane

141

257

Chiba

597

Fukui

105

Kagawa132

Okinawa
Total(domestic)

14,628(Note) These figures include stores operated by Lawson, Inc. and equity-method affiliates, Lawson Kochi, Inc.,
Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.

As a result, Domestic Convenience Store Business posted gross operating revenue of 518,849 million yen(161.0% year on year) and segment profit of 32,438 million yen (127.0% year on year).

(Seijo Ishii Business)
Seijo Ishii Co., Ltd provides customers with well-selected, and highly original foods under its philosophy of“Quality food for a quality life.” Operating diverse store formats including street-side stores and stores in stationbuildings and commercial facilities, the supermarket chain leverages its distinguished product development
expertise to offer original products and food items made in-house under the Seijo Ishii brand. The number of
directly operated Seijo Ishii Co., Ltd stores reached 174 as of the end of November 2022. Sales were slow for
perishable food and grocery items including fruit and vegetables, meat and fish, and confectionery, especially at5street-side stores. This was attributable to the high relative basis of comparison resulting from the spike indemand same period of last year from customers staying at home during the COVID-19 pandemic. However,dishes produced in-house at our central kitchen recorded steady sales, driven by promotional projects including
the “Hokuhoku Autumn Delicacies Fair” and reinforced publicity activities. Furthermore, in July 2022 westarted operating a new central kitchen, doubling our production capacity. By harnessing the expanded capacity,
we are stepping up our efforts to develop new items in-house and to increase the proportion of items produced
in-house. We will continue striving to elevate the brand power of Seijo Ishii Co., Ltd by promoting thesustainable development of products of value, effective promotional campaigns, and publicity activities as amanufacturing retailer eager to send messages out to consumers. In addition, on December 16, 2022, due to acomprehensive consideration of trends in the stock market and other factors, Seijo Ishii Co., Ltd withdrew its
listing application filed with the Tokyo Stock Exchange on September 9, 2022.

As a result, Seijo Ishii Business posted gross operating revenue of 80,673 million yen (100.0% year on year)
and segment profit of 7,771 million yen (99.6% year on year).

(Entertainment-related Business)
With respect to our ticketing business in our Entertainment-related Business undertaken by Lawson
Entertainment, Inc., we enjoyed strong demand for concerts, sporting events, and dining coupons under the Go
To Eat campaign. Under such circumstances, we focused our efforts on securing an expanded lineup of eventsin each genre with the aim of capturing the increased demand, which, as in the first half of the fiscal year,
resulted in our ticket transaction value exceeding the pre-pandemic level recorded in the same period of fiscal
2019. Furthermore, sales for our product sales business also increased year on year at HMV music/video
software stores and others. Meanwhile, demand from stay-at-home customers slowed in our e-commercebusiness, which resulted in decreased sales, but we are working to expand the scope of merchandise we handle
to include entertainment and cosmetics goods. The number of stores has reached 55 as of November 30, 2022,
including HMV stores, HMV&BOOKS, which markets books, CDs and DVDs, and HMV record shop storesspecializing in analog records.
As in the first half of the fiscal year, United Cinemas Co., Ltd., an operator of cinema complexes, again
attracted more moviegoers than in the same period of the previous fiscal year. Sales increased as a result of
measures taken to attract customers, such as distributing discount coupons to members, and strengthening
digital advertising and the rental theater service. As of November 30, 2022, 44 cinema complexes nationwide
with 399 screens are operating.

As a result, Entertainment-related Business posted gross operating revenue of 53,718 million yen (114.6%
year on year) and segment profit of 3,386 million yen (270.9% year on year).
(Financial Services Business)
With respect to our Financial Services Business, we endeavored to offer an expanded range of new services
through Lawson Bank, Inc.’s ATMs and ATM settlement network. As of the end of November 2022, thenumber of ATMs installed nationwide reached 13,522, with each ATM used 52.2 times a day on average. The
total number of our financial institution partners reached 384 nationwide. We now have seven partners for the6

“smartphone ATM (QR code deposit/withdrawal)”*2 service, 23 for the “Immediate Account Settlement
Service”*3 (18 financial institutions and five other service operators), and seven for international money transfer
cards. In addition to conventional demand for cash withdrawal services, charging to cashless payment services
has contributed to the increased use of ATMs.
Regarding LAWSON Ponta Plus credit cards issued by Lawson Bank, Inc, we are steadily expanding credit
card membership by rolling out a range of promotional campaigns and strengthening promotional efforts at stores.

*2 A service where customers can deposit/withdraw cash or take out/repay a credit card loan at an ATM byusing a smartphone app instead of a bank card. “smartphone ATM” is a registered trademark of Seven Bank,
Ltd.
*3 A service that allows customers to top up their mobile payment app from their account with a financial
institution by harnessing the ATM network.

As a result, Financial Services Business posted gross operating revenue of 26,014 million yen (102.7% year
on year) and segment profit of 3,008 million yen (129.2% year on year).
(Overseas 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).
The number of LAWSON stores in the People’s Republic of China, reached 5,540 as of the end of November
2022, up 980 stores from the end of previous fiscal year. In addition to opening new stores through our subsidiaries,
we are also launching stores by concluding mega franchise agreements with local retailers in different cities, aswell as area license agreements—where partner companies serve as headquarters in designated areas and assume
overall operation and development—in efforts to accelerate the expansion of business areas and the number ofstores. In July 2022, the number of stores exceeded 5,000, a milestone first for a Japanese convenience store chain.
Due to the spread of COVID-19, large-scale movement restrictions were imposed across China in and after April
2022, and about half of the stores in the eastern part of the country suspended their operations due to the lockdown
across Shanghai. Almost all stores were reopened after the lockdown was lifted in June, but lockdowns continued
to be implemented intermittently in other regions, forcing some stores to suspend operations. The businessenvironment thus remains challenging due to both government-imposed and self-imposed restrictions on
movement. We will work to offer our signature high-quality original products including rice and dessert items,
enhance the value of the Lawson brand in China, and increase earnings by strengthening our delivery business.
In other regions, stores that had been suspending their operations or operating with shorter hours have resumed
normal operations in phases and are gradually recovering from the impact of COVID-19. We will continue tooperate our stores to sustain the daily lives of our customers and strive to further expand our earnings. Furthermore,from the third quarter of the year, Lawson Philippines, Inc. has been included in the scope of consolidation.

7

[Distribution of LAWSON Brand Stores Overseas by Region]
Number of stores(As of February 28,
2022)

Country/Region
China
China
China
China
China

Shanghai and surrounding area
(Shanghai, Zhejiang, Jiangsu)
Chongqing and surrounding area
(Chongqing, Sichuan）
Liaoning(including Shenyang, Dalian)Beijing and surrounding area
(Beijing, Tianjin, Hebei)
Guangdong and Fujian(including Shenzhen, Xiamen)

Changeduring fiscal
year

Number of stores(As of November 30,
2022)

2,349

172

2,521

489

292

781

461

109

570

343

70

413

－

140

140

China

Hubei (including Wuhan)

526

73

599

China

Anhui (including Hefei)

175

63

238

China

Hunan (including Changsha)

117

35

152

China

Hainan (including Haikou)

100

26

126

China

Subtotal

4,560

980

5,540

Thailand

166

15

181

Indonesia

65

80

145

Philippines

69

23

92

2

―

2

4,862

1,098

5,960

United States of America

HawaiiTotal

As a result, Overseas Business posted gross operating revenue of 66,454 million yen (118.9% year on year)
and segment loss of 1,468 million yen (segment profit was 1,853 million yen in previous fiscal year).

(2) Explanation Regarding Consolidated Financial Position
Current assets increased by 28,736 million yen from the end of the previous fiscal year to 696,363 million
yen, mainly reflecting an increase of 35,150 million yen in accounts receivable-trade, an increase of 5,890
million yen in accounts receivable-due from franchised stores and a decrease of 12,243 million yen in cash anddeposits. Non-current assets decreased by 2,410 million yen from the end of the previous fiscal year to 667,207
million yen, mainly reflecting a decrease of 11,931 million yen in investments and other assets, a decrease of
1,577 million yen in intangible assets and an increase of 11,098 million yen in property and store equipment.
Consequently, total assets increased by 26,326 million yen from the end of the previous fiscal year to 1,363,571
million yen.
Current liabilities increased by 92,984 million yen from the end of the previous fiscal year to 797,675 million
yen, mainly reflecting an increase of 60,857 million yen in accounts payable-trade, an increase of 60,000
million yen in current portion of long-term loans payable and a decrease of 26,134 million yen in accounts
payable-other. Non-current liabilities decreased by 77,320 million yen from the end of the previous fiscal year
to 276,759 million yen, mainly reflecting a decrease of 80,000 million yen in long-term loans payable.

8Consequently, total liabilities increased by 15,663 million yen from the end of the previous fiscal year to 1,074,435
million yen.
Net assets increased by 10,662 million yen from the end of the previous fiscal year to 289,136 million yen,mainly reflecting an increase of 7,290 million yen in retained earnings and an increase of 3,395 million yen inforeign currency translation adjustment. Consequently, shareholders’ equity ratio was 20.8%, up from 20.4% asof the end of the previous fiscal year.

(3) Explanation Regarding Forward-looking Statements
Regarding the financial forecasts for the full fiscal year ending February 28, 2023, the financial forecasts
remain unchanged from those announced on April 11, 2022.

92. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheet
As of February 28, 2022 and November 30, 2022
(Millions of yen)Previous fiscal year
As of
February 28, 2022
AssetsCurrent assets:
Cash and deposits
Accounts receivable-trade
Accounts receivable-due from franchised stores
Lease receivables
Merchandise
Accounts receivable-other
Other
Allowance for doubtful accounts
Total current assets
Non-current assets:
Property and store equipment:
Buildings and structures, net
Tools, furniture and fixtures, net
Land
Leased assets-net
Construction in progress
Other-net
Total property and store equipment
Intangible assets:
Software
Goodwill
Trademark right
Other
Total intangible assets
Investments and other assets:
Investment securities
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

10

Current 3rd Quarter
As ofNovember 30, 2022

388,463
4,990
47,202
15,071
22,128146,443
43,344(17)
667,627

376,219
40,14153,093
13,96827,544
142,71142,703(17）696,363

189,190
22,762
8,507
124,978
4,720
18,609368,768

195,01325,316
8,429
127,267
2,245
21,594
379,867

34,88434,4597,721
680
77,74635,47732,634
7,329
727
76,16821,73838,044103,277
34,736
26,066(759)
223,103669,618
1,337,245

17,10335,749102,271
31,53025,317(800)
211,172
667,207
1,363,571

(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
Call money
Deposits received for banking business
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, 2022

Current 3rd Quarter
As ofNovember 30, 2022

125,681
47,07220,00045,95590,412
7,368
151,809
4,854
108,000
91,42012,117
704,691

186,538
27,85380,00046,73564,2776,240
157,166
3,274
107,000
101,420
17,170797,675

160,000
118,445449

80,000119,061
423

248

278

17,43836,622
20,875354,080
1,058,771

18,01137,78021,203276,759
1,074,435

58,50646,495
161,299(973)
265,327

58,50646,495
168,590(949)
272,642

1,585
(69)
6,273
(227)
7,563
368
5,213
278,473
1,337,245

1,192
(69)
9,669
(148)
10,643
328
5,522
289,136
1,363,571

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)For the third quarter of the fiscal year ended February 28, 2022 and the third quarter of the fiscal year ending
February 28, 2023
(Millions of yen)Previous 3rd Quarter
From March 1, 2021
to November 30, 2021
522,489
216,946
148,398
68,548Gross 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
Dividend income
Gain on investments in investment partnerships
Employment adjustment subsidy due to novel
coronavirus disease
Other
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 investment securities
Total extraordinary income
Extraordinary losses:
Loss on retirement of non-current assets
Impairment loss
Loss on novel coronavirus disease
Other
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

12

Current 3rd Quarter
From March 1, 2022
to November 30, 2022
737,385
449,260
355,00994,250222,62182,921
305,543
374,091
335,440
38,651

189,541
98,584
288,125
382,376
337,222
45,154

713
368

706
677

1,634

－

1,040

536

1,323
5,080

1,712
3,632

2,607
1,075
608
4,291
39,440

2,654
947
613
4,215
44,570

1,025
1,025

－
－

961
2,105
639
510
4,217
36,248
7,775
3,978
11,75424,493
115
24,378

866
1,227
1,091
331
3,516
41,053
11,104
3,692
14,796
26,257
133
26,123

(Consolidated Statement of Comprehensive Income)For the third quarter of the fiscal year ended February 28, 2022 and the third quarter of the fiscal year ending
February 28, 2023
(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 3rd Quarter
From March 1, 2021
to November 30, 2021
24,493Current 3rd Quarter
From March 1, 2022
to November 30, 2022
26,257

(237)
1,760
77
1,600
26,094

(393)
3,593
78
3,278
29,53525,901
193

29,203332

(3) 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)(Application of Accounting Standards for Revenue Recognition, etc.)
Effective from March 1, 2022, the Company applies the “Accounting Standard for Revenue Recognition”(ASBJ Statement No.29, March 31, 2020, “Accounting Standard for Revenue Recognition”) and otherstandards and recognizes revenue at an amount that it expects to receive in exchange for promised goods orservices when control of the goods or services is transferred to a customer.
The changes in relation to the application of the accounting standards for revenue recognition are statedbelow:(1)

Sales transactions involving a subsidiary

Sales transactions involving SCI, Inc., a subsidiary of the Company in the domestic convenience store
business, that were previously recognized on a net basis are now recorded on a gross basis in consideration of
the subsidiary’s role in sales to customers (whether it is principal or agent).
(2)

Consideration paid to customers

Sales promotion costs and other costs were previously recognized as selling, general and administrative
expenses, such as sales commission and advertising expenses, but such consideration paid to customers is
now deducted directly from revenue.
(3)

IT systems fees received from customers

Fees received from customers for IT system utilization and data provision were previously deducted fromselling, general and administrative expenses, but transactions based on contracts with customers are now
recognized as revenue.
(4)

Points program operated by a subsidiary

With respect to the in-house points program operated by United Cinemas Co., Ltd., a subsidiary of theCompany in the Entertainment-related Business, points awarded were previously recognized as revenue on agross basis at the time the services were sold. However, the points awarded at the time of sales are now
recognized as a separate performance obligation to be executed when customers choose to purchaseadditional services in the future. As a result, transaction values allocated to points are recognized as contract
liabilities at the time the points are awarded, and later recognized as revenue when services are sold in
exchange for the points. Transaction values are allocated in proportion to the independent selling prices. The
membership fees for the points program were previously recognized as revenue in a lump sum at the time ofreceipt, but they are now recorded based on the elapsed period.
The Accounting Standards for Revenue Recognition have been applied in accordance with Proviso of
Paragraph 84 of the Accounting Standards for Revenue Recognition with the cumulative effect ofretrospective application added to or deducted from the beginning balance of retained earnings of the firstquarter of the current fiscal year, thus, the new accounting policy has been adopted from the first quarter ofthis fiscal year.
As a result, compared with the amounts based on the previously adopted accounting policies, accounts
receivable-trade increased by 32,405 million yen, accounts receivable-other decreased by the same amount,accounts payable-trade increased by 35,418 million yen and accounts payable-other decreased by the sameamount, net sales and operating revenue increased by 176,035 million yen, cost of sales increased by 198,882

14

million yen, and selling, general and administrative expenses decreased by 22,979 million yen for the third
quarter under review, while operating income, ordinary income, and profit before income taxes increased by
132 million yen, respectively. The balance of retained earnings at the beginning of the fiscal year decreasedby 723 million yen.
In accordance with the transitional treatment set forth in Paragraph 89-2 of the Accounting Standard for
Revenue Recognition, the Company has not restated the financial results for the previous fiscal year to reflect
the new method of presentation. Furthermore, in accordance with the transitional treatment set forth inParagraph 28-15 of the Accounting Standard for Quarterly Financial Reporting (ASBJ Statement No. 12,
March 31, 2020), a breakdown of revenue from contracts with customers for the third quarter of the previous
fiscal year has been omitted.
(Application of Accounting Standard for Fair Value Measurement, etc.)
The “Accounting Standard for Fair Value Measurement” (ASBJ Statement No.30, July 4, 2019; hereafter“Fair Value Accounting Standards” ) has been applied prospectively from the beginning of the first quarter ofthe current fiscal year as prescribed by the Fair Value Accounting Standards in accordance with thetransitional treatment set forth in Paragraph 19 of Fair Value Accounting Standards and Section 44-2 of“Accounting Standard for Financial Instruments” (ASBJ Statement No.10, July 4, 2019). This change had noeffect on the quarterly consolidated financial statements.

(Additional Information)(Application of tax effect accounting for transition from consolidated taxation system to group tax sharing
system)The Company and certain domestic consolidated subsidiaries have calculated the amounts of deferred tax
assets and deferred tax liabilities in accordance with tax laws in effect before amendment based on thetreatment of Paragraph 3 of “Practical Solution on the Treatment of Tax Effect Accounting for the Transition
from the Consolidated Taxation System to the Group Tax Sharing System” (ASBJ Practical Issues Task
Force No.39, March 31, 2020) instead of applying the provision in Paragraph 44 of “Implementation
Guidance on Tax Effect Accounting” (ASBJ Guidance No.28, February 16, 2018), regarding the transition togroup tax sharing system established in “Act for Partial Amendment of the Income Tax Act, etc.” (Act No.8
of 2020), and items for which the non-consolidated taxation system has been reviewed in line with thetransition to the group tax sharing system.

15