March 2, 2005

Outline of revisions toearnings outlook foryear to August 31, 2005
Genichi Tamatsuka
Fast Retailing Co., Ltd.
President & COO【MC comment】
It is now time to begin this meeting to explain the reasons behind the revisions toFAST RETAILING CO., LTD’s earnings outlook for the year through August 2005.
Thank you all very much for giving up your time to join us.
First of all, let me introduce the company representatives here with us today andtell you how we would like to proceed with the meeting.
We are joined by Genichi Tamatsuka, President & COO of FAST RETAILING
and Naoki Otoma, a director of the company.

【Genichi Tamatsuka, President, FAST RETAILING】
Good afternoon everyone, I am Genichi Tamatsuka and I’d like to givethis presentation sitting down. I will first explain our reasons for revising
down our earnings outlook for the year to August 2005.

1

2【Parent】 Interim forecast revisions
Net sales：¥199.8bln （▲¥5.2bln v. initial est.）
Operating Income：¥34.5bln (▲¥6.8bln v. initial est.）
Billions of yen

YrYrtotoAug
Aug04
04
InterimInterimActualActualNet SalesNet Salessales）（to net（to net sales）
Gross Profit
Gross Profitsales）（to net（to net sales）
SG&A Expenses
SG&A Expensessales）（to net（to net sales）
Operating Income
Operating Incomesales）（to net（to net sales）
Ordinary Income
Ordinary Incomesales）（to net（to net sales）
Net Income
Net Incomesales）（to net（to net sales）

180.7
180.7
100.0%
100.0%

85.8
85.8
47.5%
47.5%

46.1
46.1
25.5%
25.5%

39.6
39.6
22.0%
22.0%

39.6
39.6
22.0%
22.0%

21.3
21.3
11.8%
11.8%

InterimInterim
Initial
Initialest.
est.
205.0
205.0
100.0%
100.0%

95.0
95.0
46.3%
46.3%

53.7
53.7
26.2%
26.2%

41.3
41.3
20.1%
20.1%

41.5
41.5
20.2%
20.2%

23.0
23.0
11.2%
11.2%

Year
Yearto
toAug
Aug05
05
InterimInterim
Revised
Revisedestimate
estimate

199.8
199.8

（y/y）
（y/y）

（v. initial est.）（v. initial est.）(+10.5%) (▲2.5%)(+10.5%) (▲2.5%)

100.0%
100.0%

87.9
87.9(+2.4%)(▲7.5%)(+2.4%)(▲7.5%)
44.0% (▲3.5p)
44.0% (▲3.5p)(+15.7%) (▲0.6%)
53.4(+15.7%) (▲0.6%)
53.4
26.7% (+1.2p)
26.7% (+1.2p)(▲13.0%) (▲16.5%)
34.5(▲13.0%) (▲16.5%)
34.5
17.3% (▲4.7p)
17.3% (▲4.7p)(▲11.8%) (▲15.7%)
35.0(▲11.8%) (▲15.7%)
35.0
17.5% (▲4.4p)
17.5% (▲4.4p)(▲6.1%) (▲13.0%)
20.0(▲6.1%) (▲13.0%)
20.0
10.0% (▲1.8p)
10.0% (▲1.8p)
FAST RETAILING
CO.,LTD.

First let me take you through the revisions to our interim outlook for the six
months to February 2005.
We have already announced our sales figures for the month of February today.
With this latest performance data now available, it became clear to us that weneeded to revise down our business outlook for both the interim and full year
periods and we wanted to make any announcement as soon as possible.
Interim net sales for the six months to February 2005 are now expected to fallshort of initial estimates by ¥5.2bln generating a total of ¥199.8bln. We now
expect an interim gross profit margin of 44.0%, down 2.3 points compared toour initial estimates. SG&A costs are seen almost the same at ¥53.4bln,operating income is now expected to come in below initial estimates at around¥34.5bln, a fall of 13.0% compared to the previous year.

2

【Parent】 Reasons for interim
forecast revisions(1) Net sales

3¥199.8bln （▲¥5.2bln v. initial estimate)

Mainly due to unusual weather patterns with a hot September and mild December
Unable to recoup lost sales even when actual strong demand for winter goods kicked infrom January(2) Gross profit margin 44.0％ （▲2.3points v. initial estimate）
Year end production orders dispatched mid October but December sales
competition exacerbated by mild winter.
Poor December sales resulted in heavy discounting from January and large
fall in gross profit margin.

FAST RETAILINGCO.,LTD.

Let me explain the reasons why we are expecting to fall short of our profit
forecasts in the first half.
First on net sales – now expected to total ¥199.8bln. Unusual weather
patterns exerted a large influence with the prolonged heat through lastSeptember and the mild winter in December weighing on fall/winter garment
sales. We thought that we might have been able to recoup that shortfall insales from January onwards but that has not proved possible hence theexpected shortfall in first half sales of ¥5.2bln compared to our initial estimate.
Moving onto the reasons for the expected shrinkage in first half gross profit
margin. We determined our year-end production orders for winter/fall goods
back in October when sales were favorable. However, owing to the mild winterand some other factors, December sales proved poor and we had to discountheavily from January onwards to shift stock. As a result, our gross profit
margin has fallen considerably since January. Basically, while January sales
picked up somewhat on December’s performance, that was not enough torecover our previous profit expectations.
SG&A costs are expected to remain pretty close to our initial forecast – upsomewhat on the previous year’s levels due to this term’s aggressive,
expansionary management plans.

34【Parent】 2nd half forecast revisions
Net sales：¥172.0bln （▲¥3.0bln v. initial est.)
Operating income：¥28.0bln（▲¥2.3bln v. initial est.）
Billions of yen
six
sixmonths
monthstotoAug
Aug04
04
2H
2HActual
Actual（ y/y）
（ y/y）

NetNetSales
Sales155.1
155.1

sixsixmonths
monthstotoAug
Aug2005
2005(2H)(2H)
Initial
RevisedInitialest.
est.（ y/y）RevisedEstimate
Estimate（ y/y）
（ y/y）（ y/y）

175.0＋12.8%）
175.0（ （＋12.8%）＋4.3%
Existing stores
＋2.7%
＋4.3%
Existing stores＋2.7%
stores 【19 stores】 32 stores 【23 stores】
New stores【Net increase】 38New stores【Net increase】 38 stores 【19 stores】 32 stores 【23 stores】

Gross
GrossProfit
Profit83.0＋9.3%）
83.0（ （＋9.3%）

＋4.2%
＋4.2%
3030storesstores【19stores】【19stores】（ ▲1.8%）81.5＋7.3%） （ ▲1.8%）
81.5（ （＋7.3%）（tonetsales）
sales）（tonet

48.9%
48.9%

47.4%
47.4%（ （▲1.5p）▲1.5p）

47.4%
47.4%（ （▲1.6p）▲1.6p）（tonetsales）
sales）（tonet

32.7%
32.7%

30.1%
30.1%（ （▲2.6p）▲2.6p）

31.0%
31.0%（ （▲1.7p）▲1.7p）（tonetsales）
sales）（tonet

16.2%
16.2%

17.3%
17.3%（ （＋1.1p）＋1.1p）

16.3%
16.3%（ （＋0.1p）＋0.1p）（tonetsales）
sales）（tonet

16.4%
16.4%

17.4%
17.4%（ （＋1.1p）＋1.1p）

16.3%
16.3%（ （▲0.1p）▲0.1p）（tonetsales）
sales）（tonet

9.1%
9.1%

9.7%
9.7%（ （＋0.6p）＋0.6p）

9.3%
9.3%（ （＋0.2p）＋0.2p）

SG&A
SG&AExpenses
Expenses

OperatingOperatingIncome
IncomeOrdinary
OrdinaryIncome
IncomeNet
NetIncome
Income

75.9
75.9

50.7
50.7

25.2
25.2

25.3
25.3

14.1
14.1

52.7
＋3.9%）
52.7（ （＋3.9%）
30.3＋20.2%）
30.3（ （＋20.2%）

30.5＋20.2%）
30.5（ （＋20.2%）

17.0＋20.5%）
17.0（ （＋20.5%）（v.initial est.）（v.initial est.）（ ▲1.7%）172.0＋10.9%） （ ▲1.7%）
172.0（ （＋10.9%）（ ＋1.3%）53.4＋5.3%） （ ＋1.3%）
53.4（ （＋5.3%）（ ▲7.6%）28.0＋11.1%） （ ▲7.6%）
28.0（ （＋11.1%）（ ▲8.2%）28.0＋10.3%） （ ▲8.2%）
28.0（ （＋10.3%）（ ▲5.9%）16.0＋13.5%） （ ▲5.9%）
16.0（ （＋13.5%）

FAST RETAILING
CO.,LTD.

Next, let me explain the revisions to our second half earnings outlook forthe six months to August 2005.
Net sales in the second half are now expected to total ¥172.0bln
compared to our initial estimate of ¥175.0bln. Our gross profit estimate
remains the same at 47.4%. We have revised our estimate for SG&A
costs up from the initial ¥52.7bln to ¥53.4bln. As a result, our outlook for
operating income has been revised down from ¥30.3bln to ¥28.0bln.
We are maintaining our gross margin estimate of 47.4% and will endeavor
to strengthen control over gross costs focusing on profitability and a
cautious approach to any further production increases during the current
term.
The reason for the increase of ¥0.7bln in our SG&A estimate for thesecond half is due in the main to increased personnel hiring at our head
office.

45【Parent-Group】

Full year forecast revisions

Revisions to group outlook reflects change inbusiness forecast for the parent company
Billions of yen
ParentParentYear
YeartotoAug
Aug05
05

Yr to Aug 04
Yr to Aug 04

ActualActualSSNet
NetSales
Sales

Gross
GrossProfit
Profit（to（tonetnetsales）sales）
xxSG&A
SG&AExpenses
Expenses（to（tonetnetsales）sales）
gOperating
gOperatingIncome
Income（to（tonetnetsales）sales）
yy Ordinary
OrdinaryIncome
Income（to（tonetnetsales）sales）
nn NetIncomeNet Income（to（tonetnetsales）
sales）

Initialy）
Initialest.
est.（ y/（ y/ y）

335.8
335.8
161.7
161.7

48.1%
48.1%

96.8
96.8

28.8%
28.8%

64.8
64.8

19.3%
19.3%

65.0
65.0

19.4%
19.4%

35.4
35.4

10.5%
10.5%

GroupGroup

380.0
380.0
178.0
178.0

（+13.1%）（+13.1%）（+10.0%）（+10.0%）46.8%（▲1.3p）
46.8% （▲1.3p）
106.4（+9.8%）
106.4 （+9.8%）
28.0%（▲0.8p）
28.0% （▲0.8p）
71.6
71.6 （+10.4%）（+10.4%）18.8%（▲0.5p）
18.8% （▲0.5p）
72.0（+10.7%）72.0 （+10.7%）
18.9%（▲0.4p）
18.9% （▲0.4p）
40.0
40.0 （+13.0%）（+13.0%）10.5%（▲0.0p）
10.5% （▲0.0p）

371.8
371.8
169.4
169.4

Year
YeartotoAug
Aug05
05

Yr to Aug 04
Yr to Aug 04

Revised est. （ y/ y）
Revised est. （ y/ y）（+10.7%）（+10.7%）（+4.7%）（+4.7%）
45.6%（▲2.6p）
45.6% （▲2.6p）
106.8（+10.2%）106.8 （+10.2%）
28.7%（▲0.1p）
28.7% （▲0.1p）
62.5
62.5 （▲3.7%）（▲3.7%）
16.8%（▲2.5p）
16.8% （▲2.5p）
63.0（▲3.1%）
63.0 （▲3.1%）
16.9%（▲2.4p）
16.9% （▲2.4p）
36.0
36.0 （+1.7%）（+1.7%）
9.7%（▲0.9p）
9.7% （▲0.9p）

ActualActualInitialy）
Initialest.
est.（ y/（ y/ y）

339.9
339.9
163.1
163.1

48.0%
48.0%

99.2
99.2

29.2%
29.2%

63.9
63.9

18.8%
18.8%

64.1
64.1

18.9%
18.9%

31.3
31.3

9.2%
9.2%

384.8
384.8
180.3
180.3

Revised est. （ y/ y）
Revised est. （ y/ y）（+13.2%）（+13.2%）（+10.5%）（+10.5%）46.9%（▲1.1p）
46.9% （▲1.1p）
108.7（+9.5%）
108.7 （+9.5%）
28.2%（▲0.9p）
28.2% （▲0.9p）
71.6
71.6 （+12.0%）（+12.0%）18.6%（▲0.2p）
18.6% （▲0.2p）
72.8（+13.4%）72.8 （+13.4%）
18.9%（＋0.0p）
18.9% （＋0.0p）
40.8
40.8 （+30.1%）（+30.1%）
10.6%（＋1.4p）
10.6% （＋1.4p）

376.6
376.6
171.7
171.7

（+10.8%）（+10.8%）

109.1
109.1

（+9.9%）（+9.9%）

62.5
62.5（▲2.2%）（▲2.2%）

63.8
63.8（▲0.6%）（▲0.6%）

36.8
36.8（+17.4%）（+17.4%）（+5.2%）（+5.2%）

45.6%（▲2.4p）
45.6% （▲2.4p）
29.0%（▲0.2p）
29.0% （▲0.2p）
16.6%（▲2.2p）
16.6% （▲2.2p）
16.9%（▲1.9p）
16.9% （▲1.9p）
9.8%（＋0.5p）
9.8% （＋0.5p）

FAST RETAILINGCO.,LTD.

Finally, we have also revised our full year earnings outlook for the FASTRETAILING group as a whole to reflect the revisions to the parent estimates.
Consolidated net sales for the full year are now expected to total ¥376.6bln
and ordinary income to total ¥63.8bln. That would represent an increase insales but a fall in profits when compared with the previous year’s performance.
That completes my explanation of the revisions to FAST RETAILING’s
earnings outlook for the year to August 31, 2005.

5