Flash Report on the Consolidated Financial Results
for the First Quarter of the Fiscal Year Ending February 28, 2023
July 11, 2022
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: July 13, 2022
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 first quarter ended May 31, 2022 (from March 1, 2022 to May 31, 2022)(1) Consolidated operating results (cumulative)
Note: Percentages represent increases (decreases) compared with the corresponding period of the previous fiscal
year.

For the first quarter ended

Gross operating
revenue
Millions%of yen237,75640.5
169,264
8.9

May 31, 2022
May 31, 2021
Note: Comprehensive income:Operating income

Ordinary income

Millionsof yen13,27910,617

Millionsof yen13,59910,397

%
25.1
304.6

For the first quarter ended May 31, 2022
For the first quarter ended May 31, 2021
Profit per share

%
30.8
760.1

Profit attributable toowners of parent
Millions%of yen
8,029
42.4
5,637
－

9,730 million yen
8,615 million yen

12.9%
－%

Diluted profit per share

For the first quarter ended
Yen
Yen
May 31, 2022
80.24
80.17
May 31, 2021
56.33
56.29
Note: “Accounting Standard for Revereue Recognition” (ASBJ Statement No.29, March 31, 2020) and otherstandards are applied from the beginning of the first quarter of the consolidated fiscal year ending
February 28, 2023.
(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Millions of yen

Shareholders’ equity
ratio%

May 31, 2022

1,476,891

279,952

18.6

February 28, 2022

1,337,245

278,473

20.4

As of

Reference: Shareholders’ equity:
As of May 31, 2022
As of February 28, 2022

274,300 million yen
272,891 million yen

2. Dividends
1Q
Yen
2021 fiscal year－

2022 fiscal year－

2022 fiscal year (forecast)

Annual dividends per share
1H
3Q
Year-end
Yen
Yen
Yen
75.00
－
75.00

Total
Yen
150.0075.00

150.00Note: Revision of the most recent dividends forecast: None

－

75.00

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
Operating income Ordinary income
revenue
Millions
Millions
Millions%%%of yenof yenof yen1H of 2022 fiscal year
510,000 46.2
27,5003.0
26,000 (6.6)
2022 fiscal year
1,024,000 46.6
53,000 12.5
48,5002.0
Note: Revision of the most recent consolidated operating results forecast: None

Profit attributable Profit per
to owners of parent share
Millions%Yenof yen13,500 (22.4)
134.8922,000 22.9
219.83

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 May 31, 2022
100,300,000
As of February 28, 2022:
2. Number of treasury shares at the end of period
As of May 31, 2022:
225,507

As of February 28, 2022:

3. Average number of shares during the period (cumulative three months)
As of May 31, 2022:
100,073,202
As of May 31, 2021:

100,300,000

228,807

100,068,636

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 first quarter of fiscal 2022, from March 1 to May 31, 2022, we continued to take rigorous
prevention measures against the infection of the novel coronavirus and responded to new normal demand byexerting concerted Group-wide efforts. Specifically, under the leadership of our Lawson Group Sweeping
Transformation Executive Committee, which was launched in September 2020 to realize “Challenge 2025”
formulated for 2025, the 50th anniversary of our establishment, 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 first quarter of fiscal 2022 on a consolidated basis, gross operating revenue increased to237,756 million yen (up 40.5% from previous fiscal year), operating income increased to 13,279 million yen(up 25.1% from previous fiscal year) and ordinary income increased to 13,599 million yen (up 30.8% fromprevious fiscal year). Profit attributable to owners of parent was 8,029 million yen (up 42.4% from previous
fiscal 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 first 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 first quarter under review, the number of new COVID-19 cases decreased, the state of quasiemergency was lifted in March 2022, and a recovery 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. We completed the renovation of 4,858 stores as of the end of May 2022, and are planning to
additionally refurbish about 3,500 stores by the end of fiscal 2022. Installation of the Machikado Chubo instore kitchen service at stores also progressed, with 8,546 stores equipped with the service as of the end of May

2

2022.
In store operations, we are striving to establish LAWSON stores as convenience stores endorsed by all ourcustomers. To this end, we are implementing measures to achieve our three commitments, namely, to pursue
compelling taste, to be considerate to people, and to be environmentally friendly. 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, and to strictly address environmental concerns such as reducing food loss, plastic
usage, and CO2 emissions, etc. We adopted an AI-based system that prompts stores to make timely discounts byproviding reminders as part of our efforts to reduce food loss, and decreased the use of plastic labels on our
original plastic bottle beverages by around 50% in our effort to use less plastic.

[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 consumer
lifestyles and values. Furthermore, we kept up our initiatives to increase the profitability of franchise stores,
including helping them streamline their store operation and reduce 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 groundbreaking items such as frozen desserts and products that capture customer
needs for stocking up on ingredients and ready-made dishes. In the rice range, our “Korega BENTO” box lunch
series continued to record steady sales, and the modified regular lineup of onigiri rice balls also performed well.
Our original products including the “Nama custard cream puff” released in March 2022 and our “Kara-age-kun”
chicken nuggets, which marked their 36th anniversary, were well received, contributing to sales. The Machikado
Chubo in-store kitchen service enjoyed strong sales as a result of revamping and enhancing the quality of popular
items such as the “Thick-Sliced Sangenton Pork Cutlet Sandwich” and “Mixed-seafood Tempura Rice Bowl.”
The “Local Bowl” series that responds to region-specific needs was also very popular.
In food delivery service, the combined number of stores listed on 5 food delivery services such as Uber Eats,reached 3,263 in 45 prefectures as of May 31, 2022. In addition, Uber Eats delivers over-the-counter (OTC) drugs
sold at 73 LAWSON stores in 14 prefectures.

3

[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 May 31, 2021
Sales
Percentage(Millions of yen) of total (%)
296,214
54.3

Current fiscal year
From March 1, 2022
to May 31, 2022
Sales
Percentage(Millions of yen)of total (%)
304,010
54.3

Fast foods

116,453

21.3

123,225

22.0

Daily delivered foods

85,66715.7

86,336

15.4

Nonfood products

47,602

8.7

46,337

8.3

Total

545,938100.0

559,910100.0[Store Development]
In opening new stores, the Group continued to focus on developing profitable stores.
During the first quarter under review, the total number of LAWSON, NATURAL LAWSON and LAWSONSTORE100 stores opened in Japan stood at 59 stores. Meanwhile, we closed a total of 55. As of the end of May
2022, the total number of domestic stores was 14,660 *.
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 282 stores (includes 50 pharmacy LAWSON stores equipped withdrug-dispensing pharmacies) as of the end of May 2022. Moreover, the number of stores with nursing careconsultation desks for seniors has reached 21 as of the end of May 2022. Furthermore, we have also been
expanding our chain of “in-hospital LAWSON stores,” which feature strengthened focus on medical, sanitaryand nursing supplies in addition to merchandise and services offered at standard convenience stores. The
number of such stores has reached 337 as of the end of May 2022. Building on our expertise developed throughoperation of in-hospital LAWSON stores, we will continue to support the lives of all people interacting withhospitals.
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 May 2022, we operate 134 NATURAL LAWSON stores and 668 LAWSON STORE100 stores.

* The numbers of store openings and closings and total number of stores in Japan include stores operatedby Lawson, Inc. and three equity-method affiliates, Lawson Kochi, Inc., Lawson Minamikyushu, Inc. and
Lawson Okinawa, Inc.

4

[Change in the Total Number of Domestic Stores]
Total stores as ofFebruary 28, 2022
LAWSON

Change during
periodTotal stores as of
May 31, 2022

13,851

7

13,858

NATURAL LAWSON

136

(2)

134

LAWSON STORE100

669

(1)

668

14,656

4

14,660

Total[Number of LAWSON stores by prefecture (As of May 31, 2022)]
Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores

Hokkaido

676

Ibaraki

216

Kyoto

330

Ehime

215

Aomori

278

Tokyo

1,682

Shiga

154

Tokushima

135

Akita

181

Kanagawa

1,072

Nara

136

Kochi

138

Iwate

178

Shizuoka

276

Wakayama

153

Fukuoka527

Miyagi

255

Yamanashi

136

Osaka

1,177

Saga

74

Yamagata

110

Nagano

173

Hyogo

701

Nagasaki

124

Fukushima

170

Aichi

717

Okayama

238

Oita

197

Niigata

226

Gifu

180

Hiroshima

303

Kumamoto

162

Tochigi

198

Mie

137

Yamaguchi

128

Miyazaki

109

Gunma

243

Ishikawa

103

Tottori137

Kagoshima

203

Saitama694

Toyama181

Shimane141

Okinawa
259
Total
Chiba
599
Fukui
106
Kagawa132
14,660(domestic)(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 166,293 million yen (up58.4% from previous fiscal year) and segment profit of 8,158 million yen (up 23.2% from previous fiscal year).

(Seijo Ishii Business)
Seijo Ishii 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 station buildings
and commercial facilities, the supermarket chain leverages its distinguished product development expertise tooffer original products and food items made in-house under the Seijo Ishii brand. The number of directly operated
Seijo Ishii stores reached 171 as of the end of May 2022. Sales were slow for perishable food and grocery items
including fruit and vegetables, meat and fish, and confectionery, especially at street-side stores. This was
attributable to the high relative basis of comparison resulting from the spike in demand same period last year from
customers staying at home during the COVID-19 pandemic. However, dishes and dessert products produced inhouse at our central kitchen continued to record strong sales, driven by seasonal promotional projects and5reinforced publicity activities. We will continue striving to elevate the brand power of Seijo Ishii by promoting
the sustainable development of products of value, effective promotional campaigns, and publicity activities asa manufacturing retailer eager to send messages out to consumers.

As a result, Seijo Ishii Business posted gross operating revenue of 27,849 million yen (up 1.6% fromprevious fiscal year) and segment profit of 3,066 million yen (up 4.2% from previous fiscal year).

(Entertainment-related Business)
With respect to our ticketing business in our Entertainment-related Business undertaken by Lawson
Entertainment, Inc., numerous concerts and live events were staged and sporting events were increasingly held
without capacity limits following the lifting of the state of quasi-emergency on March, 2022. In addition, no
restrictions were imposed during the long holiday in May for the first time in three years, which saw visitors
return to leisure facilities. Under such circumstances, we focused our efforts on securing an expanded lineupof events in each genre with the aim of capturing the increased demand driven by the restored movement ofpeople, which resulted in a rise in our ticket transaction value. Furthermore, sales for our product sales businessalso increased year on year at HMV music/video software stores and others. Meanwhile, demand from stay-athome customers slowed in our e-commerce business. The number of stores has reached 55 as of May 31, 2022,
including HMV stores, HMV&BOOKS, which markets books, CDs and DVDs, and HMV record shop storesspecializing in analog records.
United Cinemas Co., Ltd., an operator of cinema complexes, has been operating all its theaters according totheir normal business hours since the state of quasi-emergency was lifted, which resulted in a year-on-yearincrease in the number of moviegoers. Moreover, we are also striving to increase sales by screening more selfdistributed movies and movies based on 4DX, a state-of-the-art technology that offers a multi-sensory
cinematic experience, as well as strengthening theater commercial (theater media) sales. As of May 31, 2022,
42 cinema complexes nationwide with 388 screens are operating.

As a result, Entertainment-related Business posted gross operating revenue of 16,919 million yen (up 9.2%
from previous fiscal year) and segment profit of 1,116 million yen (up 230.6% from previous fiscal year ).
(Financial Services Business)
With respect to our Financial Services Business, in addition to strengthening our foundational ATM businessand promoting our conventional cash deposit/withdrawal service, we worked to expand the use of ATM-based
services, including international money transfer cards issued by money transfer companies, the “ATM charge
service,” where cash can be charged at an ATM to mobile cashless payment apps, and a safety box service,where sales proceeds can be deposited via ATMs. Furthermore, we focused on expanding the number of partner
financial institutions and other service operators for our “Immediate Account Settlement Service,” whichallows customers to top up their mobile payment app from their account with a financial institution through theATMs and ATM settlement network of Lawson Bank, Inc.
As of the end of May 2022, the number of ATMs installed nationwide reached 13,542, with each ATM used6

51.5 times a day on average. The total number of our financial institution partners reached 378 nationwide. The“Immediate Account Settlement Service” is offered in partnership with five service providers including those
operating “au PAY,” “WebMoney Prepaid Card,” and “mobile Suica.” In the first quarter under review, 4 financial
institutions joined as new partners, raising the total number of financial institution partners to 13.
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.

As a result, Financial Services Business posted gross operating revenue of 8,680 million yen (up 4.1% fromprevious fiscal year) and segment profit of 990 million yen (up 100.8% from previous fiscal 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 4,843 as of the end of May 2022,
up 283 stores from the end of previous fiscal year. In addition to opening new stores through our subsidiaries, weare also launching stores by concluding mega franchise agreements with local retailers in different cities, as well
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. Due to the impact of COVID-19, regional movement restrictions were strengthened across China in andafter April 2022, including the introduction of lockdowns. However, the impact was limited during the January–
March period, the accounting period in China, resulting in a year-on-year increase in gross operating revenue due
partly to an increase in the number of stores. 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.
In other regions, apart from some stores that have suspended their operations in response to the spread of
COVID-19, all other stores are carrying out normal operations, with rigorous infection prevention measures inplace, in order to sustain the daily lives of our customers.

7

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

Country/Region
China

Shanghai and surrounding area
(Shanghai, Zhejiang, Jiangsu)
China Chongqing and surrounding area
(Chongqing, Sichuan）
China Liaoning(including Shenyang, Dalian)
China Beijing and surrounding area
(Beijing, Tianjin, Hebei)

Changeduring fiscal
year

Number of stores(As of May 31,
2022)

2,349

26

2,375

489

139

628

461

26

487

343

13

356

China

Guangdong (including Shenzhen)

－

20

20

China

Hubei (including Wuhan)

526

26

552

China

Anhui (including Hefei)

175

19

194

China

Hunan (including Changsha)

117

4

121

China

Hainan (including Haikou)

100

10

110

China

Subtotal

4,560

283

4,843

Thailand

166

5

171

Indonesia

65

―

65

Philippines

69

8

77

2

―

2

4,862

296

5,158

United States of America

HawaiiTotal

As a result, Overseas Business posted gross operating revenue of 20,775 million yen (up 30.5% fromprevious fiscal year) and segment loss of 6 million yen (segment profit was 337 million yen in previous fiscal
year).

(2) Explanation Regarding Consolidated Financial Position
Current assets increased by 134,296 million yen from the end of the previous fiscal year to 801,923 million
yen, mainly reflecting an increase of 111,090 million yen in cash and deposits, an increase of 31,711 million
yen in accounts receivable-trade and a decrease of 8,988 million yen in accounts receivable-other. Non-current
assets increased by 5,349 million yen from the end of the previous fiscal year to 674,967 million yen, mainlyreflecting an increase of 9,699 million yen in property and store equipment, a decrease of 3,296 million yen in
investments and other assets and a decrease of 1,053 million yen in intangible assets. Consequently, total assets
increased by 139,645 million yen from the end of the previous fiscal year to 1,476,891 million yen.
Current liabilities increased by 131,803 million yen from the end of the previous fiscal year to 836,494
million yen, mainly reflecting an increase of 70,911 million yen in deposits received and an increase of 64,779
million yen in deposits received for banking business. Non-current liabilities increased by 6,364 million yen
from the end of the previous fiscal year to 360,444 million yen, mainly reflecting an increase of 5,956 million
yen in lease obligations. Consequently, total liabilities increased by 138,167 million yen from the end of theprevious fiscal year to 1,196,939 million yen.
Net assets increased by 1,478 million yen from the end of the previous fiscal year to 279,952 million yen,8mainly reflecting an increase of 1,607 million yen in foreign currency translation adjustment and a decrease of
198 million yen in retained earnings. Consequently, shareholders’ equity ratio was 18.6%, down from 20.4% asof the end of the previous fiscal year.
(3) Explanation Regarding Forward-looking Statements
Regarding the financial forecasts for the first half and full year of the current 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 May 31, 2022
(Millions of yen)

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

10Previous fiscal year
As of
February 28, 2022

Current 1st Quarter
As of
May 31, 2022

388,463
4,990
47,202
15,071
22,128146,443
43,344(17)
690,811667,627

499,553
36,701
47,993
14,73223,931
137,455
41,570(15)
801,923

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

188,724
23,5598,507
130,234
6,402
21,040378,468

34,88434,4597,721
680
77,746

34,83533,5497,570
736
76,692

21,73838,044103,277
34,736
26,066(759)
223,103669,618
1,337,245

21,81337,348102,696
32,677
26,072(802)
219,806
674,967
1,476,891

(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 1st Quarter
As of
May 31, 2022

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

172,848
4,360
20,00047,16357,211
1,709
222,7213,349
135,000
156,200
15,930836,494

160,000
118,445449

160,000
124,402
441

248

259

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

17,59936,73021,011
360,444
1,196,939

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

58,50646,495
161,100(959)
265,142

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

1,546
(69)
7,881
(200)
9,157
355
5,296
279,952
1,476,891

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)For the first quarter of the fiscal year ended February 28, 2022 and the first quarter of the fiscal year ending
February 28, 2023
(Millions of yen)Previous 1st Quarter
From March 1, 2021
to May 31, 2021
169,264
71,164
48,67022,494Gross 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
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 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

Current 1st Quarter
From March 1, 2022
to May 31, 2022
237,756
144,615
114,306
30,30972,04526,05398,099120,593
109,976
10,617

61,97531,164
93,140123,450
110,171
13,279

215
195

215
441

237

401

481
1,130

487
1,546

847
367
135
1,350
10,397

875
182
167
1,225
13,599

233
754
650
1,637
8,760
1,427
1,729
3,157
5,603
(34)
5,637

260
491
89
841
12,758
2,306
2,424
4,731
8,026
(2)
8,029

(Consolidated Statement of Comprehensive Income)For the first quarter of the fiscal year ended February 28, 2022 and the first 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 1st Quarter
From March 1, 2021
to May 31, 2021
5,603

Current 1st Quarter
From March 1, 2022
to May 31, 2022
8,026

1,774
1,251
(12)
3,012
8,615

(39)
1,716
26
1,703
9,730

8,560
55

9,624
106

(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 30,208, accounts receivable-other decreased by the same amount, accounts
payable-trade increased by 32,756 million yen and accounts payable-other decreased by the same amount, net
sales and operating revenue increased by 58,124 million yen, cost of sales increased by 63,870 million yen,

14

and selling, general and administrative expenses decreased by 5,792 million yen for the first quarter underreview , while operating income, ordinary income, and profit before income taxes increased by 47 million,
respectively yen. The balance of retained earnings at the beginning of the fiscal year decreased by 723 millionyen.
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 first three months of theprevious 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.
(Accounting estimate related to the impact of COVID-19)
There have been no significant changes to the assumptions regarding the impact of COVID-19 as stated in
Significant accounting estimates in the Annual Securities Report for the previous fiscal year.

15