Flash Report on the Consolidated Financial Results
for the First Half of the Fiscal Year Ending February 28, 2022
October 7, 2021
Listed Company Name: Lawson, Inc.
Tokyo Stock Exchange (First Section)
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: October 13, 2021
Scheduled date for payment of dividend: November 10, 2021
Supplementary materials for quarterly financial results: Yes
Holding of presentation of quarterly results: Yes(Amounts less than one million yen are truncated)
1. Consolidated operating results for the first half ended August 31, 2021 (from March 1, 2021 to August 31,
2021)(1) Consolidated operating results (cumulative)
Note: Percentages represent increases (decreases) compared with the corresponding period of the previous fiscal
year.
Gross operating
revenue
Millions%of yen348,768
8.0
322,890 (12.5)

For the first half ended

August 31, 2021
August 31, 2020
Note: Comprehensive income:Operating income

Ordinary income

Millionsof yen26,706
16,690Millionsof yen27,83014,862%60 .0(54.6)For the first half ended August 31, 2021
For the first half ended August 31, 2020%
87.3
(57.7)

Profit attributable toowners of parent
Millions%of yen17,405426.2
3,307(83.6)

18,811 million yen
6,758 million yen

178.3 %
(63.8)%

Profit per share
Yen
173.93
33.05

Diluted profit per share
Yen
173.7933.03

Total assets

Net assets

Millions of yen

Millions of yen

Shareholders’ equity
ratio%

August 31, 2021

1,320,872

284,316

21.1

February 28, 2021

1,365,430

272,931

19.6

For the first half ended
August 31, 2021
August 31, 2020
(2) Consolidated financial position

As ofReference: Shareholders’ equity:
As of August 31, 2021
As of February 28, 2021

278,915 million yen
267,632 million yen

2. Dividends
1Q
Yen
2020 fiscal year

－

1H
Yen
75.00

2021 fiscal year

－

75.00

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

Total
Yen
150.0075.00

150.002021 fiscal year (forecast)
Note: Revision of the most recent dividends forecast: None－

3. Forecast of consolidated operating results for the 2021 fiscal year ending February 28, 2022 (from March 1,
2021 to February 28, 2022)
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
Millions
Millions
Millions
%
%
%
%
Yen
of yenof yenof yenof yen2021 fiscal year
716,000
7.5
50,000 22.3
47,000 25.0
15,50078.4
154.88
Note: Revision of the most recent consolidated operating results forecast: Yes
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: None
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 August 31, 2021:
100,300,000
As of February 28, 2021:
2. Number of treasury shares at the end of period
As of August 31, 2021:
228,774

100,300,000

As of February 28, 2021:

232,954

3. Average number of shares during the period (cumulative six months)
As of August 31, 2021:
100,069,928
As of August 31, 2020:

100,064,618

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 be materially different from those in theforecast as a result of various factors. For preconditions of these financial forecasts and notes concerning theiruse, 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 ························································································

16(Going Concern Assumption) ·············································································································

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

16(Additional Information) ····················································································································

16(Significant Subsequent Events) ·········································································································

161

1．Qualitative Information Regarding Quarterly Financial Results(1) Explanation Regarding Consolidated Operating Results
During the first half of fiscal 2021, six months from March 1 to August 31, 2021, we continued to takerigorous 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 establishment, we renovated our stores and revamped
our product lineups in Domestic Convenience Store Business in response to changes in the businessenvironment, and the whole Lawson Group endeavored to resolve medium- to long-term issues for sustainablegrowth, acquisition of new revenue opportunities and foster job satisfaction.
As a result, for the first half of fiscal 2021 on a consolidated basis, gross operating revenue increased to348,768 million yen (up 8.0% from previous fiscal year), operating income increased to 26,706 million yen(up 60.0% from previous fiscal year) and ordinary income increased to 27,830 million yen (up 87.3% fromprevious fiscal year). Profit attributable to owners of parent was 17,405 million yen (up 426.2% from previous
fiscal year).
We also focused on improving our group-wide internal control system and addressing operating risks basedon the 2021 Basic Policy for Improvement of Internal Control Systems. We will continue promoting internal
control going forward.
In addition, with a view to promoting the Sustainable Development Goals (SDGs) and focusing on
environmental, social and governance (ESG) practices in management, we established the Lawson Group
Human Rights Policy and Lawson Group Sustainability Policy in June and August 2021, respectively, andrevised the Lawson Group Environmental Policy in August.
Operating results by business segment were as follows.
(Domestic Convenience Store Business)
During the first half under review, the number of new COVID-19 cases began an upward trend in July 2021,
and the declaration of state of emergency was issued in many areas in August. While workplace vaccination
proceeded along with municipal vaccination, legal and voluntary restrictions continued to be imposed on avariety of social activities. On top of this, there were heavy rainfall events over a wide area from western toeastern Japan in August, which also had a negative impact on the store visits trend.
Under the circumstances, Lawson has been proceeding with store renovation by carefully examining thebusiness environment surrounding each store and customizing the refurbishment to suit the circumstances inorder to help our stores adapt to changes taking place in the new normal business environment and better
address customer needs. By the end of August 2021, we had completed the renovation of some 800 stores, andare working to refurbish around 5,000 stores by the end of the fiscal year ending February 2022.
In store operation, 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. By developing distinctive
2

products that are compellingly delicious and health-conscious, we are aiming to further reinforce our productlineup, while rigorously working to offer thoughtful customer service at our stores and ensure environmental
friendliness by reducing food waste, the use of plastics and CO2 emissions, etc. In June 2021, we initiated a pilot
experiment at some stores involving an AI-based discount campaign with the aim of reducing food waste. Also,
we started using light-duty hydrogen fuel cell trucks at our distribution centers in Tokyo in July in an effort todecrease CO2 emissions.

[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, such as offering items subject to heightened demand amid the COVID-19 crisis. Furthermore,
we kept up our initiatives to increase the profitability of franchise stores, including helping them streamline theirstore operation and reduce costs associated with food waste and utility expenses.

[Merchandising and Service Strategies]
Sales continued to surge in fresh foods, frozen foods, daily delivered foods, room temperature
Japanese/Western desserts, and alcoholic beverages, whose assortments we have been endeavoring to expand withthe aim of supporting the daily lives of customers. In the rice range, our “Korega BENTO” box lunch series, which
was revamped into a long-lasting chilled range in March 2021, continued to record steady sales during the second
quarter under review, and our “Kinshari Onigiri Rice Ball” series also enjoyed robust sales along with the modified
regular lineup of onigiri rice balls. Among the fast-food counter items, our regular products such as our “Karaage-kun” chicken nuggets—which are marking the 35th anniversary of their debut—and our “Torikara” chicken
fries as well as the summer-limited products sold at MACHI cafés achieved strong sales. Partly owing to customers
having less opportunities to go out, the Machikado Chubo in-store kitchen service enjoyed especially strong
demand for items offered in collaboration with food service companies that provide delicious dishes from specialty
restaurants as well as the “Local Bowl Series” that responds to regional needs. Machikado Chubo in-store kitchens
are installed at approximately 7,100 stores as of the end of August 2021, achieving sales growth even amid the
COVID-19 crisis. In response to the ongoing high demand, we are installing the kitchen at more stores.
In food delivery service, for which needs have been growing owing to the COVID-19 crisis, we started offering
a delivery service through DiDi Food in July 2021 in addition to Uber Eats, foodpanda and Wolt. As a result, thecombined number of stores listed on food delivery services reached 2,089 in 32 prefectures as of August 31, 2021.
In addition, Uber Eats delivers over-the-counter (OTC) drugs sold at 41 LAWSON stores in 9 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, 2020
To August 31, 2020
Sales
Percentage(Millions of yen) of total (%)
583,479
53.4

Current fiscal year
From March 1, 2021
to August 31, 2021
Sales
Percentage(Millions of yen)of total (%)
601,285
53.7

Fast foods

233,105

21.3

242,822

21.7

Daily delivered foods

176,478

16.2

176,873

15.8

Nonfood products

98,834

9.1

98,2448.8

1,091,898

100.0

1,119,225

100.0

Total

[Store Development]
In opening new stores, the Group continued to focus on developing profitable stores.
During the first half under review, the total number of LAWSON, NATURAL LAWSON and LAWSONSTORE100 stores opened in Japan stood at 292 stores. Meanwhile, we closed a total of 117. As of the end of
August 2021, the total number of domestic stores was 14,651.* Based on the joint business agreement
concluded with POPLAR Co., Ltd. in September 2020, we converted 122 stores from its brand to the LAWSONPOPLAR or LAWSON brand stores. Based on the comprehensive business alliance entered into with H2O
Retailing Corporation in May 2021, Lawson converted 26 station stores and convenience stores operated byasnas Co., Ltd., an H2O Retailing Corporation Group company, from “asnas” stores into LAWSON stores.
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 254 stores (includes 49 pharmacy LAWSON stores equipped withdrug-dispensing pharmacies) as of the end of August 2021. Moreover, the number of stores offering nursing
care consultation services has reached 23 as of the end of August 2021. 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 339 as of the end of August 2021. Building on our expertisedeveloped through operation of in-hospital LAWSON stores, we will continue to support the lives of all peopleinteracting with hospitals.
With the aim of supporting our customers’ beauty, health, and comfortable lifestyles, our NATURALLAWSON stores offer an exclusive assortment of items including original products adopting select ingredients
as well as products produced in collaboration with renowned brand names. Meanwhile, our LAWSONSTORE100 stores, which are mini supermarkets in the size of a convenience store, aim to sustain the daily
lives of consumers by offering high-quality, safe and reliable fruits and vegetables with a focus on freshness.
The stores are visited by customers of all ages including children and the elderly, and particularly single people
and homemakers. As of the end of August 2021, we operate 137 NATURAL LAWSON stores and 671
LAWSON STORE100 stores.
4* 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, 2021

Change during
period13,654

189

13,843

NATURAL LAWSON

143

(6)

137

LAWSON STORE100

679

(8)

671

14,476

175

14,651LAWSON

Total

Total stores as ofAugust 31, 2021

[Number of LAWSON stores by prefecture (As of August 31, 2021)]
Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores

Hokkaido

681

Ibaraki

225

Kyoto

327

Ehime

212

Aomori

280

Tokyo

1,702

Shiga

155

Tokushima

134

Akita

183

Kanagawa

1,079

Nara

140

Kochi

139

Iwate

182

Shizuoka

281

Wakayama

153

Fukuoka528

Miyagi

258

Yamanashi

138

Osaka

1,138

Saga

75

Yamagata

112

Nagano

174

Hyogo

670

Nagasaki

124

Fukushima

172

Aichi

725

Okayama

230

Oita

197

Niigata

227

Gifu

182

Hiroshima

288

Kumamoto

162

Tochigi

200

Mie

138

Yamaguchi

128

Miyazaki

111

Gunma

241

Ishikawa

105

Tottori

139

Kagoshima

201

Saitama695

Toyama183

Shimane142

Okinawa
252
Total
Chiba
602
Fukui
108
Kagawa133
14,651(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 216,245 million yen (up1.6% from previous fiscal year) and segment profit of 18,528 million yen (up 34.7% from previous fiscal year).

(Seijo Ishii Business)
Seijo Ishii provides customers with well-selected, safe, and reliable foods under its philosophy of “Quality foodfor a quality life.” Operating diverse store formats including street-side stores and stores in station buildings andcommercial 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 stores reached 167 as of the end of August 2021. During the first half under review, the sales of stores instation buildings and commercial facilities continued to be strong, and sales of street-side stores grew as well. On
5the product side, capturing the demand from stay-at-home customers steadily amid the COVID-19 crisis, dishes
produced in-house at central kitchen and perishables as well as fish enjoyed strong sales. We are striving toelevate the brand power of Seijo Ishii by pursuing higher standards in our product development expertise,know-how acquired as a manufacturing retailer, and retailing techniques.

As a result, Seijo Ishii Business posted gross operating revenue of 53,890 million yen (up 8.2% fromprevious fiscal year) and segment profit of 5,377 million yen (up 11.6% from previous fiscal year).

(Entertainment-related Business)
Our Entertainment-related Business undertaken by Lawson Entertainment, Inc. continued to see a recovery
trend in its ticket transaction value during the second quarter under review, driven by such event types asconcerts and theatrical performances, although many events were postponed, cancelled or restricted in termsof the number of admissions due to reinstatement of the state of emergency and quasi-emergency from Julythrough August 2021. As concerts for popular artists are likely under preparation, we have started organizing
transactions for tickets and related products. We are also continuing with our efforts to expand ticket
transactions for online live performances, a fledgling market, while striving to expand sales for our e-commercebusiness, which has sustained steady performance, by commencing live commerce in August 2021. In our
product sales business, a total of 57 stores are in operation nationwide as of August 31, 2021, including ourmainstay HMV stores dedicated to selling music and video software, HMV&BOOKS, which markets books,
CDs and DVDs, and HMV record shop stores specializing in analog records. Stores are making efforts to
expand earnings through a range of measures including procuring limited items tied to new music and video
products.
United Cinemas Co., Ltd., an operator of cinema complexes, has been affected by states of emergency andquasi-emergency in applicable regions, such as having to reduce seating capacity by 50% and adopt shorter
operating hours, but its audience numbers and sales are seeing a recovery trend. As of August 31, 2021, 42
cinema complexes nationwide with 387 screens are operating.

As a result, Entertainment-related Business posted gross operating revenue of 32,186 million yen (up 28.8%
from previous fiscal year) and segment profit of 879 million yen (segment loss was 1,037 million yen inprevious fiscal year).
(Financial Services Business)
With respect to our Financial Services Business, we worked to expand our network of financial institution
partners and improve the Lawson Bank ATM service in our foundational ATM business, which is subject tothe impact of fluctuations in the number of LAWSON store visits resulting from the spread of COVID-19. Asof the end of August 2021, the number of ATMs installed nationwide reached 13,589 (up 124 from previous
fiscal year), with each ATM used 47.3 times a day on average (up 5.5 from previous fiscal year). The total
number of our financial institution partners reached 377 nationwide (up 251 from the previous fiscal year) withthe addition of shinkin banks in April 2021. Our “instant bank account settlement service” allows users to6withdraw money from their bank account to top up a mobile payment app by harnessing Lawson Bank’s ATMs
and their transaction network. During the second quarter under review, the service was expanded by adding one
financial institution partner for a total of eight participating financial institutions. For our “ATM charge service,”where cash can be charged at an ATM to “au Pay,” “WebMoney Prepaid Card” or “PayPay” mobile payment
apps, the number of transactions increased, driven in part by promotional campaigns. We will continue to expand
our partner financial institutions and services. 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 16,895 million yen (up 6.9% fromprevious fiscal year) and segment profit of 1,429 million yen (up 93.0% 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 3,958 as of the end of August 2021,
up 614 stores from the end of previous fiscal year. Lawson is ranked fifth in terms of the total number of stores in
China, one of the highest among all Japanese convenience store operators. In addition to opening new storesthrough our subsidiaries, we are also launching stores by concluding area license agreements with local partners.
As a result, we are seeing an expansion of our store network in China and an increased recognition of Lawson in
the country, which has led to rises in the number of franchised store applicants, franchised store openings, anddirectly operated stores converting to franchise stores. We will continue working to expand our network of stores,
offer our signature high-quality original products in wider areas, enhance recognition of Lawson, and increase
earnings.
We are also working to address environmental issues. In July 2021, Dalian Lawson, Inc., a subsidiary of
Lawson, Inc., opened a state-of-the-art store in Dalian, Liaoning Province, in collaboration with Panasonic
Corporation of China. The store is responding to post-pandemic customer needs and contributes to achieving theSDGs.
In other regions of the world, although some stores have suspended their operations in response to the spreadof COVID-19, all other stores are carrying out normal operations with rigorous infection prevention measures inplace, sustaining the daily lives of our customers as their most accessible store.

7

[Distribution of LAWSON Brand Stores Overseas by Region]
Number of stores(As of February 28,
2021)

Country/Region
China

Shanghai and surrounding area
(Shanghai, Zhejiang, Jiangsu)

China

Changeduring fiscal
year

Number of stores(As of August 31,
2021)

1,826

254

2,080

Chongqing

341

78

419

China

Liaoning (Shenyang, Dalian)

327

84

411

China

Beijing and surrounding area
(Beijing, Tianjin, Hebei)

215

47

262

China

Hubei (Wuhan, etc.)

441

36

477

China

Anhui (Hefei, etc.)

106

45

151

China

Hunan (Changsha)

65

30

95

China

Hainan (Haikou, etc.)

23

40

63

China

Subtotal

3,344

614

3,958

Thailand

140

10

150

Indonesia

68

-

68

Philippines

67

-

67

2

-

2

3,621

624

4,245

United States of America

HawaiiTotal

As a result, Overseas Business posted gross operating revenue of 35,317 million yen (up 43.9% fromprevious fiscal year) and segment profit of 632 million yen (segment loss was 1,371 million yen in previous
fiscal year).

(2) Explanation Regarding Consolidated Financial Position①

Assets, liabilities and net assets at the end of the first half of fiscal year 2021
Current assets decreased by 35,059 million yen from the end of the previous fiscal year to 655,752 million

yen, mainly reflecting a decrease of 31,687 million yen in cash and deposits, a decrease of 1,674 million yen
in current assets-other due to a decrease in prepaid expenses and decrease of 1,280 million yen in accounts
receivable-other. Non-current assets decreased by 9,498 million yen from the end of the previous fiscal year to665,120 million yen, mainly reflecting a decrease of 8,094 million yen in investments and other assets, adecrease of 4,491 million yen in intangible assets and an increase of 3,086 million yen in property and store
equipment. Consequently, total assets decreased by 44,558 million yen from the end of the previous fiscal year
to 1,320,872 million yen.
Current liabilities decreased by 53,496 million yen from the end of the previous fiscal year to 714,258
million yen, mainly reflecting a decrease of 103,321 million yen in deposits received, a decrease of 35,550
million yen in short-term loans payable, an increase of 64,871 million yen in current liabilities-other due to the
movement in call money and an increase of 14,127 million yen in accounts payable-trade. Non-current
liabilities decreased by 2,446 million yen from the end of the previous fiscal year to 322,297 million yen,8mainly reflecting a decrease of 3,879 million yen in lease obligations. Consequently, total liabilities decreased by
55,942 million yen from the end of the previous fiscal year to 1,036,556 million yen.
Net assets increased by 11,384 million yen from the end of the previous fiscal year to 284,316 million yen,mainly reflecting an increase of 9,949 million yen in retained earnings and an increase of 1,474 million yen inforeign currency translation adjustment. Consequently, shareholders’ equity ratio was 21.1%, up from 19.6% asof the end of the previous fiscal year.

②

Cash flows during the first half of fiscal year 2021
Cash and cash equivalents at August 31, 2021 decreased by 32,653 million yen from the end of the previous

fiscal year to 368,483 million yen.
Net cash provided by operating activities was 47,536 million yen, a decrease of 70,817 million yen from thecorresponding period of the previous fiscal year, mainly because of the movement in deposits received and callmoney for banking business.
Net cash used in investing activities was (13,852) million yen, a decrease of 3,927 million yen from thecorresponding period of the previous fiscal year, mainly because of decreases in purchase of property and store
equipment, an increase in proceeds from sale of investment securities and a decrease in proceeds from collectionof guarantee deposits.
Net cash used in financing activities was (67,411) million yen, a decrease of 49,782 million yen from thecorresponding period of the previous fiscal year, mainly because of an increase in repayments of long-term loans
payable and the movement in short-term loans payable.

(3) Explanation Regarding Forward-looking Statements
Regarding the financial forecast for the current full fiscal year ending February 28, 2022, the forecast of
consolidated gross operating revenue, ordinary income and profit attributable to owners of parent have beenrevised 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 fromthose expressed or implied in the forecasts due to changes in various factors.
Previous forecast
Forecast(millions of yen)

Revised forecast

YoY comparison(%)

Forecast(millions of yen)

YoY comparison(%)

Gross operating revenue

728,000

109.3

716,000

107.5

Operating income

50,000122.3

50,000122.3

Ordinary income

45,000119.6

47,000125.0

Profit attributable to owners of parent

13,500155.4

15,500178.4

9

2. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheet
As of February 28, 2021 and August 31, 2021
(Millions of yen)

AssetsCurrent assets:
Cash and deposits
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
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, 2021

Current 1st Half
As of
August 31, 2021

402,584
46,385
16,621
20,657161,062
43,5192(20)690,811
690,811

370,897
46,027
15,684
21,535
159,781
41,845(20)
655,752

191,977
19,044
131,779
24,838367,640

193,757
20,292129,035
27,641
370,727

39,08838,2158,349
752
86,40636,81936,3298,035
731
81,91540,621103,030
33,48444,099(663)
220,571674,618
1,365,430

39,548103,388
31,656
38,573(688)
212,477
665,120
1,320,872

(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, 2021

Current 1st Half
As of
August 31, 2021

127,486
42,320100,000
44,58490,798
4,078
246,110
4,818
107,557
767,754

141,6136,770
100,000
44,93894,172
6,565
142,789
4,980
172,428
714,258

130,000
121,491
485

130,000
117,612
467

277

240

16,27835,694
20,516
324,743
1,092,498

16,79036,27020,915322,297
1,036,556

58,50646,494
158,498(991)
262,50858,50646,495
168,448(973)
272,477

1,782
(207)
3,684
(134)
5,123
333
4,965
272,931
1,365,430

1,560
(207)
5,158
(71)
6,438
368
5,031
284,316
1,320,872

(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, 2021 and the first half of the fiscal year ending February
28, 2022(Millions of yen)Previous 1st Half
From March 1, 2020
to August 31, 2020
322,890
129,683
88,65841,025Gross 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 (loss) attributable to non-controlling interests
Profit attributable to owners of parent

12

Current 1st Half
From March 1, 2021
to August 31, 2021
348,768
145,150
99,23445,916145,908
47,298193,206
234,232
217,541
16,690148,836
54,781
203,617249,534
222,827
26,706

327
284

448
276

119

1,664

409

584

959
2,100

873
3,846

1,943
957
1,028
3,929
14,862

1,753
613
356
2,722
27,830

―
―

1,025
1,025

1,832
2,099
2,910
635
7,478
7,383
2,231
1,954
4,185
3,198
(109)
3,307

595
1,243
566
396
2,801
26,055
6,767
1,880
8,647
17,4071
17,405

(Consolidated Statement of Comprehensive Income)For the first half of the fiscal year ended February 28, 2021 and the first half of the fiscal year ending February
28, 2022(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, 2020
to August 31, 2020
3,198

Current 1st Half
From March 1, 2021
to August 31, 2021
17,407

3,786
(316)
90
3,560
6,758

(221)
1,562
62
1,404
18,811

6,894
(135)

18,72090

(3) Consolidated Statement of Cash Flows
For the first half of the fiscal year ended February 28, 2021 and the first half of the fiscal year ending February
28, 2022
Previous 1st Half
From March 1, 2020
to August 31, 2020
Net cash provided by (used in) operating activities:
Profit before income taxes
Depreciation and amortization
Impairment loss
Interest income
Interest expenses
Loss (gain) on sales of investment securities
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
Net decrease (increase) in call loans for banking business
Net increase (decrease) in call money for banking business
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 securities
Proceeds from redemption of securities
Purchase of property and store equipment
Purchase of intangible assets
Proceeds from sales of investment securities
Purchase of shares of subsidiaries and associates
Payments of long-term loans receivableCollection of long-term loans receivable
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Purchase of long-term prepaid expenses
Other
Net cash provided by (used in) investing activities

14(Millions of yen)
Current 1st Half
From March 1, 2021
to August 31, 2021

7,383
40,500
2,099
(327)
1,943
―
1,832
7,111
8,511
8,234
(7,482)(50,920)303(10,000)
73,00043,212
125,403343(1,958)(5,435)
118,353

26,05539,323
1,243
(448)
1,753
(1,025)
595
439
1,546
13,1882,912(103,336)
505―
45,00025,521
53,272431(1,728)(4,438)47,536――(13,203)(4,692)―(1,203)(2,231)
2,444(5,995)9,047(135)(1,809)(17,779)(4,000)4,000(16,500)(3,761)5,974(106)(1,265)
2,398(6,060)
5,869
(830)
430
(13,852)

Previous 1st Half
From March 1, 2020
to August 31, 2020
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
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 in cash and cash equivalents resulting from merger withunconsolidated subsidiaries
Cash and cash equivalents at end of period

15(Millions of yen)
Current 1st Half
From March 1, 2021
to August 31, 2021

(3,500)(80,000)(26,165)(7,504)(24)(117,194)(96)(16,717)343,583(35,550)―(24,331)(7,505)(24)(67,411)
1,054(32,673)401,136―19

326,865

368,483(4) Notes to Consolidated Financial Statements(Going Concern Assumption)
Not Applicable.

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

(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.

(Significant Subsequent Events)(Borrowing of Funds)
Lawson Bank, Ltd., a consolidated subsidiary of the Company, borrowed the following funds based on the
resolution of the board of directors meeting held on September 16, 2021.
Summary of Borrowing(1) LenderTwo financial institutions and Mitsubishi Corporation Financial &Management Services (Japan) Ltd.

(2) Loan amount

50,000 million yen(3) Interest rate

Fixed interest rate and floating rate(4) Execution date

September 30, 2021

(5) Borrowing period

Three years(6) Use of proceeds

Working capital

16