Flash Report on the Consolidated Financial Results
for the Third Quarter of the Fiscal Year Ending February 28, 2021
January 8, 2021
Listed Company Name: Lawson, Inc.
Tokyo Stock Exchange (First Section)
Code No.: 2651
(URL http://www.lawson.jp/en/ir)
Company Representative: Sadanobu Takemasu, President and CEO, Representative Director,
Chairman of the Board
Contact: Tomoki Takanishi, Deputy Senior Vice President, Financial Administration Division Director
Tel.: +81-3-5435-2773
Scheduled date for submission of quarterly securities report: January 14, 2021
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, 2020 (from March 1, 2020 toNovember 30, 2020)(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, 2020
November 30, 2019
Note: Comprehensive income:Gross operating
revenue
Millions%of yen497,425(9.7)
550,901
4.4

Operating income

Ordinary income

Millionsof yen32,35652,122Millionsof yen30,273
48,663%(37.9)
9.0

For the third quarter ended November 30, 2020
For the third quarter ended November 30, 2019%(37.8)
4.3

Profit attributable toowners of parent
Millions%of yen11,904(54.1)
25,953
2.5

15,478 million yen
23,890 million yen(35.2)%(12.5)%

Profit per share
Yen
118.96259.37

Diluted profit per share
Yen
118.88259.22

Total assets

Net assets

Millions of yen

Millions of yen

Shareholders’ equity
ratio%

November 30, 2020

1,314,656

275,631

20.6

February 29, 2020

1,357,732

275,347

20.0

For the third quarter ended
November 30, 2020
November 30, 2019(2) Consolidated financial position

As ofReference: Shareholders’ equity:
As of November 30, 2020
As of February 29, 2020

271,261 million yen
270,877 million yen

2. Dividends

2019 fiscal year

1Q
Yen
－

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

2020 fiscal year

－

75.00

2020 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 2020 fiscal year ending February 28, 2021 (from March 1,
2020 to February 28, 2021)
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
shareMillions
Millions
Millions
Millions
%
%
%
%
Yen
of yenof yenof yenof yen2020 fiscal year
670,000(8.2)
35,000(44.4)
30,000(46.8)
5,000(75.1)
49.96
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: 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 November 30, 2020:
100,300,000
As of February 29, 2020:
2. Number of treasury shares at the end of period
As of November 30, 2020:
232,904

As of February 29, 2020:

3. Average number of shares during the period (cumulative nine months)
As of November 30, 2020:
100,065,438
As of November 30, 2019:100,300,000

237,762
100,061,191

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······································································

9(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(Additional Information) ····················································································································

141

1．Qualitative Information Regarding Quarterly Financial Results(1) Explanation Regarding Consolidated Operating Results
During the third quarter of fiscal 2020, nine months from March 1 to November 30, 2020, the novel
coronavirus disease (COVID-19) spread across the world. A temporary state of emergency was declared inJapan, but after the declaration was lifted a gradual recovery trend was seen in the nation’s economic andsocial activities, in part driven by the government-led Go To Travel and Go To Eat campaigns. Meanwhile,
restrictions on large-scale events have continued and remote working has become prevalent among consumers,
which together have brought changes to consumer lifestyles and purchasing behavior. Such changes have also
affected the business of the Lawson Group, significantly reducing its net sales, but the Group continues tostrive to address the changes by strengthening its merchandise assortment in line with the shifting customer
demands, among other measures.
As a result, for the third quarter of fiscal 2020 on a consolidated basis, gross operating revenue decreased
to 497,425 million yen (down 9.7% from previous fiscal year), operating income decreased to 32,356 million
yen (down 37.9% from previous fiscal year) and ordinary income decreased to 30,273 million yen (down
37.8% from previous fiscal year). Profit attributable to owners of parent decreased to 11,904 million yen(down 54.1% from previous fiscal year).
Against such a backdrop, we considered what Lawson could do, and took rigorous precautionary measures
to protect our customers and employees from infection and flexibly responded to changing customer needs
while continuing with our business operations. Notwithstanding the increasingly challenging businessenvironment surrounding Lawson, Inc. and its franchise stores, our headquarters and franchise stores aremaking unified efforts toward our shared goal, “Creating Happiness and Harmony in Our Communities,”
under Lawson’s Way, our new action guideline set forth this fiscal year.
Furthermore, we also focused on improving our group-wide internal control system and addressing
operating risks based on the 2020 Basic Policy for Improvement of Internal Control Systems. We willcontinue promoting internal control going forward.

Operating results by business segment were as follows.
It should be noted that new reportable segments have been applied since the first quarter of fiscal 2020 andthat the comparison and analysis of figures for the nine months from March 1 to November 30, 2020 werebased on the new reportable segments.
(Domestic Convenience Store Business)
Signs of recovery were seen in the number of customers and sales, which had decreased owing to theprevalence of remote working and reduced opportunities to go out amid the spread of COVID-19. However, in
September, stores were temporarily closed in the Kyushu region as well as in Yamaguchi and Ehime prefecturesdue to Typhoon Haishen, and the number of new cases of infection rose sharply from November, which had an
impact on the number of customer visits. Against this backdrop, as precautionary store measures against
COVID-19, we continued to have transparent plastic barriers installed at cash registers; ensured social
distancing; and made sure employees practiced rigorous hand washing and gargling, disinfected their handswith alcohol-based disinfectant, and wore face masks, giving top priority to the safety of customers and store
2

employees.
In store operations, we are striving to establish LAWSON stores as convenience stores endorsed by all ourcustomers. To this end, we are continuing to implement measures to achieve our three commitments, namely,
to pursue compelling taste, to be considerate to people, and to be environmentally friendly. By developing
distinctive products that are compellingly delicious and health-conscious, we are aiming to further reinforce
our product lineup, 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.
[Store Operations]
In store operations, we continued to focus on reinforcing adherence to the Three Essential Practices, whichemphasizes (1) serving customers courteously; (2) offering a merchandise assortment focused on basic itemswith high demand; and (3) keeping our stores and communities clean. Furthermore, we kept up our initiatives
to increase the profits made by franchise stores, including helping them streamline their store operation andreduce costs associated with food waste and utility expenses.
[Merchandising and Service Strategies]
Net sales decreased significantly owing to a decline in the number of customers, but sales surged in fivecategories (fresh vegetables, frozen foods, daily delivered foods, alcoholic beverages, and Japanese and Western
confectionery stored at room temperature) as a result of expanding the merchandise assortment in response to
the rise in home cooking instead of dining out. In the frozen food category, for which demand is rising, welaunched the “Bistro” series that goes well with wine with the aim of allowing customers to casually enjoy alittle luxury at home. We will continue creating stores tailored to customers’ changing lifestyles and needs amid
the spread of COVID-19.
In the rice range, we revamped our “Kinshari Onigiri Rice Ball” series by blending different varieties ofbrand-name rice—produced in the prefectures of Yamagata, Ishikawa, Toyama, or Gifu—for different
geographic markets. High value-added products in the series such as “Matsutake mushroom and Wagyu beef”
and “Crab and salmon roe” featuring seasonal ingredients were hugely popular.
In the dessert range, our original dessert products contributed to sales. Specifically, the “Uchi Café Spécialité”
series, our newly released “reward dessert” products that bring out the pure tastiness of the ingredients, waswell received by customers, along with our regular products including our BASCHEE Basque-style cheesecake
as well as our novel dessert products that we are continuing to develop.
In food delivery service, for which needs have been growing owing to the COVID-19 crisis, we started
offering delivery service through foodpanda in November 2020 in addition to Uber Eats. As a result, thecombined number of stores listed on food delivery services reached 1,472 in 27 prefectures as of November 30,
2020.
The SMARI service, our non-face-to-face package shipment service using SMARI Box, which had been
designed exclusively for the service and offered at some 2,500 stores in the Tokyo metropolitan area and the
Kinki region, was expanded into the Chubu region in November 2020, with 249 stores in Aichi Prefecture
introducing the service.

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, 2019
to November 30, 2019
Sales
Percentage(Millions of yen)of total (%)
943,324
52.9

Current fiscal year
From March 1, 2020
to November 30, 2020
Sales
Percentage(Millions of yen) of total (%)
877,164
53.5

Fast foods

417,37323.4

350,521

21.4

Daily delivered foods

268,069

15.0

260,812

15.9

Nonfood products

155,353

8.7

151,701

9.2

1,784,121

100.0

1,640,199

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
LAWSON STORE100 stores opened in Japan stood at 313 stores. Meanwhile, we closed a total of 254 such
stores in the country as a result of shutting down stores with low earnings and for other reasons. As of the endof November 2020, the total number of domestic stores was 14,503.*
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 245 stores (includes 52 pharmacy LAWSON stores equipped withdrug-dispensing pharmacies) as of the end of November 2020. Moreover, the number of stores offering nursing
care consultation services has reached 25 as of the end of November 2020. 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 333 as of the end of November 2020. 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 livesof consumers by offering fresh, high-quality, safe, and reliable fruits and vegetables. The stores are visited bycustomers of all ages including children and the elderly, and particularly single people and homemakers. As ofthe end of November 2020, we operate 145 NATURAL LAWSON stores and 685 LAWSON STORE100 stores.
*

The numbers of store openings and closings and total number of stores in Japan include stores operatedby Lawson, Inc. and 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 29, 2020

Change during
periodTotal stores as ofNovember 30, 2020

13,557116

13,673

NATURAL LAWSON

145

－

145

LAWSON STORE100

742

(57)

685

14,44459

14,503

LAWSON

Total[Number of LAWSON stores by prefecture (As of November 30, 2020)]
Prefecture

Numberof stores

Hokkaido

678

Ibaraki

229

Kyoto

322

Ehime

214

Aomori

277

Tokyo

1,700

Shiga

155

Tokushima

135

Akita

183

Kanagawa

1,083

Nara

137

Kochi

139

Iwate

181

Shizuoka

281

Wakayama

152

Fukuoka

517

Miyagi257

Yamanashi

137

Osaka

1,112

Saga

75

Yamagata

114

Nagano

174

Hyogo

660

Nagasaki

114

Fukushima

168

Aichi

727

Okayama

209

Oita

193

Niigata

230

Gifu

182

Hiroshima

248

Kumamoto

160

Tochigi

200

Mie

137

Yamaguchi

120

Miyazaki

110

Gunma

242

Ishikawa

105

Tottori138

Kagoshima

198

Saitama691

Toyama186

Shimane143

Okinawa

244

Chiba

604

Fukui

109

Kagawa133

Total(domestic)

14,503Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores(Note) These figures include stores operated by Lawson, Inc. and equity-method affiliates, Lawson Kochi,Inc., Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.
[Other]On September 10, 2020, Lawson, Inc. entered into a joint business agreement with POPLAR Co., Ltd. toconvert and operate some of the stores under the POPLAR, SEIKATSU SAIKA, and THREE EIGHT brands into
LAWSON POPLAR or LAWSON brand stores.
Based on the content of the “Fact-Finding Survey Report on Transactions between the Headquarters ofConvenience Stores (Franchisers) and their Franchisees” (September 2020) and the “Fact-Finding Survey on
Transactions between the Headquarters of Convenience Stores (Franchisers) and their Franchisees (Overall
Questionnaire Results)” compiled by the Japan Fair Trade Commission, Lawson, Inc. implemented a selfinspection program, and formulated and announced an improvement plan on November 30, 2020.
As part of our measures to enhance the financial stability of our franchise stores, we are proceeding with a rangeof short-, medium-, and long-term initiatives to support them with multiple store ownership, store manager
development, and measures for new franchise owners. In addition, we have been providing financial support tostores facing considerable sales declines due to the spread of COVID-19, and will proceed with further measures5

to increase their sales and profits under strong partnerships with them.
We jointly develop products with regional business operators nationwide that have been affected by COVID19. Through such initiatives, we aim to support local businesses and producers through our LAWSON stores.
In pursuit of solving environmental issues, we launched the “Surprise ‘Whew!’ Kindness Project,” under which
initiatives are undertaken toward the Sustainable Development Goals (SDGs). For example, the proportion ofcustomers declining the use of plastic shopping bags has reached approximately 75%, which exceeds the targetof 60% upheld by the Ministry of the Environment and the Ministry of Economy, Trade and Industry. We willcontinue with our efforts to reduce the use of plastic containers and packages, CO2 emissions from stores, andfood waste. Furthermore, Lawson, Inc. endorsed the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) in April 2020 in its efforts to combat climate change issues. We are disclosing
more information on our environmental initiatives as recommended by the TCFD.
As a result, Domestic Convenience Store Business posted gross operating revenue of 320,403 million yen(down 11.0% from previous fiscal year) and segment profit of 24,511 million yen (down 39.7% from previous
fiscal year).
(Seijo Ishii Business)
At stores of Seijo Ishii, a high-end supermarket chain offering quality foods, we provide our customers withwell-selected, safe, and reliable foods. The number of directly operated Seijo Ishii stores reached 163 as of theend of November 2020. On the back of heightened demand at supermarkets amid the spread of COVID-19,
demand for perishables including fruits and vegetables, meat and fish grew markedly, resulting in strong overallsales. By continuing to leverage the company’s strengths including its product development expertise, know-how
acquired as a manufacturing retailer, and retailing techniques, we will endeavor to enhance the brand capacity of
Seijo Ishii.
As a result, Seijo Ishii Business posted gross operating revenue of 75,423 million yen (up 11.2% from previous
fiscal year) and segment profit of 7,115 million yen (up 26.8% from previous fiscal year).
(Entertainment-related Business)
With regard to our Entertainment-related Business, the ticketing business of Lawson Entertainment, Inc., weexperienced a precipitous drop in ticket transaction value as a result of event cancellations and postponements
owing to the spread of COVID-19. Hosting of large-scale events continues to be restricted, but we are striving to
expand the ticket transactions to live streaming events by prominent artists, along with tickets for leisure facilities
and sports events that have resumed. In our product sales business, a total of 58 stores are in operation nationwide
as of November 30, 2020, including our mainstay HMV stores dedicated to selling music and video software,
HMV&BOOKS, which markets books, CDs and DVDs, and HMB record shop stores specializing in analog
records.
United Cinemas Co., Ltd., an operator of cinema complexes, was operating its theaters at 50% of the maximum
audience capacity after the lifting of the state of emergency declaration, but in line with the scale and customer
6

demand for each film, the theaters are now accommodating audiences at 100% maximum capacity by taking
necessary infection countermeasures. With popular films launched in October 2020, there has been a significant
surge in audience numbers, resulting in sales that show a recovery trend. As of November 30, 2020, all 43 sites
nationwide offering 389 screens including those operated on commission are in operation while taking rigorous
measures to protect their customers and employees from infection.
As a result, Entertainment-related Business posted gross operating revenue of 42,623 million yen (down 35.3%
from previous fiscal year) and segment loss of 101 million yen (segment profit was 4,979 million yen in previous
fiscal year).
(Financial Services Business)
With respect to our Financial Services Business, in our ATM business, the foundation of our banking business,
we expanded our network of financial institution partners, while working to expand the ATM service of Lawson
Bank, Inc.
As of the end of November 2020, the number of ATMs installed nationwide reached 13,479 (up 126 fromprevious fiscal year), with each ATM used 42.7 times a day on average, decreasing as a result of the decline in
the number of customers visiting LAWSON stores due to the spread of COVID-19. The total number of our
financial institution partners was 126 nationwide (up 2 from previous fiscal year), including online banks.
By harnessing Lawson Bank’s ATMs and their transaction network, we are continuing with our efforts toenhance the bank’s functions and convenience and to expand our service partners. In June 2020, we started
offering an “instant bank account settlement service,” in which money can be withdrawn from a user’s bankaccount to top up a mobile payment app. Furthermore, other new services have been launched including the “ATMcharge service,” where cash can be charged to the user’s mobile payment app at an ATM; the “smartphone ATM
service,” which allows the user to deposit and withdraw cash at an ATM with the bank’s smartphone app without
using the user’s bank card; and the “ATM deposit service for business operators,” which allows store revenues tobe deposited to a Lawson Bank account at an ATM by using a dedicated deposit card. In addition, the LAWSON
Ponta Plus credit card issued by Lawson Bank allows cardholders to earn additional Ponta points when making
purchases with their card at LAWSON, NATURAL LAWSON, and LAWSON STORE100 stores to encourage
the use of the card. By implementing promotional campaigns and soliciting new cardholders at LAWSON stores,
we have also been expanding its membership.
As a result, Financial Services Business posted gross operating revenue of 23,820 million yen (down 7.5% fromprevious fiscal year) and segment profit of 1,380 million yen (down 35.1% 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).
In the People’s Republic of China, we have expanded mainly into Shanghai, as well as into Chongqing, Dalian,Beijing, Wuhan, Hefei, Changsha, Shenyang, and other cities. In October 2020, we advanced into Haikou, Hainan
province. The number of LAWSON stores in the entire country reached 3,158 as of the end of November 2020.
7

In response to the spread of COVID-19, we closed some stores or shortened their opening hours overseas, but
normal operations at almost all stores have now resumed.

[Distribution of LAWSON Brand Stores Overseas by Region]
Number of stores(As of February 29,
2020)

Changeduring fiscal
year

Number of stores(As of November 30,
2020)

1,574

172

1,746

China Chongqing

235

75

310

China Dalian

192

47

239

China Beijing and surrounding area

153

48

201

China Shenyang

26

43

69

China Wuhan

401

33

434

China Hefei

50

46

96

China Changsha

15

36

51

China Haikou

－

12

12

Thailand

133

9

142

Indonesia

72

(5)

67

Philippines

65

－

65

United States of America Hawaii

2

－

2

2,918

516

3,434

Country/Region
China Shanghai and surrounding area

Total

As a result, Overseas Business posted gross operating revenue of 42,814 million yen (up 10.2% fromprevious fiscal year) and segment loss of 188 million yen (down 85.7% from previous fiscal year).

8(2) Explanation Regarding Consolidated Financial Position
Assets, liabilities and net assets at the end of the third quarter of fiscal year 2020
Current assets decreased by 18,602 million yen from the end of the previous fiscal year to 618,095 million
yen, mainly reflecting a decrease of 9,415 million yen in accounts receivable and a decrease of 5,656 million
yen in current assets-other due to the movement in call loans for banking business. Non-current assets
decreased by 24,473 million yen from the end of the previous fiscal year to 696,561 million yen, mainlyreflecting decreases of 10,404 million yen in property and store equipment, 8,191 million yen in intangible
assets. Consequently, total assets decreased by 43,075 million yen from the end of the previous fiscal year to
1,314,656 million yen.
Current liabilities increased by 149,910 million yen from the end of the previous fiscal year to 711,874
million yen, mainly reflecting an increase of 100,000 million yen in current portion of long-term borrowings,
an increase of 91,673 million yen in current liabilities-other due to the movement in call money for banking
business, and a decrease of 46,313 million yen in deposits received. Non-current liabilities decreased by
193,270 million yen from the end of the previous fiscal year to 327,151 million yen, mainly reflecting adecrease of 180,000 million yen in long-term loans payable. Consequently, total liabilities decreased by
43,359 million yen from the end of the previous fiscal year to 1,039,025 million yen.
Net assets increased by 284 million yen from the end of the previous fiscal year to 275,631 million yen,mainly reflecting an increase of 3,597 million yen in valuation difference on available-for-sale securities anda decrease of 3,367 million yen in retained earnings. Consequently, shareholders’ equity ratio was 20.6%, up
from 20.0% as of 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, 2021, the financial forecasts
remain unchanged from those announced on July 9, 2020.

9

2. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheet
As of February 29, 2020 and November 30, 2020
(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 29, 2020

Current 3rd Quarter
As ofNovember 30, 2020

343,587
47,366
17,876
20,985
159,12247,802(42)636,697

338,969
47,802
17,114
22,389149,706
42,145(33)
618,095

201,526
20,093
146,235
25,082392,938

201,459
18,912
137,863
24,298382,534

45,151
42,381
8,849
680
97,06340,49839,1658,505
702
88,871

42,488107,193
34,37847,604(630)
231,033
721,035
1,357,732

41,334
103,617
28,48252,321(599)
225,155
696,561
1,314,656

(Millions of yen)

Liabilities
Current liabilities:
Accounts payable-trade
Short-term loans payable
Current portion of long-term borrowings
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 29, 2020

Current 3rd Quarter
As ofNovember 30, 2020

129,397
39,850―45,61094,848
7,915
193,096
4,667
46,577561,963

136,229
57,400100,000
44,392
83,778
1,478
146,783
3,561
138,250
711,874

310,000
136,665521

130,000
123,395
494

282

275

16,24535,335
21,370520,421
1,082,385

16,90435,67920,400327,151
1,039,025

58,50644,605
165,081(1,011)
267,181

58,50644,608
161,713(990)
263,837

1,496
(207)
3,341
(934)
3,695
255
4,214
275,347
1,357,732

5,094
(207)
3,335
(798)
7,423
333
4,036
275,6311,314,656

(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 29, 2020 and the third quarter of the fiscal year ending
February 28, 2021
(Millions of yen)

Gross operating revenue
Net sales
Cost of sales
Gross profit
Operating revenue:
Income from franchised stores
Other operating revenue
Total operating revenue
Operating gross profit
Selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Share of profit of entities accounted for using equity
methodEmployment 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 (loss) before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

12

Previous 3rd Quarter
From March 1, 2019
to November 30, 2019
550,901
226,469
154,089
72,379Current 3rd Quarter
From March 1, 2020
to November 30, 2020
497,425
203,409139,248
64,161

239,242
85,189324,432
396,811344,689
52,122219,735
74,279294,015
358,176
325,820
32,356

508

516

664

408

―

555

1,757
2,929

1,994
3,473

2,964
1,502
1,921
6,388
48,663

2,776
1,416
1,363
5,556
30,273

163
163

―
―

4,380
4,187
―
871
9,439
39,387
11,535
1,951
13,48625,901(52)
25,953

2,421
2,719
3,125
1,037
9,303
20,970
4,943
4,221
9,164
11,805(99)
11,904

(Consolidated Statement of Comprehensive Income)For the third quarter of the fiscal year ended February 29, 2020 and the third quarter of the fiscal year ending
February 28, 2021
(Millions of yen)

Profit (loss)
Other 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, 2019
to November 30, 2019
25,901

Current 3rd Quarter
From March 1, 2020
to November 30, 2020
11,805(1,036)(1,089)115(2,010)23,890

3,597
(59)
135
3,673
15,47823,919(28)

15,632(153)

(3) Notes to Consolidated Financial Statements(Going Concern Assumption)
Not Applicable.
(Notes to Significant Changes in the Amount of Shareholders’ Equity)
Not Applicable.
(Additional Information)(Adoption of Tax Effect Accounting for the Transition from the Consolidated Taxation System to theGroup Tax Sharing System)
With respect to items subject to review under the Non-Consolidated Taxation System conducted to coincidewith the transition from the Consolidated Taxation System to the Group Tax Sharing System stipulated underthe Act on Partial Revision of the Income Tax Act, etc. (Act No. 8 of 2020), the Company and certain domestic
consolidated subsidiaries have not applied the provisions of Paragraph 44 of the Implementation Guidanceon Tax Effect Accounting (ASBJ Guidance No. 28 issued February 16, 2018) in accordance with the treatment
set out in Paragraph 3 of Practical Solution on the Treatment of Tax Effect Accounting for the Transition fromthe Consolidated Taxation System to the Group Tax Sharing System (PITF No.39 issued March 31, 2020).
Accordingly, the amounts of deferred tax liabilities and deferred tax assets have been calculated based on theprovisions of tax laws in effect before the revision.

14