Flash Report on the Consolidated Financial Results
for the First Half of the Fiscal Year Ending February 28, 2018
October 11, 2017
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, Finance and Accounting Division Director
Tel.: +81-3-5435-2773
Scheduled date for submission of quarterly securities report: October 13, 2017
Scheduled date for payment of dividend: November 10, 2017
Supplementary materials for quarterly financial results: Yes
Holding of presentation of quarterly results: Yes (For institutional investors and analysts)(Amounts less than one million yen are truncated)
1. Consolidated operating results for the first half ended August 31, 2017 (from March 1, 2017 to August 31,
2017)(1) Consolidated operating results (cumulative)
Note: Percentages represent increases (decreases) compared with the corresponding period of the previous fiscal
year.

For the first half ended
August 31, 2017
August 31, 2016
Note: Comprehensive income:Gross operating
revenue

Operating income

Ordinary income

Millionsof yen329,402306,231

Millionsof yen38,94539,925

Millionsof yen38,45638,384

%
7.6
5.8

%
(2.5)
ሺ5.0)

For the first half ended August 31, 2017
For the first half ended August 31, 2016

%
0.2
(5.9)

24,500 million yen
20,785 million yen

Profit per share
Yen
236.36226.07

Diluted profit per share
Yen
236.21225.90Total assets

Net assets

For the first half ended
August 31, 2017
August 31, 2016

Profitattributable toowners of parent
Millions%of yen23,644
4.6
22,60814.1
17.9%(3.4)%(2) Consolidated financial position

Millions of yen

Millions of yen

Shareholders’ equity
ratio%

August 31, 2017

918,597289,797

30.9

February 28, 2017866,577

285,995

31.7

As of

Reference: Shareholders’ equity:
As of August 31, 2017
As of February 28, 2017

283,815 million yen
274,880 million yen

2. Dividends

2016 fiscal year

1Q
Yen
－

Annual dividends per share
1H
3Q
Year-end
Yen
Yen
Yen
125.00－125.002017 fiscal year－

127.502017 fiscal year (forecast)
Note: Revision of the most recent dividends forecast: None－

127.50

Total
Yen
250.00
255.003. Forecast of consolidated operating results for the 2017 fiscal year ending February 28, 2018 (from March 1,
2017 to February 28, 2018)
Note: Percentages represent increases (decreases) compared with the corresponding period of the previous fiscal
year.
Profit attributable
Profitto owners ofper share
parentMillions
Millions
Millions
Millions
%
%
%
%
Yen
of yenof yenof yenof yen2017 fiscal year
672,000
6.4
68,500 (7.1) 65,500 (10.3)
33,500(8.0) 334.81
Note: Revision of the most recent consolidated operating results forecast: Yes
Gross operating
Operating income Ordinary income
revenue

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, 2017:
100,300,000
As of February 28, 2017:
2. Number of treasury shares at the end of period
As of August 31, 2017:244,923

100,300,000

As of February 28, 2017:

285,191

3. Average number of shares during the period (cumulative six months)
As of August 31, 2017:
100,034,650
As of August 31, 2016:

100,007,647

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 8.

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

8

2. Consolidated Financial Statements and Main Notes ··················································································

9(1) Consolidated Balance Sheet ···············································································································

9(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ·················

11

Consolidated Statement of Income······································································································

11

Consolidated Statement of Comprehensive Income ·············································································

12(3) Consolidated Statement of Cash Flows ·······························································································

13(4) 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 first half of fiscal 2017, six months from March 1 to August 31, 2017, we have advanced andaccelerated our “1000-Day Action Plan”, which is in its second year, and focused our business activities onbuilding Lawson’s next-generation convenience store model. The convenience store industry is now
undergoing a period of drastic transformation. This is attributable to changes in community needs resulting
from an aging population and the prevalence of the nuclear family, among others, which have triggered a
reorganization of the industry. We have made efforts to evolve our business model as a manufacturing retailer
targeting small catchment areas and to raise our store productivity to an unprecedented level toward the goal of
fulfilling our customers’ needs in everyday life by serving as an essential part of their communities.
As a result, for the first half of fiscal 2017 on a consolidated basis, gross operating revenue increased to329,402 million yen (up 7.6% from previous fiscal year), operating income decreased to 38,945 million yen(down 2.5% from previous fiscal year) and ordinary income increased to 38,456 million yen (up 0.2% fromprevious fiscal year). Profit attributable to owners of parent increased to 23,644 million yen (up 4.6% fromprevious fiscal year).
Furthermore, we also focused on addressing operating risks based on the 2017 Basic Policy for Improvementof Internal Control Systems. We will continue promoting internal control even more.
Operating results by business segment were as follows:(Domestic Convenience Store Business)
In our convenience store business in Japan, we have continued to develop products with features distinct toLawson and strengthened our mainstay products including counter fast food items. We also endeavored toenhance store productivity by such measures as beginning the phased introduction of tablet terminals in August
2017 at Lawson stores nationwide to facilitate proper sales management of counter fast food items. Furthermore,
new point-of-sale (POS) cash registers (for sales information management) equipped with an automatic change
dispenser function will start to be introduced by the end of the current fiscal year with the aim of achieving
higher cash-handling efficiency at stores, including expediting cash register transactions.
[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 also actively promoted
not only existing stores but also new stores by strengthening our product lineup, and improving operations andfranchise support by headquarters.
[Merchandising and Service Strategies]
On the merchandise side, we strengthened our product capacity by expanding our merchandise assortment
under our “Lawson Select” brand with a focus on daily delivered food and frozen food, as well as in our readymade dish lineup with a change in our salad range. Our lineup of rice items, our core category, was also expanded.

2

In the dessert range, the “Uchi Café SWEETS X GODIVA Chocolat Roll Cake,” an item produced incollaboration with Godiva with well-selected ingredients and a special production method, was launched in June
2017, and the “Uchi Café SWEETS X GODIVA Chocolat Pudding,” the second collaborative product with
Godiva, in July 2017. Both products received favorable feedback from our customers. In the counter fast foodrange, the “Deka Yakitori” (large grilled chicken) continued to record strong performance, while in June 2017
the “L-Chiki” (fried chicken), upsized by approximately 40% to around 110 g, also enjoyed robust sales.
Furthermore, in May 2017, five new products were added to our bran bread series*1, popular among healthconscious customers, including sandwich bran bread and bran bread anpan containing sweet red bean paste.
In addition to thus strengthening our merchandise lineup, we also enhanced our service offerings, one ofwhich is our “Gift Cards,”*2 whose transaction value continued to remain solid.
On our sales promotion side, as part of our efforts to increase the number of purchased items per customer,
we rolled out a monthly promotional “Lawson Tokuichi!” campaign, where a 10% discount was offered on“Lawson Select” chilled/frozen foods as well as some items offered in the counter cases. Furthermore, measures
to effectively attract customers were launched, including a “speed lottery” themed on “HiGH&LOW THE
MOVIE 2&3,” which demonstrated our strength in the entertainment field.
*1 Bran: The external layer of wheat. It contains abundant nutrition including dietary fiber, iron, calcium,magnesium, zinc, and copper. The food is noted for its low level of carbohydrates.
*2 Gift Cards: Collective term for prepaid cards that can be used for online transactions.
[Breakdown of Sales by Merchandise Category at Chain Stores in Domestic Convenience Store Business]
Fiscal period

Product categories
Processed foods

Previous 1st Half
From March 1, 2016
to August 31, 2016
Net sales
Percentage of(Millions of yen)
total (%)
541,286
52.6

Current 1st Half
From March 1, 2017
to August 31, 2017
Net sales
Percentage of(Millions of yen)
total (%)
575,867
52.7

Fast foods

241,686

23.5

257,237

23.5

Daily delivered foods

148,918

14.5

161,151

14.8

Non-food products

96,735

9.4

98,0109.0

1,028,626

100.0

1,092,266

100.0

Total

(Note) These figures include stores operated by both Lawson, Inc. and Lawson Sanin, Inc. as well as
LAWSON THREE F and LAWSON POPLAR brand stores.
[Store Development]
In opening new stores, the Group continued to focus on developing profitable stores.
Regarding the entire Lawson Group, the total number of LAWSON, NATURAL LAWSON, and LAWSONSTORE100 stores opened and closed during the first half of the current fiscal year stood at 493 and 154 stores,
respectively, with the total number of stores in Japan reaching 13,450 as of the end of August 2017. *3
With regard to our partnership initiatives with other chain retailers in Japan, based on business integrationagreements, we are remodeling THREE F stores operated by Three F Co., Ltd. into LAWSON THREE F stores,
and SAVE ON stores operated by Save On Corp. into LAWSON stores.
In June 2017, Lawson, Inc. subscribed to new shares in POPLAR Co., Ltd. through a third-party allotment,
3expanding its shareholder voting rights in POPLAR to 18.27%. Its business alliance with the company will also
be further strengthened. With regard to LAWSON THREE F stores, we opened the first LAWSON THREE F
store in Kanagawa Prefecture at the Yokohama City Office in August 2017. By the end of August 2017, 6 storesin Kanagawa Prefecture, as well as one each in Tokyo and Chiba Prefecture, were remodeled into LAWSON
THREE F stores. The remodeling of THREE F stores into LAWSON THREE F stores will be largely completed
by the end of the current fiscal year, ending February 2018. Meanwhile, a total of 45 SAVE ON stores in
Saitama Prefecture were remodeled into LAWSON stores in phases from June to the end of August 2017, withmore SAVE ON stores planned to be remodeled in Chiba and Tochigi Prefectures. The remodeling of SAVE
ON stores into LAWSON stores will be completed by the end of the next fiscal year, ending February 2019.
Furthermore, in July 2017, Lawson, Inc. became the operator of stores located at Nagoya Municipal Subway
stations, and opened 8 LAWSON stores simultaneously at certain stations.
Furthermore, by building partnerships with dispensing pharmacy and drug store chains, we offer not only
OTC pharmaceuticals, cosmetics, and daily necessities, but also offer a more numerous assortment ofmerchandise than conventional LAWSON stores. The number of stores offering non-prescription drugs hasreached 161 stores (includes 45 pharmacy LAWSON stores equipped with drug-dispensing pharmacies) as ofthe end of August 2017. Furthermore, the number of stores offering nursing care consultation services hasreached 10 as of the end of August 2017. We will continue to engage in establishing convenience store models
that address and deal with social changes such as the aging population and increased health awareness.
With respect to LAWSON STORE100, we will continue to increase the product composition ratio of 100yen items (excluding tax) by scaling down product portions to respond to customer needs for value.
*3 The numbers of store openings and closings and total number of stores in Japan include stores operatedby Lawson, Inc., Lawson Sanin, Inc. and three equity-method affiliates, Lawson Kochi, Inc., Lawson
Minamikyushu, Inc. and Lawson Okinawa, Inc. as well as LAWSON THREE F and LAWSON POPLAR
brand stores.

[Change in the Total Number of Domestic Stores]
Total stores as ofFebruary 28, 2017

Change during
period12,172339

12,511

NATURAL LAWSON

141

3

144

LAWSON STORE100

798

(3)

795

13,111

339

13,450LAWSON

Total

Total stores as ofAugust 31, 2017

(Note) These figures include stores operated by Lawson, Inc., subsidiary Lawson Sanin, Inc. and equitymethod affiliates, Lawson Kochi, Inc., Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.

4

[Number of LAWSON stores by prefecture (As of August 31, 2017)]
Prefecture

Numberof stores

Hokkaido654

Ibaraki

203

Kyoto

338

Ehime

218

Aomori

239

Tokyo

1,607

Shiga

154

Tokushima

133

Akita

189

Kanagawa

901

Nara

135

Kochi

136

Iwate

168

Shizuoka

261

Wakayama

138

Fukuoka483

Miyagi

230

Yamanashi

125

Osaka

1,105

Saga

69

Yamagata

106

Nagano

175

Hyogo

667

Nagasaki

106

Fukushima

137

Aichi

655

Okayama

178

Oita

179

Niigata

154

Gifu

171

Hiroshima

205

Kumamoto

150

Tochigi

158

Mie

138

Yamaguchi

118

Miyazaki

104

Gunma

118

Ishikawa

102

Tottori140

Kagoshima

194

Saitama658

Toyama188

Shimane149

Okinawa

218

Chiba

552

Fukui

112

Kagawa132

Total(domestic)

13,450Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores(Note) These figures include stores operated by Lawson, Inc., subsidiary Lawson Sanin, Inc. and equitymethod affiliates, Lawson Kochi, Inc., Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.
[Other]We will strive to enhance customer convenience by additionally partnering with other companies to establish
an “Open Platform” based on the networks of LAWSON stores that offer a range of services encompassingordering, collection, and home delivery.
Led by the Japanese Ministry of Economy, Trade and Industry, Lawson, Inc. and other domestic convenience
store operators jointly issued the Declaration of Plan to Introduce 100 Billion Electronic Tags for Products inConvenience Stores. By using electronic tags, we aim to enhance store operating efficiency and continue torespond quickly to changing customer expectations.
As a result, Domestic Convenience Store Business posted gross operating revenue of 225,375 million yen (up5.7% from previous fiscal year) and segment profit of 32,781 million yen (down 1.6% from previous fiscal year).
(Seijo Ishii Business)
The number of directly operated Seijo Ishii high-end supermarket chain stores offering quality foods reached
137 as of the end of August 2017, and sales were also strong. In June 2017, we opened the S-PAL Sendai store as
the first Seijo Ishii store in the Tohoku region, which successfully attracted many customers. We will continue
increasing locations such as this, where Seijo Ishii’s array of premium quality products can be conveniently
purchased. Furthermore, we remain committed to enhancing the brand image and corporate value of SEIJO ISHII
Co., Ltd., which has marked its 90th anniversary, while absorbing the company’s product development expertise,know-how acquired as a manufacturing retailer, and sales methods, to strengthen our domestic convenience store
business.

5

As a result, Seijo Ishii Business posted gross operating revenue of 38,933 million yen (up 7.9% from previous
fiscal year) and segment profit of 3,032 million yen (up 3.1% from previous fiscal year).
(Entertainment-related Business)
With regards to our entertainment-related business, Lawson HMV Entertainment, Inc., which forms the core of
the business, continued to secure top-class ticket transaction value in the ticketing industry. HMV, which sells
music CDs and DVDs, also operates the HMV Record Shop specializing in second-hand analog records and CDs.
Including the HMV Record Shop, the number of HMV stores totaled 54 as of the end of August 2017. We will
strive to offer an even wider selection of products and services to better respond to customer needs by, for example,
expanding the scope of our entertainment business. As of the end of August 2017, United Cinemas Co., Ltd.
operates cinemas at 39 sites, offering 353 screens nationwide including those operated on commission. In July
2017, Japan’s first ScreenX, a triple-screen film projection system, was introduced at the United Cinemas Aqua
City Odaiba. By projecting images not only on the front screen, but also on screens on both side walls, ScreenX
provides a 270-degree view, offering the audience an immersive movie experience.
As a result, Entertainment-related Business posted gross operating revenue of 39,379 million yen (up 10.2%
from previous fiscal year) and segment profit of 2,464 million yen (up 9.2% from previous fiscal year).
(Other Business)
In addition to the aforementioned businesses, the Group is also involved in the Overseas Business and the
Financial Services-related 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, after being the first Japanese convenience store operator to advance into
Shanghai, we made inroads into Chongqing, Dalian, Beijing, and Wuhan. The number of LAWSON stores in the
country is increasing steadily, reaching 1,216 as of the end of August 2017, including 5 stores opened
simultaneously in Nanjing City, Jiangsu Province in August 2017.

6

[Distribution of LAWSON Brand Stores Overseas by Region]

Country/Region

Number of stores

Change during

Number of stores(As of February 28,

period(As of August 31,

2017)

2017)

China Shanghai and surrounding area

665

115

780

China Chongqing

136

9

145

China Dalian

82

14

96

China Beijing

48

13

61

China Wuhan

72

62

134

Thailand

85

7

92

Indonesia

36

1

37

Philippines

30

2

32

United States of America Hawaii

2

－

2

1,156

223

1,379

Total

Lawson ATM Networks, Inc., which operates a Financial Services-related Business, continued contributing
to consolidated results owing to an increase in the number of ATMs installed. We strengthened partnerships
with new financial institutions bringing the total number of our financial institution partners to 89 nationwide(up 2 from previous fiscal year), including online banks, and the number of ATMs installed nationwide to
12,172 (up 260 from previous fiscal year) as of the end of August 2017.
As a result, Other Business posted gross operating revenue of 29,706 million yen (up 20.1% from previous
fiscal year) and segment profit of 642 million yen (down 54.5% from previous fiscal year).
Through Lawson Bank Preparatory Company, Inc. established in November 2016, we are continuing to workon establishing a bank by leveraging Lawson’s past experience in financial services. We are proceeding on theassumption that approval from the relevant authorities will be obtained.

7

(2) Explanation Regarding Consolidated Financial Position① Assets, liabilities and net assets at the end of the first half of fiscal year 2017
Current assets increased by 20,577 million yen from the end of the previous fiscal year to 269,855 million
yen, mainly reflecting an increase of 11,907 million yen in accounts receivable-other and an increase of 7,975
million yen in cash and deposits. Non-current assets increased by 31,442 million yen from the end of theprevious fiscal year to 648,741 million yen, mainly reflecting an increase of 14,305 million yen in property
and store equipment. Consequently, total assets increased by 52,019 million yen from the end of the previous
fiscal year to 918,597 million yen.
Current liabilities increased by 42,370 million yen from the end of the previous fiscal year to 399,154
million yen, mainly reflecting an increase of 33,436 million yen in deposits received. Non-current liabilities
increased by 5,846 million yen from the end of the previous fiscal year to 229,645 million yen, mainlyreflecting an increase of 5,352 million yen in lease obligations. Consequently, total liabilities increased by
48,217 million yen from the end of the previous fiscal year to 628,799 million yen.
Net assets increased by 3,801 million yen from the end of the previous fiscal year to 289,797 million yen,mainly reflecting an increase of 10,578 million yen in retained earnings. Consequently, shareholders’ equity
ratio was 30.9%, down from 31.7% as of the end of the previous fiscal year.
② Cash flows during the first half of fiscal year 2017
Cash and cash equivalents at August 31, 2017 increased by 8,394 million yen from the end of the previous
fiscal year to 76,086 million yen.
Net cash provided by operating activities was 119,144 million yen, an increase of 27,671 million yen fromthe corresponding period of the previous fiscal year, mainly due to an increase in deposits received.
Net cash used in investing activities was (44,439) million yen, an increase of (15,448) million yen fromthe corresponding period of the previous fiscal year, mainly due to an increase in payments for transfer ofbusiness.
Net cash used in financing activities was (67,007) million yen, an increase of (39,248) million yen fromthe corresponding period of the previous fiscal year, mainly due to a decrease in short-term loans payable.
(3) Explanation Regarding Forward-looking Statements
We have amended the gross operating revenue forecast for the 2017 fiscal year.
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 from those expressed or implied in the forecasts due to changes in various factors.

8

2. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheet
As of February 28, 2017 and August 31, 2017
(Millions of yen)

AssetsCurrent assets:
Cash and deposits
Accounts receivable-due from franchised stores
Lease receivables
Merchandise
Accounts receivable-other
Deferred tax assets
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

9Previous fiscal year
As of
February 28, 2017

Current 1st Half
As of
August 31, 2017

68,11539,982
12,33618,13078,363
3,907
28,493(50)
249,278

76,09038,142
12,17618,80390,271
3,630
30,773(33)
269,855

183,747
18,581
110,472
11,708324,510

189,759
18,037
118,488
12,531
338,816

37,56746,041
10,691499
94,80042,43944,383
10,382
7,215
104,42144,495
95,594
23,13835,728(968)
197,988617,299
866,577

45,48197,803
21,61041,626(1,018)205,504
648,741
918,597(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

10Previous fiscal year
As of
February 28, 2017

Current 1st Half
As of
August 31, 2017

110,834
31,180575
28,012
59,734
9,876
103,156
3,427
9,985
356,783

136,424
1,420
575
30,24465,632
12,247
136,593
3,728
12,288399,154

56,70399,983957

56,131
105,336
1,708

332

328

13,083
26,95825,779223,798
580,581

13,453
27,79424,893229,645628,799

58,50649,083
165,162(1,210)271,541

58,506
46,689
175,740(1,040)279,896

274
(618)
4,610
(927)
3,338
314
10,800285,995
866,577

1,163
(618)
4,225
(851)
3,918
197
5,785
289,797
918,597

(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, 2017 and the first half of the fiscal year ending February
28, 2018(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
methodOther
Total non-operating income
Non-operating expenses:
Interest expenses
Loss on cancellation of leases
Loss on disaster
Other
Total non-operating expenses
Ordinary income
Extraordinary income:Gain on sales of shares of subsidiaries and associates
Total extraordinary income
Extraordinary losses:
Loss on sales of non-current assets
Loss on retirement of non-current assets
Impairment loss
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

11

Previous 1st Half
From March 1, 2016
to August 31, 2016
306,231
116,997
80,03436,962Current 1st Half
From March 1, 2017
to August 31, 2017
329,402
131,033
90,07740,956

139,42249,811
189,234
226,196
186,270
39,925147,248
51,120198,369
239,325
200,380
38,945

365

352

391

431

1,148
1,905

1,103
1,887

961
722
723
1,039
3,447
38,384

959
660
－
755
2,376
38,456

－
－

302
302

99
1,928
522
2,551
35,832
9,399
3,387
12,78623,045437
22,608

149
1,293
668
2,111
36,648
10,581
2,157
12,73923,908263
23,644

Consolidated Statement of Comprehensive Income
For the first half of the fiscal year ended February 28, 2017 and the first half of the fiscal year ending February
28, 2018(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

12

Previous 1st Half
From March 1, 2016
to August 31, 2016
23,045Current 1st Half
From March 1, 2017
to August 31, 2017
23,908(780)(1,513)34(2,260)20,785

888
(373)
76
592
24,50020,455329

24,224276

(3) Consolidated Statement of Cash Flows
For the first half of the fiscal year ended February 28, 2017 and the first half of the fiscal year ending February
28, 2018(Millions of yen)Previous 1st Half
From March 1, 2016
to August 31, 2016
Net cash provided by (used in) operating activities:
Profit before income taxes
Depreciation and amortization
Impairment loss
Interest income
Interest expenses
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
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 property and store equipment
Purchase of intangible assets
Purchase of long-term prepaid expenses
Payments for transfer of business
Other
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities:
Net increase (decrease) in short-term loans payable
Repayments of lease obligations
Cash dividends paid
Payments from changes in ownership interests in subsidiaries that do
not result in change in scope of consolidation
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 (decrease) in cash and cash equivalents resulting fromchange of scope of consolidation
Cash and cash equivalents at end of period

13

Current 1st Half
From March 1, 2017
to August 31, 201735,832
26,971
522
(365)
961
1,928
(3,655)(19,360)
21,596
6,134
22,428409
6,037
99,441367(966)(7,368)91,47336,64827,911
668
(352)
959
1,293
1,818
(11,974)
25,692
5,471
33,434369
5,840
127,780355(960)(8,031)
119,144(16,139)(7,295)(2,528)(343)(2,684)(28,991)(17,801)(8,635)(7,362)(6,692)(3,947)(44,439)(240)(14,698)(12,249)(30,047)(16,365)(12,501)－(7,799)(570)(27,758)(836)
33,887
69,793(293)(67,007)(67)
7,629
67,692335

765

104,016

76,086

(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)
The Company and its domestic consolidated subsidiaries are applying “Implementation Guidance on
Recoverability of Deferred Tax Assets” (Accounting Standards Board of Japan (ASBJ) Guidance No. 26,
revised March 28, 2016) from the first quarter of the fiscal year ending February 28, 2018.

14