Flash Report on the Consolidated Financial Results
for the First Quarter of the Fiscal Year Ending February 28, 2021
July 9, 2020
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: July 13, 2020
Scheduled date for payment of dividend: －Supplementary materials for quarterly financial results: Yes
Holding of presentation of quarterly results: None
(Amounts less than one million yen are truncated)
1. Consolidated operating results for the first quarter ended May 31, 2020 (from March 1, 2020 to May 31, 2020)(1) Consolidated operating results (cumulative)
Note: Percentages represent increases (decreases) compared with the corresponding period of the previous fiscal
year.

For the first quarter ended

Gross operating
revenue
Millions%of yen155,360 (13.1)
178,800
4.9

May 31, 2020
May 31, 2019
Note: Comprehensive income:Operating income

Ordinary income

Millionsof yen2,623
14,247

Millionsof yen1,208
13,399%(81.6)
12.4

For the first quarter ended May 31, 2020
For the first quarter ended May 31, 2019%
(91.0)
11.1(1,787) million yen
6,936 million yen

Profit per share

Diluted profit per share

Yen(41.82)
71.80

Yen
－
71.77

For the first quarter ended
May 31, 2020
May 31, 2019

Profit attributable toowners of parent
Millions%of yen(4,185)
－
7,184
16.5
－%
9.5%

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Millions of yen

Shareholders’ equity
ratio%

May 31, 2020

1,469,937

265,767

17.8

February 29, 2020

1,357,732

275,347

20.0

As of

Reference: Shareholders’ equity:
As of May 31, 2020
As of February 29, 2020

261,451 million yen
270,877 million yen

2. Dividends
1Q
Yen
2019 fiscal year－

2020 fiscal year－

2020 fiscal year (forecast)

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

Total
Yen
150.0075.00

150.00－75.00

Note: Revision of the most recent dividends forecast: Yes
Note: For details of the revision of the dividends forecast, please refer to “Notice of the Consolidated Financial
Results Forecast for the Fiscal Year Ending February 28, 2021,” announced on July 9, 2020.

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: Yes
Note: For details of the revision of the consolidated operating results forecast, please refer to “Notice of theConsolidated Financial Results Forecast for the Fiscal Year Ending February 28, 2021,” announced on
July 9, 2020.
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 May 31, 2020:
100,300,000
As of February 29, 2020:
2. Number of treasury shares at the end of period
As of May 31, 2020:
237,795

As of February 29, 2020:

3. Average number of shares during the period (cumulative three months)
As of May 31, 2020:
100,062,205
As of May 31, 2019:100,300,000

237,762
100,058,804

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) Notes to Consolidated Financial Statements ························································································

13(Going Concern Assumption) ·············································································································

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

13(Additional Information) ····················································································································

131

1．Qualitative Information Regarding Quarterly Financial Results(1) Explanation Regarding Consolidated Operating Results
During the first quarter of fiscal 2020, three months from March 1 to May 31, 2020, the novel coronavirus
disease (COVID-19) spread across the world. In Japan, a state of emergency was declared from April to May,
exerting immense pressure on the nation’s economic and social activities and the daily lives of the public,
with businesses closing and people staying at home in response to requests from the government. The
epidemic also had a considerable effect on the trends in customer visits and buying patterns, significantly
reducing the net sales of the Lawson Group.
As a result, for the first quarter of fiscal 2020 on a consolidated basis, gross operating revenue decreased
to 155,360 million yen (down 13.1% from previous fiscal year), operating income decreased to 2,623 million
yen (down 81.6% from previous fiscal year) and ordinary income decreased to 1,208 million yen (down
91.0% from previous fiscal year). Loss attributable to owners of parent was 4,185 million yen (Profit
attributable to owners of parent was 7,184 million yen in 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 applied from the first quarter of fiscal 2020 and that thecomparison and analysis of figures for the three months from March 1 to May 31, 2020 were based on the
new reportable segments.
(Domestic Convenience Store Business)
Owing to the prevalence of remote working and reduced opportunities to go out amid the spread of COVID19, the number of customers and sales decreased significantly at LAWSON stores. In contrast, sales increased
at LAWSON STORE100 stores as a result of rising demand stemming from consumers’ desire to protect their
daily lives and use the stores as alternatives to supermarkets.
As precautionary store measures against COVID-19, we installed transparent plastic barriers at cash
registers; ensured social distancing; encouraged customers to visit our stores during less crowded hours; andmade sure employees practiced rigorous hand washing and gargling, disinfected their hands with alcohol-based
disinfectant, and wore face masks.
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

2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 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.
Lawson Sanin, Inc., a wholly-owned subsidiary of Lawson, Inc., was merged into Lawson, Inc. effective
March 1, 2020.

[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. During the current fiscal year, we aretaking decisive steps to improve store operations and strengthen franchise support by headquarters.
In May 2020, we revamped our Lawson app to further enhance customer convenience. In addition, in May
2020 we expanded the scope of stores offering the Uber Eats food delivery service to include some stores in 10
prefectures across the nation. Lawson started offering the delivery service in August 2019, initially within
Tokyo.

[Merchandising and Service Strategies]
Although net sales decreased significantly owing to a decline in the number of customers, sales of daily
delivered foods, frozen foods, and seasonings, among others, increased as a result of more people cooking at
home instead of dining out.
In the rice range, in April 2020 we launched three new products using some unique ingredients in our“Kinshari Onigiri Rice Ball” series— “Sauce-grilled Nodoguro (rockfish),” “Mayonnaise-flavored albacoretuna,” and “Aromatic Kelp and Sea Bream”—which were hugely popular.
In the counter fast food range, “GU-BO,” a new hot snack range that can be enjoyed in a variety of ways,
was in high demand.
In our dessert range, we released “novel dessert” products with differentiated texture, appearance andingredients, “PARITORO Brulee” and “FUWASHUWA Souffle,” which were tremendously well received,
resulting in Lawson’s desserts garnering considerable attention.
Furthermore, we welcomed Nendo Inc., a design company, as our partner to rebrand the logo and packaging
for our private brand products. Based on the philosophy of promoting a fulfilling daily life at home, our Lawson
Select brand has been redesigned into two brands, “L basic” and “L marche.”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 May 31, 2019
Sales
Percentage(Millions of yen)of total (%)
312,014
53.2

Current fiscal year
From March 1, 2020
to May 31, 2020
Sales
Percentage(Millions of yen) of total (%)
285,751
54.1

Fast foods

136,065

23.2

111,721

21.1

Daily delivered foods

87,72214.9

85,904

16.3

Nonfood products

50,785

8.7

44,8198.5

586,587

100.0

528,197

100.0

Total

[Store Development]
In opening new stores, the Group continued to focus on developing profitable stores.
During the first quarter under review, the total number of LAWSON, NATURAL LAWSON and LAWSONSTORE100 stores opened in Japan stood at 129 stores. Meanwhile, we closed a total of 104 such stores in the
country as a result of shutting down stores with low earnings and for other reasons. As of the end of May
2020, the total number of domestic stores was 14,469.*
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 233 stores (includes 50 pharmacy LAWSON stores equipped withdrug-dispensing pharmacies) as of the end of May 2020. Moreover, the number of stores offering nursing careconsultation services has reached 24 as of the end of May 2020. Furthermore, we have also been expanding ourchain of “in-hospital LAWSON stores,” which feature strengthened focus on medical, sanitary, nursing andrehabilitation supplies in addition to merchandise and services offered at standard convenience stores. The
number of such stores has reached 330 as of the end of May 2020. Building on our expertise developed throughoperation of in-hospital LAWSON stores, we will continue to support the lives of all people interacting withhospitals.
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 meets customers’ needs with a wide-ranging assortment of products sold at the value-for-money
price of 100 yen, including fresh fruit and vegetables, daily delivered fresh foods, prepared dishes, beverages,
and daily necessities. As of the end of May 2020, we operate 145 NATURAL LAWSON stores and 693
LAWSON STORE100 stores.
* The numbers of store openings and closings and total number of stores in Japan include stores operatedby Lawson, Inc. and three equity-method affiliates, Lawson Kochi, Inc., Lawson Minamikyushu, Inc.
and Lawson Okinawa, Inc.

4

[Change in the Total Number of Domestic Stores]
Total stores as ofFebruary 29, 2020

Change during
periodTotal stores as of
May 31, 2020

13,55774

13,631

NATURAL LAWSON

145

－

145

LAWSON STORE100

742

(49)

693

14,44425

14,469LAWSON

Total[Number of LAWSON stores by prefecture (As of May 31, 2020)]
Prefecture

Numberof stores

Hokkaido

675

Ibaraki

224

Kyoto

325

Ehime

213

Aomori

271

Tokyo

1,699

Shiga

155

Tokushima

136

Akita

184

Kanagawa

1,087

Nara

139

Kochi

139

Iwate

178

Shizuoka

285

Wakayama

149

Fukuoka516

Miyagi254

Yamanashi

136

Osaka

1,117

Saga

74

Yamagata

114

Nagano

173

Hyogo

665

Nagasaki

112

Fukushima

164

Aichi

726

Okayama

206

Oita

191

Niigata

224

Gifu

182

Hiroshima

242

Kumamoto

160

Tochigi

201

Mie

138

Yamaguchi

117

Miyazaki

107

Gunma

244

Ishikawa

104

Tottori

139

Kagoshima

197

Saitama687

Toyama185

Shimane145

Okinawa

242

Chiba

605

Fukui

110

Kagawa133

Total(domestic)

14,469Prefecture

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]When Japan closed all schools across Japan to prevent the spread of COVID-19, we distributed 584,983 freerice balls to 307,332 children at 7,163 after-school childcare centers. In addition, LAWSON stores supported
children at home by offering free printouts of coloring sheets and rolling out a stamp rally event.
During the state of emergency, we supported producers nationwide affected by COVID-19 by jointly
developing products with them and linking them to consumers through our stores.
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 provide support for stores facing
considerable sales declines due to the spread of COVID-19, restrictions on operating hours or temporary closures.
Our aim is to further improve the profits generated by franchise stores and strengthen our partnerships with them.

As a result, Domestic Convenience Store Business posted gross operating revenue of 102,781 million yen
5(down 12.7% from previous fiscal year) and segment profit of 2,187 million yen (down 80.3% 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 159 as of theend of May 2020. Amid the spread of COVID-19, we closed some Seijo Ishii stores, such as those located at train
and subway stations or shortened their opening hours. However, on the back of heightened demand for the storesas alternatives to general supermarkets, demand for perishables including fruits and vegetables, meat and fishgrew markedly, resulting in strong overall sales. 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 25,123 million yen (up 8.0% from previous
fiscal year) and segment profit of 2,616 million yen (up 14.1% 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. Among our HMV stores dedicated to selling music and video software
nationwide, as well as HMV&BOOKS, which markets books, CDs, and DVDs, and HMV record shop storesspecializing in analog records, while we closed some stores or shortened their opening hours, from June 3, 2020,
all the stores are in operation.
United Cinemas Co., Ltd., an operator of cinema complexes, temporarily closed all its cinema theaters after thestate of emergency was declared. Following the lifting of the declaration, the theaters resumed operation in phases,
and as of June 1, 2020, all 43 sites nationwide offering 389 screens including those operated on commission are
in operation.

As a result, Entertainment-related Business posted gross operating revenue of 11,245 million yen (down 46.4%
from previous fiscal year) and segment loss of 961 million yen (segment profit was 1,812 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 May 2020, the number of ATMs installed nationwide reached 13,423 (up 70 from previous
fiscal year), with each ATM used 38.4 times a day on average, decreasing as a result of the decline in the numberof customers visiting LAWSON stores due to the spread of COVID-19. The total number of our financial

6

institution partners was 124 nationwide (the same as previous fiscal year), including online banks.
Lawson Bank, Inc. issues LAWSON Ponta Plus credit cards, which allow cardholders to collect extra Ponta
points when used at LAWSON, NATURAL LAWSON, or LAWSON STORE100 stores. By rolling out a rangeof promotional campaigns and strengthening promotional efforts at stores, we are steadily expanding credit card
membership.
As a result, Financial Services Business posted gross operating revenue of 7,668 million yen (down 9.1% fromprevious fiscal year) and segment profit of 27 million yen (down 94.8% from previous fiscal year).
(Overseas Business)
With regards to Overseas Business, the Group’s operating companies opened LAWSON stores in the People’s
Republic of China, Thailand, Indonesia, the Philippines, and the United States of America (Hawaii).
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. The number of LAWSON stores in the entire
country reached 2,634 as of the end of May 2020.
In response to the spread of COVID-19, we closed some stores or shortened their opening hours overseas, but
the impact on the consolidated operating results for the Overseas Business during the first quarter under review isimmaterial.

[Distribution of LAWSON Brand Stores Overseas by Region]
Country/Region

Number of stores(As of February 29,
2020)

Changeduring fiscal
year

Number of stores(As of May 31,
2020)

1,574

(55)

1,519

China

Shanghai and surrounding area

China

Chongqing

235

12

247

China

Dalian

192

16

208

China

Beijing and surrounding area

153

6

159

China

Shenyang

26

7

33

China

Wuhan

401

(10)

391

China

Hefei

50

6

56

China

Changsha

15

6

21

Thailand

133

(1)

132

Indonesia

72

―

72

Philippines

65

―

65

2

―

2

2,918

(13)

2,905

United States of America

HawaiiTotal

As a result, Overseas Business posted gross operating revenue of 11,018 million yen (up 2.2% from previous
fiscal year) and segment loss of 1,142 million yen (down 23.7% from previous fiscal year).

7(2) Explanation Regarding Consolidated Financial Position
Current assets increased by 119,762, million yen from the end of the previous fiscal year to 756,460 million
yen, mainly reflecting an increase of 131,601 million yen in cash and deposits. Non-current assets decreased
by 7,558 million yen from the end of the previous fiscal year to 713,476 million yen, mainly reflecting
decreases of 6,144 million yen in property and store equipment. Consequently, total assets increased by
112,204 million yen from the end of the previous fiscal year to 1,469,937 million yen.
Current liabilities increased by 127,194 million yen from the end of the previous fiscal year to 689,158
million yen, mainly reflecting an increase of 68,162 million yen in deposits received, and an increase of
58,653 million yen in current liabilities-other due to movement of call money. Non-current liabilities
decreased by 5,410 million yen from the end of the previous fiscal year to 515,011 million yen, mainlyreflecting a decrease of 5,310 million yen in lease obligations. Consequently, total liabilities increased by
121,783 million yen from the end of the previous fiscal year to 1,204,169 million yen.
Net assets decreased by 9,579 million yen from the end of the previous fiscal year to 265,767 million yen,mainly reflecting a decrease of 11,952 million yen in retained earnings. Consequently, shareholders’ equity
ratio was 17.8%, down from 20.0% as of the end of the previous fiscal year.

(3) Explanation Regarding Forward-looking Statements
As it had been difficult to make a reasonable projection of the effect of the novel coronavirus spread, theforecast of the Group’s consolidated financial performance was undetermined. Since the state of emergency
was lifted and economic activity is resuming, we have determined a forecast based on information currently
available.
For details of the forecast, please refer to “Notice of the Consolidated Financial Results Forecast for the
Fiscal Year Ending February 28, 2021,” announced on July 9, 2020.

8

2. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheet
As of February 29, 2020 and May 31, 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

9Previous fiscal year
As of
February 29, 2020

Current 1st Quarter
As of
May 31, 2020

343,587
47,366
17,876
20,985
159,12247,802(42)636,697475,188
45,72417,50521,099160,992
35,980(31)
756,460

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

201,246
19,200142,444
23,901
386,793

45,151
42,381
8,849
680
97,06343,962
41,283
8,694
693
94,632

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

42,643
105,389
32,902
51,715(600)
232,050
713,476
1,469,937

(Millions of yen)

Liabilities
Current liabilities:
Accounts payable-trade
Short-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 29, 2020

Current 1st Quarter
As of
May 31, 2020

129,397
39,85045,61094,848
7,915
193,096
4,667
46,577561,963

122,393
61,75044,76888,592
1,990
261,258
3,174
105,230
689,158

310,000
136,665521

310,000
131,355
512

282

253

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

16,38235,44521,061
515,0111,204,169

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

58,50644,605
153,128(1,011)
255,228

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

4,215
(207)
3,104
(889)
6,222
255
4,060
265,767
1,469,937

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)For the first quarter of the fiscal year ended February 29, 2020 and the first 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
methodCompensation income
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Loss on cancellation of leases
Other
Total non-operating expenses
Ordinary income
Extraordinary losses:
Loss on retirement of non-current assets
Impairment loss
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

11

Previous 1st Quarter
From March 1, 2019
to May 31, 2019
178,800
74,28150,27624,005Current 1st Quarter
From March 1, 2020
to May 31, 2020
155,360
62,708
43,116
19,592

77,58426,934
104,518
128,523
114,276
14,247

69,821
22,83092,652112,244
109,620
2,623

159

163

239

97

132
294
826

201
197
660

971
393
309
1,674
13,399

998
907
169
2,075
1,208

1,021
650
－
183
1,855
11,543
3,366
1,027
4,393
7,150
(34)
7,184

1,278
880
2,258
233
4,650
(3,441)572
246
819(4,260)(75)(4,185)

(Consolidated Statement of Comprehensive Income)For the first quarter of the fiscal year ended February 29, 2020 and the first 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

12

Previous 1st Quarter
From March 1, 2019
to May 31, 2019
7,150

Current 1st Quarter
From March 1, 2020
to May 31, 2020
(4,260)

(485)
218
53
(213)
6,936

2,718
(290)
45
2,472
(1,787)

6,955
(19)

(1,658)(129)

(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.

13