Flash Report on the Consolidated Financial Results
for the First Half of the Fiscal Year Ending February 29, 2020
October 9, 2019
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: October 11, 2019
Scheduled date for payment of dividend: November 8, 2019
Supplementary materials for quarterly financial results: Yes
Holding of presentation of quarterly results: Yes(Amounts less than one million yen are truncated)
1. Consolidated operating results for the first half ended August 31, 2019 (from March 1, 2019 to August 31,
2019)(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, 2019
August 31, 2018
Note: Comprehensive income:Gross operating
revenue

Operating income

Ordinary income

Millionsof yen369,131351,973

Millionsof yen36,763
34,485

Millionsof yen35,14733,536

%
4.9
6.9

%
6.6
(11.5)For the first half ended August 31, 2019
For the first half ended August 31, 2018
For the first half ended
August 31, 2019
August 31, 2018%
4.8
(12.8)

Profitattributable toowners of parent
Millions%of yen20,10712.1
17,942 (24.1)

18,687 million yen
19,223 million yen

Profit per share

Diluted profit per share

Yen
200.95179.32

Yen
200.83179.23(2.8)%(21.5)%(2) Consolidated financial position

Millions of yen

Millions of yen

Shareholders’ equity
ratio%

August 31, 2019

1,400,535

283,950

20.0

February 28, 2019

1,342,329

281,982

20.6

As of

Total assets

Net assets

Reference: Shareholders’ equity:
As of August 31, 2019279,521 million yen
As of February 28, 2019276,514 million yen
Note: Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Statement No. 28;
February 16, 2018), etc. have been applied from the beginning of the first quarter of the fiscal year ending
February 29, 2020 in preparing the consolidated financial statements. The standards have been retrospectively
applied to the consolidated financial statements for the previous fiscal year.

2. Dividends

2018 fiscal year－

Annual dividends per share
1H
3Q
Year-end
Yen
Yen
Yen
127.50－127.502019 fiscal year

－

75.00

1Q
Yen

2019 fiscal year (forecast)

－

75.00

Total
Yen
255.00150.00Note: Revision of the most recent dividends forecast: None
3. Forecast of consolidated operating results for the 2019 fiscal year ending February 29, 2020 (from March 1,
2019 to February 29, 2020)
Note: Percentages represent increases (decreases) compared with the corresponding period of the previous fiscal
year.
Gross operating
Profit attributable Profit per
Operating income Ordinary income
revenueto owners of parent share
Millions
Millions
Millions
Millions
%
%
%
%
Yen
of yenof yenof yenof yen2019 fiscal year
727,000
3.8
60,8000.0 54,500(5.5) 18,000(29.6) 179.88
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: Yes
2. Changes in accounting policies other than 1. above: None
3. Changes in accounting estimates: None
4. Retrospective restatements: None
Note: For changes in accounting policies associated with revision in accounting standards, please refer to “2.
Consolidated Financial Statements and Main Notes, (4) Notes to Consolidated Financial Statements(Changes in Accounting Policies)” on page 14.
(4) Number of shares outstanding (common stock)
1. Number of shares outstanding at the end of period (including treasury shares)
As of August 31, 2019:100,300,000
As of February 28, 2019:
2. Number of treasury shares at the end of period
As of August 31, 2019:237,597

100,300,000

As of February 28, 2019:

241,897

3. Average number of shares during the period (cumulative six months)
As of August 31, 2019:
100,060,603
As of August 31, 2018:

100,056,667

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(Changes in Accounting Policies)········································································································

141(Additional Information) ···························································································

141

1．Qualitative Information Regarding Quarterly Financial Results(1) Explanation Regarding Consolidated Operating Results
During the first half of fiscal 2019, six months from March 1 to August 31, 2019, changes in society needs
resulting from an aging population, the prevalence of the nuclear family, the increasing number of working
women, and the heightening awareness of healthy lifestyles, are serving as a tailwind for the convenience store
industry. Meanwhile, competition is intensifying across sector lines and circumstances surrounding franchise
stores are also becoming increasingly challenging due to a labor shortage and rising personnel expenses. Givensuch a business environment, we have made efforts to raise store productivity by making maximum use ofdigital technology. Specifically, a few years ago we started introducing a semi-automatic ordering system andnew point-of-sale (POS) cash registers equipped with an automatic change dispenser function. We will continue
to provide franchise stores with stronger support and reinforce our relationships with them.
As a result, for the first half of fiscal 2019 on a consolidated basis, gross operating revenue increased to369,131 million yen (up 4.9% from previous fiscal year), operating income increased to 36,763 million yen (up6.6% from previous fiscal year) and ordinary income increased to 35,147 million yen (up 4.8% from previous
fiscal year). Profit attributable to owners of parent increased to 20,107 million yen (up 12.1% from previous
fiscal year).
Furthermore, we also focused on promoting internal control and addressing operating risks across the entire
Group based on the 2019 Basic Policy for Improvement of Internal Control Systems. We will continue promotinginternal control even more.
Operating results by business segment were as follows:(Domestic Convenience Store Business)
In our convenience store business, we are striving to establish LAWSON stores as convenience stores
endorsed by all our customers. To this end, we are implementing measures to achieve our three commitments,
namely, to pursue compelling taste, to be considerate to people, and to be environmentally friendly. Bydeveloping 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 andensure environmental friendliness by reducing food waste and the use of plastics.
[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.
As part of our initiative to introduce self-checkout machines by leveraging the self-checkout function of the
new POS cash registers installed at all stores during the previous fiscal year, we implemented a pilot experimentin July 2019 at our LAWSON stores in Tokushima Prefecture. Based on the results, we will verify the method
and time of operation, as well as other factors, to start operating the machines at all stores after autumn. In
addition, in August 2019, as a means of addressing the labor shortage, we started a smartphone self-service
experiment at a LAWSON store in Yokohama City, Kanagawa Prefecture. Under the experiment, no staff are2

deployed at the store during the late night hours, and customers are able to purchase items by themselves
through their smartphone. We are looking to expand this initiative by verifying issues involved in store
operations, security and logistics, changes in sales, and customer feedback.
[Merchandising and Service Strategies]
In the rice and noodles range, we added a new flavor to our popular “Akuma-no-onigiri” (meaning “devil’s
rice ball”) line, which resulted in strong sales. Our pasta lineup featuring a firm and resilient texture and our
seasonal chilled noodles line also contributed to increasing sales.
In the counter fast food range, our L Chiki fried chicken line, which was revamped in June, added a new
flavor and gained popularity. We also strengthened our MACHI Café lineup by releasing seasonal products,
which, among others, contributed to strong sales.
In the bakery products range, our new bread series named “Machinopan” (meaning “town bakery”) continued
to register strong sales. We also successfully revamped our existing standard products, which contributed toincreasing sales.
In our dessert range, “BASCHEE” (short for Basque-style cheesecake) released in March 2019 enjoyedcontinued popularity. In addition, we successively launched hit products in the Uchi Café dessert range,
including “SAKUBATA” (butter cream cookie sandwich) and Japanese rice cake dessert “Doramocchi”, which
resulted in sales far outperforming the same period of the previous fiscal year.
On our service front, we started a pilot experiment on a new last-one-mile delivery initiative at the end of
August. Under the experiment, some LAWSON stores in Tokyo are delivering approximately 100 items offeredat the stores by using the Uber Eats food delivery service. The experiment will be implemented until the end of
November to verify store operations and customer needs, after which we will look into expanding the initiative
to include other stores.
On our sales promotion side, we rolled out a summer stamp rally campaign, and implemented effective
measures to attract customers, including a speed lottery capitalizing on our strength in the entertainment field.
[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, 2018
to August 31, 2018
Net sales
Percentage of(Millions of yen)
total (%)
607,282
52.4

Current 1st Half
From March 1, 2019
to August 31, 2019
Net sales
Percentage of(Millions of yen)
total (%)
634,499
52.8

Fast foods

276,057

23.8

281,405

23.4

Daily delivered foods

171,950

14.9

181,146

15.1

Non-food products

103,269

8.9

104,924

8.7

1,158,560

100.0

1,201,975

100.0

Total

(Note) These figures include stores operated by both Lawson, Inc. and Lawson Sanin, Inc.

3

[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 307 and 245 stores,
respectively, with the total number of stores reaching 14,721 as of the end of August 2019. *In an effort to establish convenience store models catered to an aging population and rising healthconsciousness, we are building partnerships with dispensing pharmacy and drug store chains to operate
healthcare-oriented LAWSON stores that offer over-the-counter pharmaceuticals and prescription drugs, aswell as a wider assortment of cosmetics and daily necessities than conventional LAWSON stores. The numberof stores offering non-prescription drugs has reached 218 stores (includes 49 pharmacy LAWSON stores
equipped with drug-dispensing pharmacies) as of the end of August 2019. Moreover, the number of stores
offering nursing care consultation services has reached 22 as of the end of August 2019. Furthermore, we havealso 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 319 as of the end of August 2019. Building on our
expertise developed through operation of in-hospital LAWSON stores, we will continue to support the lives ofall people interacting 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 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 August 2019, we operate 143 NATURAL LAWSON stores and 780
LAWSON STORE100 stores.
* The numbers of store openings and closings and total number of stores in Japan include stores operatedby Lawson, Inc., subsidiary Lawson Sanin, Inc. and three equity-method affiliates, Lawson Kochi, Inc.,
Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.

[Change in the Total Number of Domestic Stores]
Total stores as ofFebruary 28, 2019

Change during
periodTotal stores as ofAugust 31, 201913,71484

13,798

NATURAL LAWSON

139

4

143

LAWSON STORE100

806

(26)

780

14,65962

14,721LAWSON

Total

4

[Number of LAWSON stores by prefecture (As of August 31, 2019)]
Prefecture

Numberof stores

Hokkaido

681

Ibaraki

224

Kyoto

328

Ehime

216

Aomori

266

Tokyo

1,746

Shiga

156

Tokushima

137

Akita

191

Kanagawa

1,133

Nara

141

Kochi

138

Iwate

178

Shizuoka289

Wakayama

151

Fukuoka526

Miyagi254

Yamanashi

137

Osaka

1,151

Saga

75

Yamagata

114

Nagano

175

Hyogo

678

Nagasaki

112

Fukushima

164

Aichi

737

Okayama

206

Oita

191

Niigata

229

Gifu

182

Hiroshima

237

Kumamoto

158

Tochigi

205

Mie

143

Yamaguchi

119

Miyazaki

107

Gunma

255

Ishikawa

104

Tottori

143

Kagoshima

199

Saitama704

Toyama194

Shimane149

Okinawa

236

Chiba

611

Fukui

115

Kagawa136

Total(domestic)

14,721

Prefecture

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]In April 2019, we announced our action plan to strengthen relationships with and support franchise stores,
extending even stronger support to franchise stores while working to reduce staffing requirements in their store
operations as a measure to cope with the worsening labor shortage. In July 2019, we installed the Lawson
Franchise Owner Hotline exclusively for franchise owners at two locations, one within and one outside theCompany. Through the hotline, we provide franchise owners with advice on store management.
Furthermore, as part of our initiative to help achieve the Sustainable Development Goals (SDGs), we began
supplying leftover food to be discarded at our logistics centers to facilities that need food support via the Japan
Food Bank Association. In September 2019, we also redesigned all our triangular sandwich packages, which is
expected to reduce the annual amount of plastic consumption by approximately 60 tons.

As a result, Domestic Convenience Store Business posted gross operating revenue of 242,549 million yen (up1.5% from previous fiscal year) and segment profit of 29,574 million yen (up 3.0% 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 151 as of theend of August 2019. Seijo Ishii’s original quality prepared food continued to be supported by many customers,
contributing to steady 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.
5As a result, Seijo Ishii Business posted gross operating revenue of 45,150 million yen (up 7.5% from previous
fiscal year) and segment profit of 3,882 million yen (up 19.3% from previous fiscal year).

(Entertainment-related Business)
With regard to our Entertainment-related Business, the ticketing business of Lawson Entertainment, Inc., whichforms the core of the business, continued to secure top-class transaction value in the ticketing industry. In our
product sales business, as of the end of August 2019 we operate 56 stores, mainly comprised of HMV storesdedicated to selling music and video software nationwide, as well as HMV&BOOKS, which markets books, CDs,
and DVDs, and HMV Record Shop stores specializing in analog records.
As of the end of August 2019, United Cinemas Co., Ltd., an operator of cinema complexes, operates cinema
theaters at 42 sites nationwide, offering 378 screens including those operated on commission.
As a result, Entertainment-related Business posted gross operating revenue of 45,062 million yen (up 14.5%
from previous fiscal year) and segment profit of 3,681 million yen (up 45.7% from 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 Lawson Bank’s ATM service.
Lawson Bank issues LAWSON Ponta Plus credit cards, which allow cardholders to collect extra Ponta points
when used at LAWSON, NATURAL LAWSON, or LAWSON STORE100 stores, and is expanding the credit
card membership.
As of the end of August 2019, the number of ATMs installed nationwide reached 13,528 (up 69 from previous
fiscal year), with each ATM used 48.4 times a day on average. The total number of our financial institution
partners increased to 118 nationwide (up 7 from previous fiscal year), including online banks.
As a result, Financial Services Business posted gross operating revenue of 17,260 million yen (up 17.6% fromprevious fiscal year) and segment profit of 1,261 million yen (down 25.5% from previous fiscal year).
(Other Business)
In addition to the aforementioned businesses, the Group is also involved in the 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, and other cities. In August 2019, we became the first Japanese convenience store operator
to advance into Shenyang in Liaoning province, opening three stores. The number of LAWSON stores in theentire country reached 2,323 as of the end of August 2019.

6

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

Number of stores(As of February 28,
2019)

Changeduring fiscal
year

Number of stores(As of August 31,
2019)

1,227

223

1,450

China

Shanghai and surrounding area

China

Chongqing

198

14

212

China

Dalian

146

13

159

China

Beijing

108

10

118

China

Shenyang

－

3

3

China

Wuhan

308

39

347

China

Hefei

20

8

28

China

Changsha－6

6

Thailand

120

4

124

Indonesia

42

3

45

Philippines

39

14

53

2

－

2

2,210

337

2,547

United States of America

HawaiiTotal

As a result, Other Business posted gross operating revenue of 24,584 million yen (up 15.9% from previous
fiscal year) and segment loss of 1,636 million yen (down 3.6% from previous fiscal year).

7(2) Explanation Regarding Consolidated Financial Position① Assets, liabilities and net assets at the end of the first half of fiscal year 2019
Current assets increased by 42,891 million yen from the end of the previous fiscal year to 662,495 million yen,mainly reflecting an increase of 43,609 million yen in accounts receivable-other. Non-current assets increased
by 15,314 million yen from the end of the previous fiscal year to 738,040 million yen, mainly reflecting an
increase of 21,735 million yen in property and store equipment, a decrease of 4,044 million yen in intangible
assets, and a decrease of 2,377 million yen in investments and other assets. Consequently, total assets increased
by 58,206 million yen from the end of the previous fiscal year to 1,400,535 million yen.
Current liabilities increased by 45,078 million yen from the end of the previous fiscal year to 643,601
million yen, mainly reflecting a decrease of 48,450 million yen in short-term loans payable, and an increaseof 45,387 million yen in deposits received and an increase of 28,551 million yen in accounts payable-trade.
Non-current liabilities increased by 11,158 million yen from the end of the previous fiscal year to 472,983
million yen, mainly reflecting an increase of 11,385 million yen in lease obligations. Consequently, total
liabilities increased by 56,237 million yen from the end of the previous fiscal year to 1,116,585 million yen.
Net assets increased by 1,968 million yen from the end of the previous fiscal year to 283,950 million yen,mainly reflecting an increase of 6,753 million yen in retained earnings. Consequently, shareholders’ equity
ratio was 20.0%, down from 20.6% as of the end of the previous fiscal year.
Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Statement No. 28; February
16, 2018), etc. have been applied from the beginning of the first quarter of the fiscal year ending February 29,2020 in preparing the consolidated financial statements. Related information regarding the consolidated
financial position at the end of the first half under review was calculated based on an analysis in comparison
with the consolidated financial statements for the previous fiscal year after retrospectively applying thestandards.
② Cash flows during the first half of fiscal year 2019
Cash and cash equivalents at August 31, 2019 increased by 19,937 million yen from the end of the previous
fiscal year to 374,173 million yen.
Net cash provided by operating activities was 136,038 million yen, an increase of 47,999 million yen fromthe corresponding period of the previous fiscal year, mainly because of an increase in deposits received.
Net cash used in investing activities was (26,203) million yen, a decrease of (14,369) million yen from thecorresponding period of the previous fiscal year, mainly because of decreases in purchase of property andstore equipment, purchase of intangible assets and payments for transfer of business.
Net cash used in financing activities was (89,506) million yen, an increase of (56,451) million yen fromthe corresponding period of the previous fiscal year, mainly because of a decrease in short-term loans payable.

(3) Explanation Regarding Forward-looking Statements
Regarding the financial forecasts for the full fiscal year ending February 29, 2020, the financial forecasts
remain unchanged from those announced on April 11, 2019.

8

2. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheet
As of February 28, 2019 and August 31, 2019
(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 28, 2019

Current 1st Half
As of
August 31, 2019354,240
47,17919,12020,862120,969
57,355(124)
619,603374,177
47,89818,605
21,546
164,579
35,790(103)
662,495

207,755
16,056
146,880
11,607382,300

210,224
16,757
153,664
23,389404,035

49,791
46,836
9,468
576
106,672

48,28244,601
9,160
583
102,62744,024
107,034
30,99552,535(835)
233,753
722,726
1,342,329

44,523
107,575
30,68849,225(637)
231,376
738,040
1,400,535

(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, 2019

Current 1st Half
As of
August 31, 2019

123,408
126,600
50,00038,750101,995
6,683
131,804
4,263
15,015598,522

151,960
78,15050,00044,824
105,887
10,366
177,192
4,684
20,535643,601

260,000
131,441550

260,000
142,826
539

300

246

15,125
31,102
23,303461,824
1,060,347

15,56931,62922,172472,983
1,116,585

58,506
46,984
166,187(1,028)
270,649

58,50644,605
172,940(1,010)275,041

3,349
(566)
3,930
(848)
5,865
215
5,251
281,982
1,342,329

2,432
(566)
3,377
(763)
4,480
255
4,172
283,950
1,400,535

(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, 2019 and the first half of the fiscal year ending February
29, 2020(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 income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses:
Loss on retirement of non-current assets
Impairment loss
Other
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

11

Previous 1st Half
From March 1, 2018
to August 31, 2018351,973
145,471
99,66145,810Current 1st Half
From March 1, 2019
to August 31, 2019
369,131
151,426
102,794
48,631

154,375
52,126
206,502
252,312217,827
34,485

160,610
57,095
217,705
266,337
229,573
36,763

369

336

467

522

64
1,161
2,063

397
600
1,858

1,178
943
889
3,011
33,536

1,975
770
727
3,474
35,147

－
－

163
163

1,816
1,190
325
3,332
30,204
12,150125
12,275
17,928(13)
17,942

2,253
1,870
554
4,678
30,632
9,932
644
10,577
20,055(51)
20,107

Consolidated Statement of Comprehensive Income
For the first half of the fiscal year ended February 28, 2019 and the first half of the fiscal year ending February
29, 2020(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, 2018
to August 31, 2018
17,928Current 1st Half
From March 1, 2019
to August 31, 2019
20,055

1,526
(163)
(67)
1,295
19,223

(916)
(535)
84
(1,367)
18,687

19,264(40)

18,722(34)

(3) Consolidated Statement of Cash Flows
For the first half of the fiscal year ended February 28, 2019 and the first half of the fiscal year ending February
29, 2020
Previous 1st Half
From March 1, 2018
to August 31, 2018
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
Net decrease (increase) in call loans for banking business
Other
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities:
Purchase of property and store equipment
Purchase of intangible assets
Purchase of shares of subsidiaries and associates
Payments of long-term loans receivableCollection of long-term loans receivable
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Purchase of long-term prepaid expenses
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 long-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(Millions of yen)
Current 1st Half
From March 1, 2019
to August 31, 201930,20431,875
1,190
(369)
1,178
1,816
3,577
(18,279)
26,58013,386
1,659
456
－
4,989
98,265370(1,206)(9,391)
88,03830,632
38,417
1,870
(336)
1,975
2,253
(737)
(43,833)
28,7104,178
45,389443
20,00013,562
142,525305(1,964)(4,828)136,038(19,928)(10,386)(3,044)(3,665)2,539(9,641)9,290(2,138)(2,730)(868)(40,573)(16,626)(6,653)(675)(2,883)
2,555(8,863)
8,292
(468)
－
(880)
(26,203)

5,358(6,044)(19,532)(12,757)(48,450)－(24,719)(12,757)－(3,521)(79)(33,055)(739)
13,67030,120(58)(89,506)(389)
19,937354,23610－

43,801

374,173

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

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

(Changes in Accounting Policies)
The Company’s foreign consolidated subsidiaries are applying International Financial Reporting Standard
16 “Leases” (IFRS 16) from the first quarter of the fiscal year ending February 29, 2020.
The impact of the application of IFRS 16 on the Company’s consolidated financial statements is immaterial.

(Additional Information)(Application of Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.)
Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Statement No. 28; February
16, 2018), etc. have been applied from the beginning of the first quarter of the fiscal year ending February
29, 2020 in preparing the consolidated financial statements. Accordingly, deferred tax assets are classified as
investments and other assets and deferred tax liabilities are classified as non-current liabilities.
(Application of consolidated taxation system)
The Company and certain of its consolidated subsidiaries have applied the consolidated taxation systemfrom the first quarter of the fiscal year ending February 29, 2020.

14