FAST RETAILING CO., LTD.
迅銷有限公司First Quarterly Report 2019/20
2019.9.1–2019.11.30
Stock Code: 6288

Contents
1.

Corporate Profile

2

2.

Financial Highlights

33.

Management Discussion and Analysis

54.

Information about the Reporting Entity

95.

Financial Section

15

1.

2.

Interim Condensed Consolidated Financial Statements(1)

Interim Condensed Consolidated Statement of
Financial Position

16

(2)

Interim Condensed Consolidated Statement ofProfit or Loss and Interim Condensed
Consolidated Statement of Comprehensive
Income17

Interim Condensed Consolidated Statement ofProfit or Loss

17

Interim Condensed Consolidated Statement ofComprehensive Income

18

(3)

Interim Condensed Consolidated Statement of
Changes in Equity

19

(4)

Interim Condensed Consolidated Statement of
Cash Flows

21

OthersIndependent Accountant’s Review Report

3435

1. Corporate Profile
Board of Directors
Executive Director

Principal Place of Business in Japan
Midtown Tower 9-7-1
Akasaka, Minato-ku
Tokyo 107-6231
Japan

Tadashi Yanai (Chairman of the Board of Directors,
President and Chief Executive Officer)
Directors
Takeshi Okazaki
Kazumi Yanai
Koji Yanai

Principal Place of Business in Hong Kong
702–706, 7th Floor, Mira Place Tower A
No. 132 Nathan Road
Tsim Sha Tsui
KowloonHong Kong

Independent Directors
Toru Hambayashi (External)
Nobumichi Hattori (External)
Masaaki Shintaku (External)
Takashi Nawa (External)
Naotake Ohno (External)

HDR Registrar and HDR Transfer OfficeComputershare Hong Kong Investor Services Limited
Shops 1712–1716
17th Floor, Hopewell Centre
183 Queen’s Road East
WanchaiHong Kong

Board of Statutory Auditors
Akira Tanaka
Masaaki Shinjo
Masumi Mizusawa
Takaharu Yasumoto (External)
Keiko Kaneko (External)
Takao Kashitani (External)

Stock CodeHong Kong: 6288
Japan: 9983

Company Secretary

Website Address

Shea Yee Man

https://www.fastretailing.com

External Independent Accountants
Deloitte Touche Tohmatsu LLC

Principal Banks
Sumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
The Hong Kong and Shanghai Banking Corporation Limited

Registered Office and Headquarters
717-1 Sayama
Yamaguchi City
Yamaguchi 754-0894
Japan

—2—

2. Financial Highlights
Consolidated Financial Summary

TermFirst Quarterof
58th Fiscal YearFirst Quarterof
59th Fiscal Year

58th Fiscal Year

Accounting period

Three months
ended
30 November
2018

Three months
ended
30 November
2019Year ended
31 August
2019

Revenue (Millions of yen)

644,466

623,484

2,290,548

Operating profit (Millions of yen)

104,665

91,690257,636

Profit before income taxes (Millions of yen)

111,086

102,015

252,447

Profit for the period attributable to owners of the Parent(Millions of yen)

73,47670,907

162,578

Comprehensive income attributable to ownersof the Parent (Millions of yen)

96,072

107,628

140,900

Equity attributable to owners of the Parent (Millions of yen)

936,745

988,554938,621

Total assets (Millions of yen)

2,031,729

2,528,281

2,010,558

Basic earnings per share (Yen)

720.16694.73

1,593.20

Diluted earnings per share (Yen)719.01

693.591,590.55

46.1

39.1

46.7

30,13697,650300,505

Ratio of equity attributable to owners of
the Parent to total assets (%)
Net cash generated by operating activities (Millions of yen)
Net cash used in investing activities (Millions of yen)

(31,195)(33,267)(78,756)

Net cash used in financing activities (Millions of yen)

(27,144)(56,640)(102,429)

Cash and cash equivalents at end of the period (year)(Millions of yen)

979,087

1,115,031

1,086,519(Notes)1. FAST RETAILING CO., LTD. (the “Company”, “Parent” or “reporting entity”) prepared interim condensed
consolidated financial statements, and therefore has not included the non-consolidated financial summary of thereporting entity.
2. Revenue does not include consumption taxes, etc.
3. The financial figures are quoted from the interim condensed consolidated financial statements or consolidated
financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”).

—3—

Business Description
There were no significant changes in the nature of the business engaged in by the Company and its subsidiaries (collectively, the“Group”) during the three months ended 30 November 2019.
In addition, there were no significant changes in the organizational structure of the Group, including the major subsidiaries,
during the three months ended 30 November 2019.

—4—

3. Management Discussion and Analysis
Business Review
1. Business and Operational Risks
No new business-related risks have arisen during the three months ended 30 November 2019.
There have been no significant changes concerning business-related risks as stated in the annual report for the preceding
fiscal year.

2.

Financial Analysis

(1)
(i)

Financial Position and Results of Operations
Results of Operations
Business Results for the three months to 30 November 2019
The Fast Retailing Group revenue and profit both declined in the first quarter of fiscal 2020, or the three months from
1 September 2019 to 30 November 2019. Consolidated revenue totaled 623.4 billion yen (-3.3% year-on-year) andoperating profit totaled 91.6 billion yen (-12.4% year-on-year). This weaker performance was due primarily to significant
reductions in profit from both UNIQLO South Korea and UNIQLO Hong Kong and a lower-than-expected improvement in
profits from UNIQLO Japan. The first-quarter consolidated gross profit margin declined 0.2 point year-on-year to 50.2%
and the first-quarter selling, general and administrative expense ratio increased by 1.5 points to 35.9%. In addition, werecorded 10.3 billion yen under finance income net of costs after reporting a net 9.2 billion yen of foreign-exchange gainon our long-term holdings of foreign-currency denominated assets. As a result, first-quarter profit before income taxes
declined to 102.0 billion yen (-8.2% year-on-year) and profit attributable to owners of the Parent declined to 70.9 billion
yen (-3.5% year-on-year).
The Group’s medium-term vision is to become the world’s number one apparel retailer. In pursuit of this aim, we arefocusing our efforts on expanding UNIQLO International, as well as our GU brand and our global e-commerce operation.
We continue to increase UNIQLO store numbers in each markets and areas in which we operate, and open global flagshipstores and large-format stores in major cities around the world to instill deeper and more widespread empathy for
UNIQLO’s LifeWear concept. Within the UNIQLO International segment, Greater China (Mainland China, Hong Kong andTaiwan) and Southeast Asia are serving as the key pillars of our Group business and growth. In terms of our GU segment,in addition to expanding the GU store network primarily in Japan, we are working to establish GU’s position as the brandthat offers fun fashion at amazingly low prices.
UNIQLO Japan
UNIQLO Japan segment reported a decline in revenue but a rise in profit in the first quarter of fiscal 2020, with revenue
totaling 233.0 billion yen (-5.3% year-on-year) and operating profit totaling 38.5 billion yen (+1.6% year-on-year). Firstquarter same-store sales, including online sales, declined by 4.1% year-on-year. Despite multiple strong-selling items,
including new curved pants, souffle yarn sweaters, trendy sweat shirts and pants, and leggings, the decline in same-store
sales was caused by weaker demand for thermal clothing during the warm weather and our inability to sufficiently convey
the attractiveness of in-focus, newsworthy products to our customers. E-commerce sales growth also slowed for the same
reasons as for our physical stores, with online sales totaling 24.7 billion yen (+4.1% year-on-year) in the first quarter.
UNIQLO Japan’s gross profit margin improved by 2.3 points on the back of an appreciation in the yen exchange rate formerchandise purchasing. The selling, general and administrative expense ratio increased 1.0 point to 33.3%, but declined
in monetary terms as expected.
UNIQLO International
UNIQLO International segment reported a decline in revenue and profit in the first quarter of fiscal 2020, with revenue
falling to 280.7 billion yen (-3.6% year-on-year) and operating profit declining to 37.8 billion yen (-28.0% year-on-year).
However, if we strip out the significant declines in revenue and profit from South Korea and Hong Kong, the remaining
UNIQLO International markets generated rising first-quarter revenue and profit. Furthermore, following an early rundownof excess inventories at each operation, UNIQLO International’s overall gross profit margin contracted by 3.0 points
year-on-year, while the selling, general and administrative expense ratio increased 1.4 points on the back of lower-thanexpected total sales.
Looking at individual regions, if we strip out the exchange rate effect, both revenue and profit from UNIQLO Greater
China increased. However, if we include the yuan depreciation effect and the decline in Hong Kong profit, UNIQLO Greater
China operating profit declined in the three months ended 30 November 2019. Revenue and profit from Mainland China
increased on strong sales of Fall Winter ranges such as sweat shirts and pants, fleece, and flannel items. Mainland China
e-commerce sales also continued to be strong, expanding by approximately 30% year-on-year. Meanwhile, UNIQLO South—5—

Korea same-store sales declined sharply on the back of a move to boycott Japanese products that began in July 2019,
resulting in an operating loss in the first quarter. Other Asia & Oceania operation, which includes Southeast Asian nations,
Australia and India, continues to expand favorably, generating significant increases in both revenue and profit in thefirst quarter as expected. Within that grouping, Indonesia and the Philippines reported an especially strong performanceled by double-digit growth in same-store sales. We swiftly followed the opening of our first store in India in October
2019 with the opening of a second store in Delhi in November 2019. Both stores are performing strongly. UNIQLO North
America reported rising revenue and profit on the back of revenue and profit increases from Canada. While UNIQLO
Europe reported double-digit growth in first-quarter revenue, operating profit contracted slightly due to local currency
depreciation. New operations launched over the past couple of years in Spain, the Netherlands, and Italy performed
strongly, with Italy in particular reporting higher-than-expected sales.
GUGU segment reported significant increases in both revenue and profit in the first quarter of fiscal 2020, with revenue
climbing to 72.9 billion yen (+11.4% year-on-year) and operating profit expanding to 12.3 billion yen (+44.4% yearon-year). Same-store sales increased due to a product mix that adapted successfully to the warmer weather, as well
as strong sales knitwear promoted in TV commercials and advertising campaigns, and light outerwear. On the profit
front, GU’s gross profit margin improved by an impressive 3.2 points in the first quarter due to a decline in the cost of
sales generated by further aggregate purchasing of core materials and early submission of production orders, and lessdiscounting of excess stock. GU’s selling, general and administrative expense ratio also improved by 0.7 point due toimprovements in the personnel cost ratio achieved through greater efficiency of store operations and a lower advertisingand promotion cost ratio.
Global Brands
Global Brands segment revenue and profit both declined in the first quarter of fiscal 2020. Revenue totaled 36.1
billion yen (-11.4% year-on-year) and operating profit at 1.8 billion yen (-31.5% year-on-year). Our Theory fashion label
reported a decline in both revenue and profit after sales of winter items struggled slightly in Japan and USA due to thewarmer weather worldwide. Our Japan-based PLST brand also reported a decline in revenue and profit. While clothes
manufactured using our “cut-and-sew” method, cardigans and other Fall items sold well, sales of thermal outerwear
and bottoms struggled. Finally, our France-based Comptoir des Cotonniers brand remained its operating loss in the firstquarter compared with the same period of fiscal 2019.
Sustainability
In keeping with our key sustainability message, “Unlocking the power of clothing,” Fast Retailing pursues sustainability
activities through our core clothing business focused on six clear material areas: Creating new value through products
and services; Respecting human rights in our supply chain; Respecting the environment; Strengthening communities;
Supporting employee fulfillment; Implementing good corporate governance. Our main activities in the first quarter offiscal 2020 from September to December 2019 involved:■ Creating new value through products and services: UNIQLO Japan started a new recycling initiative in November 2019that uses the down extracted from quality second-hand down items brought in by customers to any UNIQLO store in the
country as material for new down products. From September 2019, we had collected approximately 620,000 secondhand down items under this project. We also plan to start producing high-functioning, quick-drying Dry Ex products using
recycled polyester in some of our scheduled 2020 Spring Summer ranges. These initiatives show how we are creating new
clothing value by using new technologies to encourage the reuse of resources.
■ Respecting the environment: In October 2019, our UNIQLO Kawagoe Store won the Industry Pioneer award hosted by
the non-profit U.S. Green Buildings Council (USGBC) for its cutting-edge initiatives to reduce the environmental impact of
its operations, and became the first retail store in Japan to receive a Gold certification under the USGBC’s Leadership in
Energy & Environmental Design (LEED) rating program that certifies environmentally conscious buildings and construction
spaces. In addition, we joined industry-wide organizations including the Japan-based Clean Ocean Material Alliance(CLOMA) and the UK-based The Microfiber Consortium (TMC) to help address the problem of plastic waste in oceans.

—6—

■ Strengthening communities: In October 2019, we donated approximately 70,000 items of outerwear, fleece andinnerwear to typhoon-struck areas in the Tohoku region of Northeast Japan. Then, in November 2019, we decided tocontribute 1 million US dollars to refugee-support activities in Mali and South Sudan operated by the United Nations
Refugee Agency (UNHCR).
(ii)

Financial Position
Total assets as at 30 November 2019 were 2,528.2 billion yen, which was an increase of 517.7 billion yen relative to theend of the preceding fiscal year. The principal factors were an increase of 80.4 billion yen in trade and other receivables,
an increase of 14.1 billion yen in other financial assets, an increase of 14.0 billion yen in inventories, a decrease of 27.5
billion yen in property, plant and equipment, an increase of 389.8 billion yen in right-of-use assets and an increase of 18.9
billion yen in derivative financial assets.
Total liabilities as at 30 November 2019 were 1,494.0 billion yen, which was an increase of 467.0 billion yen relative to theend of the preceding fiscal year. The principal factors were an increase of 35.6 billion yen in trade and other payables, anincrease of 30.7 billion yen in other financial liabilities, an increase of 9.3 billion yen in current tax liabilities, a decrease of
29.2 billion yen in non-current financial liabilities, an increase of 443.5 billion yen in lease liabilities and a decrease of 13.0
billion yen in other non-current liabilities.
Furthermore, the increases of right-of-use assets and lease liabilities are due to the application of IFRS 16 Leases asmentioned in “Notes to the Interim Condensed Consolidated Financial Statements 3. Significant Accounting Policies”.
Total net assets as at 30 November 2019 were 1,034.2 billion yen, which was an increase of 50.6 billion yen relative tothe end of the preceding fiscal year. The principal factors were an increase of 13.5 billion yen in retained earnings and anincrease of 33.7 billion yen in other components of equity.

(2)

Cash Flows Information
Cash and cash equivalents as at 30 November 2019 had increased by 28.5 billion yen from the end of the preceding fiscal
year, to 1,115.0 billion yen.
(Operating Cash Flows)
Net cash generated by operating activities for the three months ended 30 November 2019 was 97.6 billion yen, which was
an increase of 67.5 billion yen (+224.0% year-on-year) from the three months ended 30 November 2018. The principal
factors were 102.0 billion yen in profit before income taxes (a decrease of 9.0 billion yen from the three months ended
30 November 2018), 9.2 billion yen in foreign exchange gains (a decrease of 4.2 billion yen from the three months ended
30 November 2018), 43.0 billion yen in depreciation and amortization (an increase of 31.0 billion yen from the threemonths ended 30 November 2018), an increase of 77.2 billion yen in trade and other receivables (a decrease of 2.9 billion
yen from the three months ended 30 November 2018), an increase of 4.9 billion yen in inventories (a decrease of 20.4
billion yen from the three months ended 30 November 2018), an increase of 32.0 billion yen in trade and other payables(an increase of 42.6 billion yen from the three months ended 30 November 2018), an increase of 31.7 billion yen in otherliabilities (an increase of 42.3 billion yen from the three months ended 30 November 2018) and 22.0 billion yen in income
taxes paid (a decrease of 8.1 billion yen from the three months ended 30 November 2018).
(Investing Cash Flows)
Net cash used in investing activities for the three months ended 30 November 2019 was 33.2 billion yen, which was anincrease of 2.0 billion yen (+6.6% year-on-year) from the three months ended 30 November 2018. The principal factors
were 9.1 billion yen in bank deposits with original maturity over three months (a decrease of 2.8 billion yen from thethree months ended 30 November 2018), 14.1 billion yen in payments for property, plant and equipment (an increase of
1.9 billion yen from the three months ended 30 November 2018), and 2.6 billion yen in payments for right-of-use assets(an increase of 2.6 billion yen from the three months ended 30 November 2018).
(Financing Cash Flows)
Net cash used in financing activities for the three months ended 30 November 2019 was 56.6 billion yen, which was anincrease of 29.4 billion yen (+108.7% year-on-year) from the three months ended 30 November 2018. The principal factor
was 32.8 billion yen in repayments of lease liabilities (an increase of 32.8 billion yen from the three months ended 30
November 2018).
—7—

(3)

Operational and Financial Challenges
There have been no significant challenges during the three months ended 30 November 2019 that resulted in issues thatmust be addressed by the Group.

(4)

Research and Development
Not applicable.

(5)

Significant Facilities
The following are the significant facilities that were newly completed during the three months ended 30 November 2019.
<Subsidiaries in Japan>
Not applicable.
<Overseas Subsidiaries>
Company name

Type of facility

Name of business

Location

Completion date

UNIQLO EUROPE LIMITEDUNIQLOInternational StoreUNIQLO Piazza
Cordusio

Milan,
Italy

September 2019UNIQLO INDIA PRIVATE LIMITEDUNIQLOInternational StoreUNIQLO Ambience
Mall Vasant Kunj
store

New Delhi,
India

October 2019

The following are the significant facilities that were newly planned during the three months ended 30 November 2019.
<Subsidiaries in Japan>
Not applicable.
<Overseas Subsidiaries>
Amount of planned
investment
Company

Type of

Name ofnamefacilitybusinessAmountLocation

Total

already(Millions of

disbursed

yen)(Millions ofConstruction

Construction

startcompletion

Plannedsales floor

Referencearea (m2)yen)
UNIQLOUNIQLOVIETNAMInternational

Co., LtdStore(Notes)3.

UNIQLO
Dong Khoi

Ho Chi
Minh,614

Vietnam

171

July 2019

December
2019

1. It is expected that the Group will be able to meet its funding needs from equity capital.
2. The above figures do not include consumption taxes, etc.

Significant Contracts in Business Operation
None.

—8—

3,097

Leasehold4. Information about the Reporting Entity
1. Stock Information(1) Number of Shares(i)

Total number of shares
Type

Total number of authorized shares

Common stock

300,000,000
Total

(ii)

300,000,000

Shares Issued

Type

Number of shares issued
as at 30 November 2019

Number of shares issued
as at submission date
(As at 10 January 2020)

Name of financial
instrument exchangeof listing, or authorized
financial instruments
firms association

Remarks

100 sharesas one unit—

Common stock

106,073,656

106,073,656

First section of the Tokyo
Stock Exchange andthe Main Board of
the Stock Exchange ofHong Kong Limited (Note)

Total

106,073,656

106,073,656—(Note) Hong Kong Depositary Receipts are listed on the Main Board of the Stock Exchange of Hong Kong Limited.

(2)

Share Subscription Rights

1.

Details of the Stock Option Program
The Company has instituted a stock option program that grants rights to acquire new shares pursuant to the Companies
Act of Japan. Share subscription rights issued in the three months ended 30 November 2019 are as follows:(i)

10th Share subscription rights A type

Resolution date

10 October 2019

Class and number of recipients (Persons)

Employees of the Company:
Employees of Group subsidiaries:

Number of stock options (Shares)

3,548

Type of shares to be issued upon exercise of sharesubscription rights

Common Stock

Number of shares to be issued upon exercise of sharesubscription rights (Shares)

3,548

Amount to be paid upon exercise of share subscription rights(Yen)

Number of shares allocated times 1 yen exercise price pershare for all shares to be obtained through exercise of theshare subscription rights.

Exercise period of share subscription rights

From 8 November 2022
to 7 November 2029

Fair value on the grant date and amount of paid-in capitalper share upon exercise of share subscription rights (Yen)

Issue price:
Paid-in capital:

Exercise conditions of share subscription rights

If a holder of share subscription rights waives the rightto acquire shares, the share subscription rights shall be
forfeited and may not be exercised.

Matters pertaining to transfer of share subscription rights

Any acquisition of share subscription rights by transfer shallrequire an authorizing resolution from the Boardof Directors.

Matters pertaining to issuing of share subscription rights inconjunction with reorganization(Notes)11
46

66,05933,030※ The above information is disclosed as at the date of issuing share subscription rights (8 November 2019).

—9—

(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of a merger (limited
to cases where the Company becomes extinct thereby), absorption-type company split or incorporation-type company
split (in each event, limited to cases where the Company is the entity resulting from the company split), or exchangeor transfer of shares (in each event, limited to cases where the Company becomes a wholly owned subsidiary),
parties holding share subscription rights in existence immediately preceding the effective date of such Reorganization(hereinafter referred to as “Outstanding Share Subscription Rights”) shall, in each applicable case, be issued sharesubscription rights for shares of the resulting company as prescribed in Article 236 (1) viii of the Companies Act ofJapan (hereinafter referred to as the “Company Resulting From Reorganization”). In such event, any Outstanding Share
Subscription Rights shall lapse and the Company Resulting From Reorganization shall issue new share subscription rights;
however provided, that terms and conditions stipulating that the Company Resulting From Reorganization shall issue
share subscription rights that prescribe the matters stated below shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange agreement or transfer of shares plan.
1.
Number of share subscription rights to be issued by the Company Resulting From Reorganization: Each holder of
Outstanding Share Subscription Rights shall be issued the same number thereof.
2.
Type of shares of the Company Resulting From Reorganization underlying the share subscription rights: Common
stock of the Company Resulting From Reorganization.
3.
Number of shares of the Company Resulting From Reorganization underlying the share subscription rights:
A proposal stating the conditions for Reorganization and the like shall include a finalized statement of the type andnumber of shares underlying the above-mentioned share subscription rights.
4.
Value of property to be incorporated upon exercise of the share subscription rights:
The value of property to be incorporated upon exercise of share subscription rights that are issued shall be theamount obtained by multiplying the exercise price after reorganization prescribed below by the number of sharesof the Company Resulting From Reorganization underlying the share subscription rights that have been finalized asstated in No. 3. above. The exercise price after Reorganization shall be 1 yen per share of the Company Resulting
From Reorganization that can be issued upon exercise of each share subscription right that is issued.
5.
Period during which share subscription rights can be exercised:
The period from the later of either the first day of the period during which share subscription rights can be
exercised as prescribed above or the day on which a Reorganization takes effect through the final day of theperiod during which share subscription rights can be exercised as prescribed above.
6.
Matters pertaining to the increase of capital and capital reserve resulting from the issuance of shares upon
exercise of the share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.
7.
Restrictions on acquisition of share subscription rights by transfer:Any acquisition of share subscription rights by transfer shall require an authorizing resolution from the Board of
Directors of the Company Resulting From Reorganization.
8.
Terms and conditions for acquisition of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.
9.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

— 10 —

(ii)

10th Share subscription rights B type

Resolution date

10 October 2019

Class and number of recipients (Persons)

Employees of the Company:
Employees of Group subsidiaries:

Number of stock options (Shares)

37,424

Type of shares to be issued upon exercise of sharesubscription rights

Common Stock

Number of shares to be issued upon exercise ofshare subscription rights (Shares)

37,424

Amount to be paid upon exercise of share subscription rights(Yen)

Number of shares allocated times 1 yen exercise price pershare for all shares to be obtained through exercise of theshare subscription rights.

Exercise period of share subscription rights

From 8 December 2019
to 7 November 2029

Fair value on the grant date and amount of paid-in capitalper share upon exercise of share subscription rights (Yen)

Issue price:
Paid-in capital:

Exercise conditions of share subscription rights

If a holder of share subscription rights waives the rightto acquire shares, the share subscription rights shall be
forfeited and may not be exercised.

Matters pertaining to transfer of share subscription rights

Any acquisition of share subscription rights by transfer shallrequire an authorizing resolution from the Boardof Directors.

Matters pertaining to issuing of share subscription rights inconjunction with reorganization(Notes)528
1,389

66,73333,367※The above information is disclosed as at the date of issuing share subscription rights (8 November 2019).
(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases where the Company becomes extinct thereby), absorption-type company split or incorporation-type company
split (in each event, limited to cases where the Company is the entity resulting from the company split), or exchangeor transfer of shares (in each event, limited to cases where the Company becomes a wholly owned subsidiary),
parties holding share subscription rights in existence immediately preceding the effective date of such Reorganization(hereinafter referred to as “Outstanding Share Subscription Rights”) shall, in each applicable case, be issued sharesubscription rights for shares of the resulting company as prescribed in Article 236 (1) viii of the Companies Act ofJapan (hereinafter referred to as the “Company Resulting From Reorganization”). In such event, any Outstanding Share
Subscription Rights shall lapse and the Company Resulting From Reorganization shall issue new share subscription rights;
however provided terms and conditions stipulating that the Company Resulting From Reorganization shall issue sharesubscription rights that prescribe the matters stated below shall be included in any absorption merger agreement, newmerger agreement, absorption-type company split agreement, incorporation-type company split plan, share exchange
agreement or transfer of shares plan.
1.
2.
3.

4.

Number of share subscription rights to be issued by the Company Resulting From Reorganization: Each holder of
Outstanding Share Subscription Rights shall be issued the same number thereof.
Type of shares of the Company Resulting from Reorganization underlying the share subscription rights: Common
stock of the Company Resulting From Reorganization.
Number of shares of the Company Resulting from Reorganization underlying the share subscription rights:
A proposal stating the conditions for Reorganization and the like shall include a finalized statement of the type andnumber of shares underlying the above-mentioned share subscription rights.
Value of property to be incorporated upon exercise of the share subscription rights:
The value of property to be incorporated upon exercise of share subscription rights that are issued shall be theamount obtained by multiplying the exercise price after reorganization prescribed below by the number of sharesof the Company Resulting From Reorganization underlying the share subscription rights that have been finalized asstated in No. 3. above. The exercise price after Reorganization shall be 1 yen per share of the Company Resulting
From Reorganization that can be issued upon exercise of each share subscription right that is issued.

— 11 —

5.

6.

7.

8.
9.

(iii)

Period during which share subscription rights can be exercised:
The period from the later of either the first day of the period during which share subscription rights can be
exercised as prescribed above or the day on which a Reorganization takes effect through the final day of theperiod during which share subscription rights can be exercised as prescribed above.
Matters pertaining to the increase of capital and capital reserve resulting from the issuance of shares upon
exercise of the share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.
Restrictions on acquisition of share subscription rights by transfer:Any acquisition of share subscription rights by transfer shall require an authorizing resolution from the Board of
Directors of the Company Resulting From Reorganization.
Terms and conditions for acquisition of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

10th Share subscription rights C type

Resolution date

10 October 2019

Class and number of recipients (Persons)

Employees of the Company:

Number of stock options (Shares)

3,666

Type of shares to be issued upon exercise of sharesubscription rights

Common Stock

Number of shares to be issued upon exercise of sharesubscription rights (Shares)

3,666

Amount to be paid upon exercise of share subscription rights(Yen)

Number of shares allocated times 1 yen exercise price pershare for all shares to be obtained through exercise of theshare subscription rights.

Exercise period of share subscription rights

8 November 2022

Fair value on the grant date and amount of paid-in capitalper share upon exercise of share subscription rights (Yen)

Issue price:
Paid-in capital:

Exercise conditions of share subscription rights

If a holder of share subscription rights waives the rightto acquire shares, the share subscription rights shall be
forfeited and may not be exercised.

Matters pertaining to transfer of share subscription rights

Any acquisition of share subscription rights by transfer shallrequire an authorizing resolution from the Boardof Directors.

Matters pertaining to issuing of share subscription rights inconjunction with reorganization(Notes)40

67,68533,843※The above information is disclosed as at the date of issuing share subscription rights (8 November 2019).
(Notes) Upon any reorganization of the Company (collectively referred to as “Reorganization”) consisting of merger (limited tocases where the Company becomes extinct thereby), absorption-type company split or incorporation-type company
split (in each event, limited to cases where the Company is the entity resulting from the company split), or exchangeor transfer of shares (in each event, limited to cases where the Company becomes a wholly owned subsidiary),
parties holding share subscription rights in existence immediately preceding the effective date of such Reorganization(hereinafter referred to as “Outstanding Share Subscription Rights”) shall, in each applicable case, be issued sharesubscription rights for shares of the resulting company as prescribed in Article 236 (1) viii of the Companies Act ofJapan (hereinafter referred to as the “Company Resulting From Reorganization”). In such event, any Outstanding Share
Subscription Rights shall lapse and the Company Resulting From Reorganization shall issue new share subscription rights;
however provided that terms and conditions stipulating that the Company Resulting From Reorganization shall issue
share subscription rights that prescribe the matters stated below shall be included in any absorption merger agreement,
new merger agreement, absorption-type company split agreement, incorporation-type company split plan, shareexchange agreement or transfer of shares plan.

— 12 —

1.
2.
3.

4.

5.

6.

7.

8.
9.

Number of share subscription rights to be issued by the Company Resulting From Reorganization: Each holder of
Outstanding Share Subscription Rights shall be issued the same number thereof.
Type of shares of the Company Resulting From Reorganization underlying the share subscription rights: Common
stock of the Company Resulting From Reorganization.
Number of shares of the Company Resulting From Reorganization underlying the share subscription rights:
A proposal stating the conditions for Reorganization and the like shall include a finalized statement of the type andnumber of shares underlying the above-mentioned share subscription rights.
Value of property to be incorporated upon exercise of the share subscription rights:
The value of property to be incorporated upon exercise of share subscription rights that are issued shall be theamount obtained by multiplying the exercise price after reorganization prescribed below by the number of sharesof the Company Resulting From Reorganization underlying the share subscription rights that have been finalized asstated in No. 3. above. The exercise price after Reorganization shall be 1 yen per share of the Company Resulting
From Reorganization that can be issued upon exercise of each share subscription right that is issued.
Period during which share subscription rights can be exercised:
The period from the later of either the day on which share subscription rights can be exercised as prescribedabove or the day on which a Reorganization takes effect.
Matters pertaining to the increase of capital and capital reserve resulting from the issuance of shares upon
exercise of the share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.
Restrictions on acquisition of share subscription rights by transfer:Any acquisition of share subscription rights by transfer shall require an authorizing resolution from the Board of
Directors of the Company Resulting From Reorganization.
Terms and conditions for acquisition of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.
Conditions for exercise of share subscription rights:
To be determined in order to align with the conditions applicable to the subject share subscription rights.

2.

Other Share Subscription Rights
Not applicable.

(3)

Exercise of convertible bonds with conditional permission for adjustment of exercise priceNot applicable.

(4)

Change in Total Number of Shares Issued, Capital Stock, Etc.

Date

1 September 2019 to
30 November 2019

Increase/
Increase/
Balance of total (decrease) of(decrease) of
number ofcapital stock
total number ofshares issued(Millionsshares issuedof yen)—106,073,656—

Balance ofcapital stock(Millionsof yen)10,273

Increase/
Balance of(decrease) ofcapital reserve
capital reserve(Millions(Millionsof yen)of yen)—4,578(Note) There was no change in the total number of shares issued, capital stock or capital reserve during the three months
ended 30 November 2019.

— 13 —

(5)Major Shareholders
There are no items to disclose, as the accounting period under review is the first quarter accounting period.

(6)

Voting Rights
Concerning “Voting Rights” as at the end of the three months ended 30 November 2019, it has not been possible toconfirm and state the details entered in the register of shareholders. Therefore, the stated details are based on theregister of shareholders as at the immediately preceding record date (31 August 2019).

(i)

Shares issued
As at 30 November 2019
Number of shares

Number of voting
rightsRemarks

Non-voting shares

—

—

—

Shares subject to restrictions on voting rights(i.e., treasury stock, etc.)

—

—

—

Shares subject to restrictions on voting rights(i.e., other than treasury stock)

—

—

—

Shares with full voting rights(i.e., treasury stock, etc.)(Shares held astreasury stock)
Common stock
4,011,900——

Shares with full voting rights(i.e., other than treasury stock)

Common stock
102,003,400

Class

Common stock

Shares less than one unit

58,356

Total number of shares issued

106,073,656

Total number of voting rights of allshareholders—(Notes)(ii)

1,020,034(Note) 1—(Notes) 1, 2——
1,020,034—

1. The columns for the number of shares of “Shares with full voting rights (i.e., other than treasury stock) ” and“Shares less than one unit” include 2,700 shares and 84 shares, respectively, held in the name of Japan Securities
Depository Center, Inc.
2. Common stock in the “Shares less than one unit” row includes 21 shares of treasury stock held by the Company.

Treasury StockAs at 30 November 2019

Name or trade name ofholderFAST RETAILING CO.,
LTD.
Total

2.

Number ofshares heldin own name

Number ofshares held inother’s name

Total numberof shares held

Percentage of
total number ofshares issued (%)

717-1 Sayama
Yamaguchi-shi
Yamaguchi

4,011,900—

4,011,900

3.78—

4,011,900—

4,011,900

3.78

Holder’s address

Directors
Since the submission of the year-end report for the preceding fiscal year, there has been no change of directors during
the three months ended 30 November 2019.

— 14 —

5. Financial Section
1.

Preparation of Interim Condensed Consolidated Financial Statements
The interim condensed consolidated financial statements of the Group, namely, the interim condensed consolidated
statement of financial position of the Group as at 30 November 2019, the related interim condensed consolidated
statements of profit or loss and interim condensed consolidated statement of comprehensive income for the three-month
period then ended, and the interim condensed consolidated statements of changes in equity and cash flows for the threemonth period then ended (collectively, the “interim condensed consolidated financial statements”) were prepared incompliance with International Accounting Standard 34 Interim Financial Reporting (“IAS 34”), pursuant to Article 93 of the“Rules Governing Term, Form and Preparation of Consolidated Quarterly Financial Statements” (Cabinet Office Ordinance
No. 64 of 2007, hereinafter referred to as “Consolidated Quarterly Financial Statements Rules”).

2.

Review Report
Pursuant to the first clause of Article 193-2 of the Financial Instruments and Exchange Act, the interim condensed
consolidated financial statements have been reviewed by Deloitte Touche Tohmatsu LLC.

— 15 —

(Amounts are stated in millions of yen and are rounded down to the nearest million unless otherwise stated)

1. Interim Condensed Consolidated Financial Statements(1)

Interim Condensed Consolidated Statement of Financial Position(Millions of yen)
Notes

ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Derivative financial assets
Income taxes receivable
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Financial assets
Investments in associates accounted
for using the equity method
Deferred tax assets
Derivative financial assets
Other assets
Total non-current assets
Total assets
Liabilities and equity
LIABILITIESCurrent liabilities
Trade and other payables
Other financial liabilities
Derivative financial liabilities
Lease liabilities
Current tax liabilities
Provisions
Other liabilities
Total current liabilities
Non-current liabilities
Financial liabilities
Lease liabilities
Provisions
Deferred tax liabilities
Derivative financial liabilities
Other liabilities
Total non-current liabilities
Total liabilities
EQUITY
Capital stock
Capital surplus
Retained earnings
Treasury stock, at cost
Other components of equity
Equity attributable to owners of the Parent
Non-controlling interests
Total equity
Total liabilities and equity

As at 31 August 2019

14
6
14

7

14

14

14
14

14

14

— 16 —

As at 30 November 2019

1,086,519
60,39844,473
410,526
14,787
1,492
19,975
1,638,174

1,115,031
140,834
58,649424,615
16,938
1,246
18,693
1,776,010

162,092—
8,092
60,11777,026

134,583
389,820
8,092
63,63968,105

14,58733,1639,442
7,861
372,384
2,010,558

14,54337,442
26,197
9,845
752,2712,528,281

191,769
159,006
2,985—
27,451
13,34082,103476,658

227,427
189,780
1,317
104,646
36,769691
79,406640,039499,948—
20,474
8,822
3,838
17,281
550,365
1,027,024

470,675
338,869
34,011
5,971
263
4,250
854,041
1,494,080

10,273
20,603928,748(15,271)(5,732)
938,62144,913
983,534
2,010,558

10,27323,167942,343(15,245)
28,015988,554
45,646
1,034,201
2,528,281

(2)Interim Condensed Consolidated Statement of Profit or Loss and Interim Condensed Consolidated Statement ofComprehensive Income
Interim Condensed Consolidated Statement of Profit or Loss
Three months ended 30 November 2019
(Millions of yen)
Notes

RevenueThree months ended
30 November 2018

9

Three months ended
30 November 2019

644,466(319,658)

623,484(310,560)

324,808(221,515)
1,951
(769)

312,923(224,098)
4,083(1,467)

189

249

104,665
7,560(1,139)91,69012,219(1,894)

Income tax expense

111,086(30,801)

102,015(30,174)

Profit for the period

80,28571,84073,476
6,808

70,907932

80,28571,840720.16719.01

694.73693.59

Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Share of profit and loss of associates accounted
for using the equity method

10
11
11

Operating profit
Finance income

12

Finance costs

12

Profit before income taxes

Profit for the period attributable to:
Owners of the Parent
Non-controlling interests
Earnings per share
Basic (yen)Diluted (yen)1313— 17 —

Interim Condensed Consolidated Statement of Comprehensive Income
Three months ended 30 November 2019
(Millions of yen)Three months ended
30 November 2018
Profit for the period
Other comprehensive income, net of income tax
Items that will not be reclassified
subsequently to profit or loss
Financial assets measured at fair value
through other comprehensive income
Total items that will not be reclassified
subsequently to profit or loss
Items that may be reclassified
subsequently to profit or loss
Exchange differences on translating
foreign operations
Cash flow hedges

Three months ended
30 November 201980,28571,840

(116)

18

(116)

18

6,835
16,80718

18,002
20,244
19

23,662

38,26623,54538,284

103,831

110,125

Non-controlling interests

96,072
7,759

107,628
2,496

Total comprehensive income for the period

103,831

110,125

Share of other comprehensive income of associates
Total items that may be reclassified
subsequently to profit or loss
Other comprehensive income, net of income tax
Total comprehensive income for the period
Attributable to:
Owners of the Parent— 18 —

(3)Interim Condensed Consolidated Statement of Changes in Equity
For the three months ended 30 November 2018
(Millions of yen)
Other components of equity

Foreigncurrencytranslation
reserve

Share of othercomprehensive
Cash flow
income ofhedge reserve associates
19,202—

Note Capital stock Capital surplus

Retainedearnings

10,273

18,275815,146(15,429)37

15,429——73,476

—

—

—

—

—

—
—

—
—

—
73,476

—
—

(116)
(116)

6,145
6,145

16,54816,548

—
—
—

508
—
1,649

—
(24,484)
—

63
—
—

—
—
—

—
—
—

—

—

—

—

—

—

—

—

—

—

2,157

(24,484)—
10,273

2,157
20,433

48,991
864,138

As at 1 September 2018
Net changes during the period
Comprehensive income
Profit for the period
Other comprehensive income/(loss)
Total comprehensive income/(loss)
Transactions with the ownersof the Parent
Disposal of treasury stock
Dividends
Share-based payments
Incorporation ofa new subsidiary
Changes in ownershipinterests in subsidiaries
without losing control
Total transactions withthe owners of the Parent
Total net changes during
the period
As at 30 November 2018

Financial assets
measured
at fair value
through other
Treasury stock, comprehensive
at costincome8

Total
34,669Equityattributable toownersof theNon-controlling
Parentinterests

Total
equity862,936

39,841

902,777—

73,476

6,808

80,28518
18

22,595
22,595

22,59596,072

950
7,759

23,545
103,831

—
—
—

—
—
—

—
—
—

572
(24,484)
1,649—(3,531)—

572(28,016)
1,649

—

—

—

—

—

250

250

—

—

—

—

—

—

169

169

63

—

—

—

—

—

(22,262)(3,111)(25,374)63(15,365)

(116)
(79)

6,145
21,575

16,54835,75018
18

22,59557,26573,809936,745

4,648
44,48978,457981,234— 19 —

For the three months ended 30 November 2019
(Millions of yen)
Other components of equity

As at 1 September 2019
Adjustments due to changes
in accounting policy
Effect of change in counting policy
Net changes during the period
Comprehensive income
Profit for the period
Other comprehensive income
Total comprehensive income
Transactions with the ownersof the Parent
Acquisition of treasury stock
Disposal of treasury stock
Dividends
Share-based payments
Transfer to non-financial assets
Total transactions withthe owners of the Parent
Total net changes during
the period
As at 30 November 2019

Financial assets
measured
at fair value
through other
Treasury stock, comprehensive
at costincomeForeigncurrencytranslation
reserve

Notes Capital stock Capital surplus

Retainedearnings

10,273

20,603928,748(15,271)(697)

Share of othercomprehensive
Cash flow
income ofhedge reserve associates(13,929)
8,906
(11)

—
10,273—
20,603(32,817)895,930—(15,271)

—
(697)

—
(13,929)

—
8,906

—
(11)

—
—
—

—
—
—

70,907—70,907

—
—
—

—
18
18

—
15,811
15,811—
20,872
20,872

—
—
—
—
—

—
291
—
2,271
—

—
—
(24,494)
—
—

(5)
32
—
—
—

—
—
—
—
—

—
—
—
—
—

—

2,563

(24,494)26——
10,273

2,563
23,167

46,412
942,34326(15,245)

18
(679)

3

8

— 20 —

Total(5,732)Equityattributable toownersof theNon-controlling
Parentinterest

Total
equity938,62144,913

983,534—(5,732)(32,817)905,803(1,386)
43,526(34,204)
949,329—19
19—
36,72136,72170,90736,721
107,628

932
1,563
2,496

71,84038,284
110,125————(2,973)

—
—
—
—
—

—
—
—
—
(2,973)(5)323(24,494)
2,271(2,973)

—
—
—
—
(375)

(5)
323
(24,494)
2,271(3,349)—(2,973)—(2,973)(24,878)(375)(25,254)

15,811
1,881

17,89826,80419
833,74728,01582,750988,554

2,120
45,64684,871
1,034,201

(4)Interim Condensed Consolidated Statement of Cash Flows(Millions of yen)
Note

Three months ended
30 November 2018

Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Impairment losses
Interest and dividend income
Interest expenses
Foreign exchange gains
Share of profit and loss of associates accounted
for using the equity method
Losses on disposal of property,
plant and equipment
Increase in trade andother receivables
Decrease/(increase) in inventories(Decrease)/increase in trade and other payables
Decrease/(increase) in other assets(Decrease)/increase in other liabilities

Three months ended
30 November 2019

111,086
11,982—(2,530)1,139(5,030)102,015
43,067836(2,921)
1,894(9,297)

(189)

(249)

59

73

(74,305)
15,510(10,562)
1,396(10,640)
3,988(77,222)(4,963)32,042(65)
31,703965

Income taxes paid

41,904
2,461(361)(13,867)

117,879
2,891(1,081)(22,039)

Net cash generated by operating activities

30,13697,650(29,175)(30,454)

17,153(12,176)(5,912)—(1,346)

21,327(14,127)(5,433)(2,636)(1,609)

858
(595)

1,000
(1,334)(31,195)(33,267)

Others, net
Cash generated from operations
Interest and dividends income received
Interest paid

Cash flows from investing activities
Amounts deposited into bank deposits
with original maturities of three months
or longer
Amounts withdrawn from bank deposits
with original maturities of three months
or longer
Payments for property, plant and equipment
Payments for intangible assets
Payments for acquisition of Right-of-use assets
Payments for lease and guarantee deposits
Proceeds from collection of lease andguarantee deposits
Others, net
Net cash used in investing activities— 21 —

(Millions of yen)
NoteCash flows from financing activities
Proceeds from short-term loans payable
Repayment of short-term loans payable
Dividends paid to owners of the Parent
Capital contributions from non-controllinginterests
Dividends paid to non-controlling interests
Repayments of financial lease obligations
Repayments of lease liabilities

Three months ended
30 November 2018

Three months ended
30 November 2019

1,257
(967)
(24,455)625—(24,473)

Others, net

420
(560)
(2,878)—39———(32,819)26

Net cash used in financing activities(27,144)(56,640)

7,594

20,769(20,609)28,511

999,697

1,086,519

979,087

1,115,031

8

Effect of exchange rate changes on the balanceof cash held in foreign currencies
Net (decrease)/increase in cash andcash equivalents
Cash and cash equivalents at the beginningof period
Cash and cash equivalents at the endof period— 22 —

Notes to the Interim Condensed Consolidated Financial Statements
1. Reporting Entity
FAST RETAILING CO., LTD. is a company incorporated in Japan. The locations of the registered headquarters and principal
offices of the Company are disclosed on the Group’s website (http://www.fastretailing.com/eng/).
The principal activities of the Company and its consolidated subsidiaries are the operations of the UNIQLO business (i.e.,casual clothing retail business operating under the “UNIQLO” brand in Japan and overseas), GU business (i.e., casual clothingretail business operating under the “GU” brand in Japan and overseas), Theory business (i.e., apparel design and retailbusiness in Japan and overseas), and other businesses.
2. Basis of Preparation
The interim condensed consolidated financial statements have been prepared in compliance with IAS 34. The Group
meets all of the criteria of a “specified company” defined under Article 1-2 of the Consolidated Quarterly Financial
Statements Rules, and accordingly applies Article 93 of the Consolidated Quarterly Financial Statements Rules. Since
the interim condensed consolidated financial statements do not include all the information and disclosures required forconsolidated financial statements, they should be read in conjunction with the Group’s annual consolidated financial
statements for the year ended 31 August 2019.
The interim condensed consolidated financial statements were approved on 10 January 2020 by Tadashi Yanai, Chairman,
President and CEO, and Takeshi Okazaki, Group Executive Vice President and CFO.
3. Significant Accounting Policies
Except for the following standards that have been newly applied, the accounting policies presented in the consolidated
financial statements for the year ended 31 August 2019 are applied consistently in the preparation of these interim
condensed consolidated financial statements.
The Group adopted the following new and revised standards and interpretations beginning with the preparation of theinterim condensed consolidated financial statements.
IFRS

Title

Summary of new standards and amendments

IFRS 16

LeasesAmendments
arrangementtoaccounting

treatment

for

leave

IFRIC 23

Uncertainty over Income Tax
Treatments

Clarifies the accounting for uncertainties in income tax(1) Application of IFRS 16: Leases
The Group began applying IFRS 16 Leases (announced in January 2016; hereinafter “IFRS 16”), from the first quarter ofthe current fiscal year. In applying IFRS 16, the Group has adopted the cumulative catch-up approach that recognizes the
cumulative effect of initial application of the standard as at the date of initial application (1 September 2019) as a transition
method, without restating comparative information.
1) Definition of lease
The application of IFRS 16 requires that a judgment be made at the inception of a contract as to whether a contract is, or
contains, a lease. If a contract conveys the right to control the use of an identified asset for a period of time in exchange forconsideration, the contract is, or contains, a lease.
To determine whether or not a contract conveys the right to control the use of an identified asset, the Group examines
whether the contract includes the use of the specified asset, whether the Group has the right to obtain substantially all of
the economic benefits from use of identified asset throughout the period of use, and whether the Group has the right todirect the use of the identified asset.

— 23 —

2) Accounting treatment of leases
2.1) Leases in which Fast Retailing Group is the lessee
Separate from short-term leases or leases for which the underlying asset is of low value, the Group accounts for eachlease component within the contract as a lease and recognizes a right-of-use asset and a lease liability. On the date ofcommencement of a lease, the right-of-use asset is measured at cost, and the lease liability is calculated as the present valueof lease payments outstanding.
The cost of the right-of-use asset is mainly composed of the initial measurement of the lease liability, initial direct costs
and the amount of any prepaid lease payments. Furthermore, the discount rate used to calculate the present value oflease payments is the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee’s incremental
borrowing rate is used.
The lease term is determined as the non-cancelable period which includes an option to extend the lease (if it is reasonably
certain that the Group will exercise that option), or an option to cancel the lease (if it is reasonably certain that the Groupwill not exercise that option).
After the commencement date, the right-of-use asset is measured at cost less any accumulated depreciation and any
accumulated impairment losses. When depreciating right-of-use assets, the Group applies the depreciation requirements in
IAS 16 Property, Plant and Equipment. In addition, the Group applies IAS 36, Impairment of Assets, to determine whether theright-of-use asset is impaired and to account for any impairment loss identified.
Depreciation of right-of-use asset is measured from the commencement date to the end of the useful life of theunderlying asset if ownership of the underlying asset is to be transferred to the Group by the end of the lease term, or if it
is reasonably certain that the lessee purchase options will be exercised; otherwise the straight-line method will be used to
calculate depreciation from the commencement date to the earlier of the end of the useful life of the right-of-use asset orthe end of the lease term.
After the commencement date, the carrying amount of the lease liability is increased to reflect the interest rates on thelease liability and reduced to reflect any lease payments made. Furthermore, any reassessment or lease modifications, or toreflect revised in-substance fixed lease payments is remeasured.
The Group uses the straight-line basis to recognize any lease payments associated with short-term leases or leases forwhich an underlying asset is of low value.
2.2) Leases in which the Group is the lessor
The Group classifies a lease as either a finance lease or an operating lease at the inception of the lease contract.
To classify each lease, the Group comprehensively assesses whether all the risks and rewards incidental to ownership of
the underlying asset will be substantially transferred or not. If the risks and rewards value are to be transferred, the lease isclassified as a finance lease; if not, it is classified as an operating lease.
If the Group is acting as an intermediate lessor, the Group accounts for head leases and subleases separately. A subleaseclassification is determined by reference to the right-of-use asset arising from the head lease, rather than by reference to theunderlying asset.
The Group recognizes lease payments from operating leases as lease income on a straight-line basis over the lease term.
Lease payments from finance leases are recognized at the commencement date as assets held under finance leases andpresented as receivables at an amount equal to the net investment in the lease.

— 24 —

3) Treatment on transition
In applying IFRS 16, the Group applies the practical expedient in place of the judgments previously used to determine
whether or not a contract is a lease. Consequently, the requirements in IFRS 16 is applied only to contracts entered into orchanged on or after 1 September 2019.
3.1) Leases in which the Group is the lessee(Leases previously classified as operating leases applying IAS 17)
Lease liabilities on transition are measured at the present value of the remaining lease payments discounted using thelessee’s incremental borrowing rate as at 1 September 2019. In addition, right-of-use assets on transition are measured
using one of the following methods.
• Its carrying amount calculated on the assumption that IFRS 16 was applied from the commencement of the lease. Notethat the discount rate used is the lessee’s incremental borrowing rate on the date of initial application of IFRS 16.
• The amount measured for the lease liability, is adjusted by the amount of any prepaid or accrued lease payments.
Note that the followings apply when IFRS 16 is applied to leases that were previously classified as operating leases IAS 17.
• A single discount rate is applied to a portfolio of leases with reasonably similar characteristics.
• Leases for which the lease term ends within 12 months of the date of initial application of IFRS 16 are accounted for in
the same way as short-term leases.
• Initial direct costs are excluded from the measurement of right-of-use assets at the date of initial application of IFRS
16.
• The Group uses hindsight, such as in determining the lease term if the contract contains options to extend or
terminate the lease.
(Leases previously classified as operating leases applying IAS 17)
The Group accounts the carrying amount of the right-of-use asset and the lease liability at the date of initial application at
the amount of the lease asset and lease liability applying IAS 17 immediately prior to the date of initial application of IFRS 16.
3.2) Leases in which the Group is the lessor
Leases in which the Group acts as lessor require no adjustment on transition to IFRS 16, except for subleases. Subleases
will be accounted in accordance with the transition provisions under IFRS 16 as stated below.
• In applying IFRS 16, the Group classifies sublease transactions as at the date of initial application as either operatingleases or finance leases. This classification is determined based on the basis of the remaining contractual terms andconditions of the head lease and sublease at that date.
• Any subleases classified as operating leases applying IAS 17 but finance leases applying IFRS 16 are accounted for as
new finance leases entered into at the date of initial application.
4) Impact on condensed quarterly consolidated financial statements
With the application of IFRS 16, the Group recognized an additional 368,714 million yen in right-of-use assets, 420,488
million yen in lease liabilities and a decrease of 32,817 million yen in retained earnings in its interim condensed consolidated
statement of financial position at the start of the fiscal year.

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The weighted average of the lessee’s incremental borrowing rate applied to lease liabilities recognized in interim
condensed consolidated statement of financial position as at the date of initial application of IFRS 16 is 0.9%.
The major factors for the difference in the commitment amount related to operating leases applying IAS 17 disclosed ininterim condensed consolidated statement of financial position as at 31 August 2019 and the lease liabilities recognized ininterim condensed consolidated statement of financial position as at the date of initial application of IFRS 16 are as follows.
(Unit: Million Yen)
Minimum future lease payments for non-cancelable operating lease contracts (31 August 2019)344,888

Present value of non-cancelable operating lease contracts (31 August 2019)

337,009

Finance lease obligations (31 August 2019)

38,726

Extension or termination options that are reasonably certain to be exercised

4,751

Lease liabilities recognized in interim condensed consolidated statement of financial position
as at the date of initial application of IFRS 16

420,488(2) Application of IFRIC 23: Uncertainty over income tax treatments
IFRIC 23 interpretations are additional to the requirement of IAS 12 Income Taxes and establish accounting proceduresfor uncertain tax positions, such as items with no clear tax treatment or items related to matters that are not yet resolved
with the tax authorities. If it is determined that the tax treatment used by the Group is not likely to be approved by the tax
authorities, the Group’s calculation of taxable income will recognize additional taxable income in an amount equivalent to
the impact of that uncertainty, using either the most likely amount or expected value.
The application of IFRIC 23 does not have a significant impact on the Group’s condensed quarterly consolidated financial
statements.
4. Use of Estimates and Judgments
The preparation of the interim condensed consolidated financial statements requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets andliabilities, income and expenses. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The effects of the review of accounting
estimates are recognized in the accounting period in which the estimates were reviewed and in future accounting periods.
In principle, significant estimates and judgments that have significant effects on the amounts recognized in the interim
condensed consolidated financial statements are the same as those in the preceding fiscal year.

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5. Segment Information(i) Description of reportable segments
The Group’s reportable segments are components for which discrete financial information is available and which arereviewed regularly by the Board of Directors (the “Board”) to make decisions about the allocation of resources and to assess
performance.
The Group’s main retail clothing business is divided into four reportable operating segments: UNIQLO Japan, UNIQLOInternational, GU and Global Brands, each of which is used to frame and form Group’s strategy.
The main businesses covered by each reportable segment are as follows:
UNIQLO Japan: UNIQLO clothing business within Japan
UNIQLO International: UNIQLO clothing business outside of Japan
GU: GU clothing business in Japan and overseas
Global Brands: Theory, PLST, COMPTOIR DES COTONNIERS, PRINCESSE TAM.TAM and J Brand clothing operations(ii) Segment revenue and results
For the three months ended 30 November 2018
(Millions of yen)
Reportable segments
UNIQLOJapan

UNIQLOInternational

GU

GlobalBrands

Total

Others(Note 1)

Interim
Condensed
Adjustments
Consolidated(Note 2)
Statement ofProfit or Loss

Revenue

246,140

291,382

65,493

40,775643,792674—

644,466

Operating profit

37,95852,564

8,568

2,729

101,820

44

2,799

104,665

Segment income(i.e., profit
before income
taxes)

38,314

52,616

8,537

2,685

102,15445

8,887

111,086(Note 1) “Others” includes the real estate leasing business, etc.
(Note 2) “Adjustments” mainly includes revenue and corporate expenses which are not allocated to individual reportablesegments.
For the three months ended 30 November 2019
(Millions of yen)
Reportable segments
UNIQLOJapan

UNIQLOInternational

GU

GlobalBrands

Total

Others(Note 1)

Interim
Condensed
Adjustments
Consolidated(Note 2)
Statement ofProfit or Loss

Revenue

233,031

280,748

72,94936,113622,842642—

623,484

Operating profit/(losses)

38,557

37,836

12,376

1,870

90,639

(33)

1,084

91,690

Segment income/(losses)(i.e., profit/
losses before
income taxes)

39,45237,02012,3771,770

90,621(33)

11,427102,015(Note 1) “Others” includes the real estate leasing business, etc.
(Note 2) “Adjustments” mainly includes revenue and corporate expenses which are not allocated to individual reportablesegments.

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6. Inventories
Write-down of inventories to their net realizable values recognized in expenses is as follows:(Millions of yen)Three months ended Three months ended
30 November 2018 30 November 2019
Write-down of inventories to net realizable value

2,685

1,981

7. Property, Plant and Equipment
The breakdown of property, plant and equipment at each reporting date is as follows:(Millions of yen)
As at
31 August 2019
Buildings and structures
Furniture, equipment and vehicles
Land
Construction in progress
Lease assets (Note)
Total(Note)

As at
30 November 201994,65917,076
1,927
10,40438,024

107,946
19,813
1,927
4,896
—

162,092

134,583

With the application of IFRS 16 as at the first quarter of the current fiscal year, leased assets have been reclassified
and are presented under “right-of-use assets”.

8. Dividends
The total amount of dividends paid was as follows:
For the three months ended 30 November 2018
Total dividends(Millions of yen)

Resolution
Meeting of the Board on 2 November 2018

24,484

Dividends per share
(Yen)
240

Dividends were declared on 2 November 2018 and paid on 9 November 2018. The effective date of the dividend was forshareholders as at 31 August 2018.
For the three months ended 30 November 2019
Total dividends(Millions of yen)

Resolution
Meeting of the Board on 5 November 201924,494

Dividends per share
(Yen)
240

Dividends were declared on 5 November 2019 and paid on 8 November 2019. The effective date of the dividend was forshareholders as at 31 August 2019.

— 28 —

9. Revenue
The Group conducts its global clothing retail operations through both physical stores and e-commerce channels. The
following is a breakdown of total revenue by major regional market operation.
Three months ended 30 November 2018
(Millions of yen)
Revenue(Millions of yen)
Japan
Greater China
Other parts of Asia & Oceania
North America & Europe

246,140
134,848
90,375
66,158Percent of Total
(%)
38.2
20.9
14.0
10.3

UNIQLO (Note 1)

537,523

83.4

GU (Note 2)

65,493

10.2

Global Brands (Note 3)

40,775

6.3

674

0.1

644,466

100.0

Others (Note 4)
Total(Note 1) Revenue is classified by nation or region based on customer location.
The designated countries and regions are classified as follows:
Greater China:
Mainland China, Hong Kong, Taiwan
Other parts of Asia & Oceania:
South Korea, Singapore, Malaysia, Thailand, the Philippines, Indonesia, Australia
North America & Europe:
United States of America, Canada, United Kingdom, France, Russia, Germany,
Belgium, Spain, Sweden, the Netherlands(Note 2) Main national and regional market: Japan(Note 3) Main national and regional markets: North America, Europe, Japan(Note 4) The “Others” category includes real estate leasing operations.
Three months ended 30 November 2019
(Millions of yen)
Revenue(Millions of yen)
Japan
Greater China
Other parts of Asia & Oceania
North America & Europe

Percent of Total(%)

233,031
142,671
66,307
71,769

37.4
22.9
10.6
11.5

513,780

82.4

GU (Note 2)

72,949

11.7

Global Brands (Note 3)

36,113

5.8

UNIQLO (Note 1)

Others (Note 4)
Total

642

0.1

623,484

100.0(Note 1) Revenue is classified by nation or region based on customer location.
The designated countries and regions are classified as follows:
Greater China:
Mainland China, Hong Kong, Taiwan
Other parts of Asia & Oceania:
South Korea, Singapore, Malaysia, Thailand, the Philippines, Indonesia, Australia,
India
North America & Europe:
United States of America, Canada, United Kingdom, France, Russia, Germany,
Belgium, Spain, Sweden, the Netherlands, Denmark, Italy(Note 2) Main national and regional market: Japan(Note 3) Main national and regional markets: North America, Europe, Japan(Note 4) The “Others” category includes real estate leasing operations.

— 29 —

10. Selling, General and Administrative Expenses
The breakdown of selling, general and administrative expenses for each reporting period is as follows:(Millions of yen)Three months ended Three months ended
30 November 2018 30 November 2019
Selling, general and administrative expenses
Advertising and promotion
Rental expenses (Note)
Depreciation and amortization (Note)
Outsourcing
Salaries
Others

22,33052,65911,982
10,25475,27049,01921,92520,30243,067
11,94175,03851,823

Total

221,515224,098(Note)The decrease of rental expenses and the increase of depreciation and amortization are due to the application of
IFRS 16 Leases as mentioned in “Notes to the Interim Condensed Consolidated Financial Statements 3. Significant
Accounting Policies”.

— 30 —

11.

Other Income and Other Expenses
The breakdown of other income and other expenses for each reporting period is as follows:(Millions of yen)Three months ended Three months ended
30 November 2018 30 November 2019

Other income
Foreign exchange gains (Note)
Others
Total

1,534
417

3,317
766

1,951

4,083
(Millions of yen)Three months ended Three months ended
30 November 2018 30 November 2019
Other expenses
Loss on retirement of property, plant and equipment
Impairment losses
Others
Total(Note)

59
—
709

73
836
557

769

1,467

Currency adjustments incurred in the course of operating transactions are included in “other income”.

12. Finance Income and Finance Costs
The breakdown of finance income and finance costs for each reporting period is as follows:(Millions of yen)Three months ended Three months ended
30 November 2018 30 November 2019
Finance income
Foreign exchange gains (Note)
Interest income
Others
Total

5,030
2,482
48

9,297
2,910
11

7,560

12,219(Millions of yen)Three months ended Three months ended
30 November 2018 30 November 2019
Finance costs
Interest expenses
Total(Note)

1,139

1,894

1,139

1,894

Currency adjustments incurred in the course of non-operating transactions are included in “finance income”.

— 31 —

13. Earnings per ShareThree months ended 30 November 2018
Equity per share attributable to ownersof the Parent (Yen)
Basic earnings per share (Yen)
Diluted earnings per share (Yen)Three months ended 30 November 20199,180.49
720.16719.01Equity per share attributable to ownersof the Parent (Yen)
Basic earnings per share (Yen)
Diluted earnings per share (Yen)

9,685.06
694.73693.59(Note) The basis for calculation of basic earnings per share and diluted earnings per share is as follows:
Three months ended Three months ended
30 November 2018 30 November 2019
Basic earnings per share for the period
Profit for the period attributable to owners of the Parent (Millions of yen)
Profit not attributable to common shareholders (Millions of yen)
Profit attributable to common shareholders (Millions of yen)
Average number of common stock outstanding during the period (Shares)
Diluted earnings per share for the period
Adjustment to profit (Millions of yen)
Increase in number of common stock (Shares)(Number of share subscription rights included in increase)73,476—73,476
102,027,782

70,907—70,907102,064,495—
163,218(163,218)—
167,866(167,866)

14. Fair Value of Financial Instruments
Information about the carrying amount and fair value of financial instruments is as follows:(Millions of yen)
As at 31 August 2019
Carrying amounts
Financial assets
Security deposits and guarantees

As at 30 November 2019

Fair value

Carrying amounts

Fair value

62,39863,982

63,92464,932

Total

62,39863,982

63,92464,932Long-term borrowings (Note)
Corporate bonds (Note)

4,258
469,183

4,258
478,6384,388
469,223

4,388
474,240

Total

473,442482,896473,611478,628(Note) The amount above include the outstanding balance of borrowings and corporate bonds due within one year.
The fair values of current financial assets, current financial liabilities and non-current financial assets, which are measured
by amortized cost, approximate their carrying amounts.
The fair value of security deposits and guarantees is calculated on the basis of the current value, applying the current
market interest rate.
The fair value of corporate bonds is calculated with reference to publicly available market prices.
The fair value of long-term borrowings is classified by term, and are calculated on the basis of the current value, applying
a discount rate that takes into account the time remaining to maturity, and credit risk.
The fair value measurements of corporate bonds and long-term borrowings are classified as Level 2.

— 32 —

The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments. All assets andliabilities for which fair value is measured or disclosed in the interim condensed financial statements are categorized within
the fair value hierarchy based on the following characteristics:
Level 1 — based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement
is observable, either directly or indirectly
Level 3 — based on valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable
When multiple inputs are used to measure fair value, the fair value level is determined based on the input with the lowest
level classification in the overall fair value assessment.
The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments:(Millions of yen)
As at 31 August 2019
Financial assets measured at fair value
through other comprehensive income
Financial assets and financial liabilities designatedas hedging instruments — Fair value
Fair value

Level 1

Level 2

Level 3

Total

1,471

—

173

1,645

—

17,406—

17,406

1,471

17,406173

19,051(Millions of yen)

As at 30 November 2019
Financial assets measured at fair value
through other comprehensive income
Financial assets and financial liabilities designatedas hedging instruments — Fair value
Fair value

Level 1

Level 2

Level 3

Total

1,521

—

174

1,696

—

41,555—41,555

1,521

41,555

174

43,251For the valuation of Level 2 derivative financial instruments for which a market value is available, we use a valuation
model that uses observable data on the measurement date using inputs such as interest rates, yield curves, currency rates
and volatility in comparable instruments.
Financial instruments classified as Level 3 consist mainly of unlisted shares. The fair values of unlisted shares aremeasured by the division responsible in the Group according to the Group’s accounting policy, etc., using the immediately
preceding figures available for each quarter.
There were no significant changes due to the purchase, sale, issuance and settlement of Level 3 financial instruments, andno transfers between Levels 1, 2 and 3.

— 33 —

15. Commitments for Expenditures
The Group had the following commitments at each reporting date:(Millions of yen)
As at
31 August 2019
Commitment for the acquisition of property, plant and equipment
Commitment for the acquisition of intangible assets
Total

As at
30 November 2019

7,382
4,340

6,318
2,860

11,7239,179

16. Subsequent Events
Not applicable.

2. Others
Dividends
The Company resolved to pay dividends from retained earnings at the meeting of the Board convened on 5 November
2019.
The total amount of dividends paid and the amount per share are stated under “Financial Section 1. Interim Condensed
Consolidated Financial Statements, Notes to the Interim Condensed Consolidated Financial Statements 8. Dividends”.

— 34 —

(TRANSLATION)
INDEPENDENT ACCOUNTANT’S REVIEW REPORT

10 January 2020

To the Board of Directors of FAST RETAILING CO., LTD.:
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant
Koichi Okubo
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant
Hirofumi Otani
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant
Yohei Masuda
Pursuant to the first paragraph of Article 193-2 of the Financial Instruments and Exchange Act, we have reviewed the interim
condensed consolidated financial statements included in the Financial Section, namely, the interim condensed consolidated
statement of financial position of FAST RETAILING CO., LTD. (the “Company”) and its consolidated subsidiaries (collectively,
the “Group”) as at 30 November 2019 and the related interim condensed consolidated statements of profit or loss andcomprehensive income, statement of changes in equity and cash flows for the three-month period then ended, and the related
notes.
Management’s Responsibility for the Interim Condensed Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these interim condensed consolidated financial
statements in conformity with International Accounting Standard 34, “Interim Financial Reporting” (“IAS 34”), pursuant to
Article 93 of the “Rules Governing Term, Form and Preparation of Consolidated Quarterly Financial Statements”, and for suchinternal control as management determines is necessary to enable the preparation of interim condensed consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
Accountant’s responsibility
Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on ourreview. We conducted our review in accordance with quarterly review standards generally accepted in Japan. A review consists
principally of making inquiries, primarily of management and persons responsible for financial and accounting matters, andapplying analytical procedures and other quarterly review procedures. A review is substantially less in scope than an audit
conducted in accordance with auditing standards generally accepted in Japan. We believe that we have obtained the evidence
to provide a basis for our conclusion.
Accountant’s Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim condensed consolidated
financial statements referred to above do not present fairly, in all material respects, the condensed consolidated financial
position of the Company and its consolidated subsidiaries as at 30 November 2019, and the condensed consolidated results of
their operations and their cash flows for the three-month period then ended in conformity with IAS 34.
Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure is required under theprovisions of the Certified Public Accountants Act.

The above represents a translation, for convenience only, of the original report issued in the Japanese language.
— 35 —