FAST RETAILING CO., LTD.
迅銷有限公司First Quarterly Report 2018/19
2018.9.1–2018.11.30
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

18

(4)

Interim Condensed Consolidated Statement of
Cash Flows

20

OthersIndependent Accountant’s Review Report30
31

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)

Independent Directors
Principal Place of Business in Hong Kong

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

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

Directors
HDR Registrar and HDR Transfer Office

Takeshi Okazaki
Kazumi Yanai
Koji Yanai

Computershare Hong Kong Investor Services Limited
Shops 1712–1716,
17th Floor, Hopewell Centre
183 Queen’s Road East
WanchaiHong Kong

Audit & Supervisory Board Members
Akira Tanaka
Masaaki Shinjo
Takaharu Yasumoto (External)
Keiko Kaneko (External)
Takao Kashitani (External)

Stock CodeHong Kong: 6288
Japan: 9983

Joint Company Secretaries
Website Address

Japan: Mitsuru Ohki
Hong Kong: Choy Yee Man

https://www.fastretailing.com

External Independent Accountants
Deloitte Touche Tohmatsu LLC

Principal Banks
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, 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
Financial Summary

TermFirst Quarterof
57th YearFirst Quarterof
58th Year

57th Year

Accounting period

Three months
ended
30 November
2017

Three months
ended
30 November
2018Year ended
31 August
2018

Revenue (Millions of yen)

617,026

644,466

2,130,060

Operating profit (Millions of yen)

113,901

104,665

236,212

Profit before income taxes (Millions of yen)

117,832

111,086

242,678

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

78,54073,476

154,811Comprehensive income (loss) attributable to ownersof the Parent (Millions of yen)

88,56596,072

165,378

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

806,281

936,745862,936

Total assets (Millions of yen)

1,633,058

2,031,729

1,953,466

Basic earnings per share (Yen)770.11

720.16

1,517.71

Diluted earnings per share (Yen)768.99719.01

1,515,23

49.4

46.1

44.2

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

120,056

30,136

176,403

Net cash (used in) generated by investing activities (Millions of yen)

(5,390)(31,195)(57,180)

Net cash (used in) generated by financing activities (Millions of yen)

(16,600)(27,144)

198,217

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

788,898

979,087

999,697(Notes)1. FAST RETAILING CO., LTD. (the “Company” or “Parent”) prepared interim condensed consolidated financial
statements, and therefore has not included information regarding changes in key management indices for 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 2018.
In addition, there were no significant changes in the organizational structure, including the major subsidiaries, during the threemonths ended 30 November 2018.

—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 2018.
There have been no significant changes concerning business-related risks as stated in the annual report for the preceding
consolidated fiscal year.

2.

Financial Analysis(1)

Results of Operations
The Fast Retailing Group revenue rose but profit fell in the first quarter of fiscal 2019, or the three months from 1
September 2018 to 30 November 2018. Consolidated revenue reached 644.4 billion yen (+4.4% year-on-year) andoperating profit totaled 104.6 billion yen (-8.1% year-on-year). While UNIQLO International continued to expand favorably
and report consistent rises in both revenue and profit, UNIQLO Japan experienced a decline in both revenue and profit
as mild winter weather resulted in sluggish sales. That sluggish performance from UNIQLO Japan was largely responsible
for the decline in first-quarter consolidated profit. As a result, the consolidated gross profit margin declined by 1.0 point
year-on-year in the first quarter, and the selling, general and administrative expense ratio rose by 1.3 points. A net gainof 6.4 billion yen was recorded under finance income/cost after the spot foreign exchange rate at the end of November
closed below the spot rate at the start of the business term, increasing the carrying amount of our long-term foreigncurrency denominated assets in yen terms. As a result, profit before income taxes declined to 111.0 billion yen (-5.7%
year-on-year) and profit attributable to owners of the parent decreased to 73.4 billion yen (-6.4% 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 and our GU casual fashion brand. We continue to increase
UNIQLO store numbers in each country where we operate, and open global flagship stores and large-format storesin major cities around the world to help consolidate UNIQLO’s position as a key global brand. Within the UNIQLOInternational segment, Greater China (Mainland China, Hong Kong and Taiwan) and Southeast Asia are entering a newstage of growth as key drivers of operational growth for the Fast Retailing Group. In addition, UNIQLO USA is working
solidly towards turning a profit in fiscal 2019. In terms of the GU operation, we plan to open more GU stores in Japan,
while expanding the brand’s international presence, primarily in Greater China and South Korea.
UNIQLO Japan
UNIQLO Japan reported declines in both revenue and profit in the first quarter of fiscal 2019, with revenue totaling
246.1 billion yen (-4.3% year-on-year) and operating profit totaling 37.9 billion yen (-29.9% year-on-year). First-quartersame-store sales, including online sales, declined 4.3% year-on-year. While new ranges and trendy products such as
premium lambswool sweaters, boa fleece sweatshirts, fluffy fleece, and knitted coats sold well, sales of core Winter items
struggled overall in the face of especially mild weather in October and November. Conversely, online sales expandedby an impressive 30.9% year-on-year, increasing the proportion of online sales from 7.0% to 9.7% of total sales. On the
profit front, the continued rise in cost of sales due to a weakening in internal yen exchange rates, along with stronger
discounting of Winter items resulted in a 3.2 point decline in the gross profit margin year-on-year. Meanwhile, the selling,
general and administrative expense ratio increased by 2.2 points year-on-year on the back of higher distribution costs,
and higher depreciation costs in relation to the automation of the Ariake warehouse.
UNIQLO International
UNIQLO International revenue and profit rose in the first quarter of fiscal 2019, with revenue totaling 291.3 billion yen(+12.8% year-on-year) and operating profit increasing to 52.5 billion yen (+12.6% year-on-year). UNIQLO International
revenue and profit far outstripped that of UNIQLO Japan in the first quarter, making it the largest business segment in theFast Retailing Group. In terms of individual markets, UNIQLO Greater China reported higher revenue and profits despite
the mild winter weather. The operation in Mainland China continued strong, reporting double-digit growth in operating
profit. Mainland China also achieved further double-digit growth in online sales, thanks to efforts to smoothly unify
physical and online store operations. UNIQLO South Korea reported higher operating profit in the first quarter on theback of stricter discounting, and greater operational efficiency achieved through the use of RFID tags. UNIQLO Southeast
Asia & Oceania reported higher revenue and profit thanks to strong same-store sales rises in all markets. UNIQLO USA
reported significant increases in both revenue and profit on the back of a successful review of regional product mixes
and continued strong online sales growth, and efforts to help the operation turn a profit in the current financial year areproceeding smoothly. UNIQLO Europe also reported strong rises in both revenue and profit, with Russia generating anespecially strong performance. UNIQLO opened its first store in the Netherlands in Amsterdam in September 2018, and its
biggest Southeast Asian global flagship store in Manila, the Philippines in October 2018.
—5—

GU
The GU business segment reported a rise in revenue but a fall in profit in the first quarter of fiscal 2019, with revenue
climbing to 65.4 billion yen (+7.7% year-on-year) and operating profit declining to 8.5 billion yen (-4.9% year-on-year).
The gross profit margin declined slightly, and business costs increased on stronger advertising and promotion activities,
resulting in a slight decline in operating profit. However, revenue picked up following decisions to start focusing on masstrend items and recommence TV advertising to strengthen GU marketing. Sales of advertising campaign items such as
sweat shirts and oversized knitted products were especially buoyant, and outerwear sales picked up sharply once thetemperature started to drop.
Global Brands
Global Brands revenue rose but profit fell in the first quarter of fiscal 2019. Revenue rose to 40.7 billion yen (+1.8% yearon-year), while operating profit declined to 2.7 billion yen (-9.9% year-on-year). The Theory fashion operation reported
a considerable increase in profit, thanks to strong sales, and subsequent reduced discounting losses, at the Theory
label operation in the United States. Our Japan-based PLST brand, which offers elegant, versatile everyday fashion of
the highest quality, generated higher revenue. However, PLST operating profit dipped slightly due to increased costs
associated with higher new store openings. Comptoir des Cotonniers, Princesse tam.tam and J Brand reported continued
losses in the first quarter.
Sustainability
In keeping with our key sustainability message “Unlocking the power of clothing,” Fast Retailing seeks to contribute to
the sustainable development of global society through our core clothing business. Fast Retailing’s sustainability activities
seek to promote human rights, environmental protection and broader social contributions within six clear material areas:
Create new value through products and services; Respect human rights in our supply chain; Respect the environment;
Strengthen communities; Support employee fulfillment, and; Corporate governance. In October 2018, Fast Retailing
signed the United Nations Global Compact (UNGC), as set of 10 universal sustainability principles that companies agree toadhere to under the four categories of Human Rights, Labor, Environment and Anti-Corruption.
On specific product-related initiatives, the Fast Retailing Group’s Jeans Innovation Center in Los Angeles has developed
technologies that can greatly reduce the huge volume of water used in jeans processing by using nanobubble and ozone
washing machines and highly skilled jeans designer techniques. As a result, we were able to reduce the amount of waterused to make 2018 Fall Winter Men’s regular fit jeans by a maximum 99%, and an average of over 90%, compared to the2017 product. We intend to introduce this water-conserving technology for all jeans produced and retailed under the Fast
Retailing Group umbrella by 2020, and start expanding production.
In November 2018, we published a list of UNIQLO core fabric mills to complement the existing lists of core UNIQLO andGU production partners, as part of our ongoing commitment to increase transparency across our supply chain to help
protect the environment, ensure proper working conditions for all, and safeguard human rights. In addition to inspecting
working conditions at these core fabric mills, factory wastewater uis regularly tested help eliminate the discharge ofhazardous chemicals. We are also working to introduce the Higg Index at fabric mills, a suite of tools developed by theleading industry alliance, the Sustainable Apparel Coalition (SAC), to help reduce the environmental impact of factories byreducing reduce energy and water consumption.
As part of our initiatives to strengthen communities, we donated 17,700 items of UNIQLO and GU clothing (as ofNovember 2018) as emergency aid to victims of the September 2018 earthquake in Hokkaido. In November 2018, we alsodelivered approximately 90,000 items of clothing to Venezuelan refugees and immigrants in Columbia as part of our AllProduct Recycling Initiative to deliver secondhand clothing collected in UNIQLO and GU store recycling boxes to people
around the world in need of clothes. We also offer support for refugees that help foster independence. In November
2018, the Foundation for the Welfare and Education of the Asian People (FWEAP) recognized the achievements of one of
the refugee staff working as a local-store, full-time UNIQLO Japan employee, and sent UNIQLO a thank you letter praising
our refugee support activities, and efforts to promote the permanent settlement of refugees.

—6—

Financial Position
Total assets as at 30 November 2018 were 2,031.7 billion yen, which was an increase of 78.2 billion yen relative to theend of the preceding consolidated fiscal year. The principal factors were a decrease of 20.6 billion yen in cash and cash
equivalents, an increase of 76.4 billion yen in trade and other receivables, an increase of 14.1 billion yen in other financial
assets, a decrease of 11.8 billion yen in inventories and an increase of 20.7 billion yen in derivative financial assets.
Total liabilities as at 30 November 2018 were 1050.4 billion yen, which was a decrease of 0.1 billion yen relative to theend of the preceding consolidated fiscal year. The principal factors were a decrease of 7.3 billion yen in trade and otherpayables, a decrease of 20.0 billion yen in other financial liabilities, an increase of 15.4 billion yen in current tax liabilities
and an increase of 12.9 billion yen in other current liabilities.
Total net assets as at 30 November 2018 were 981.2 billion yen, which was an increase of 78.4 billion yen relative tothe end of the preceding consolidated fiscal year. The principal factors were an increase of 48.9 billion yen in retained
earnings and an increase of 22.5 billion yen in other components of equity.
(2)

Cash Flows Information
Cash and cash equivalents as at 30 November 2018 had decreased by 20.6 billion yen from the end of the preceding
consolidated fiscal year, to 979.0 billion yen.
(Operating Cash Flows)
Net cash generated by operating activities for the three months ended 30 November 2018 was 30.1 billion yen, which
was a decrease of 89.9 billion yen (-74.9% year-on-year) from the three months ended 30 November 2017. The principal
factors were an increase of 74.3 billion yen in trade and other receivables (an increase of 6.5 billion yen from the threemonths ended 30 November 2017), a decrease of 15.5 billion yen in inventories (an increase of 23.7 billion yen from thethree months ended 30 November 2017), a decrease of 10.5 billion yen in trade and other payables (an increase of 33.0
billion yen from the three months ended 30 November 2017), a decrease of 1.3 billion yen in other assets (an increaseof 42.0 billion yen from the three months ended 30 November 2017), a decrease of 10.6 billion yen in other liabilities (adecrease of 199.9 billion yen from the three months ended 30 November 2017) and 13.8 billion yen in income taxes paid
(an increase of 7.4 billion yen from the three months ended 30 November 2017).
(Investing Cash Flows)
Net cash used in investing activities for the three months ended 30 November 2018 was 31.1 billion yen, which was
an increase of 25.8 billion yen (+478.8% year-on-year) from the three months ended 30 November 2017. The principal
factors were 12.0 billion yen in bank deposits with original maturity over three months (an increase of 20.8 billion yen
from the three months ended 30 November 2017) and 12.1 billion yen in payments for property, plant and equipment (anincrease of 4.2 billion yen from the three months ended 30 November 2017).
(Financing Cash Flows)
Net cash used in financing activities for the three months ended 30 November 2018 was 27.1 billion yen, which was anincrease of 10.5 billion yen (+63.5% year-on-year) from the three months ended 30 November 2017. The principal factors
were 24.4 billion yen in dividends paid to owners of the Parent (an increase of 6.6 billion yen from the three months
ended 30 November 2017) and 0.4 billion yen in capital contributions from non-controlling interests (an increase of 3.2
billion yen from the three months ended 30 November 2017).

—7—

(3)

Operational and Financial Assignment
There have been no significant changes during the three months ended 30 November 2018 concerning issues that must
be addressed by 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 2018.
<Subsidiaries in Japan>
Not applicable.
<Overseas Subsidiaries>
Company name

Type of facility

Name of business

Location

Completion date

FAST RETAILING PHILIPPINES, INC.

UNIQLOInternational StoreUNIQLO Manila
Global Flagship
Store

Manila,Philippines

October 2018

UNIQLO CANADA INC.

UNIQLOInternational Store

Uniqlo Vaughan
Mills

Vaughan,CanadaSeptember 2018

UNIQLO EUROPE LIMITEDUNIQLOInternational StoreUNIQLO Köln

Cologne,Germany

October 2018

UNIQLO EUROPE LIMITEDUNIQLOInternational Store

Uniqlo Kalverstraat

Amsterdam,
The Netherlands

September 2018

The following are the significant facilities that were newly planned during the three months ended 30 November 2018.
<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

May 2018

January 2019

Plannedsales floor

Referencearea (m2)yen)
UNIQLOUNIQLOHAWAII

International

INC.

Store

(Notes)3.

Uniqlo Ala

Hawaii,

Moana

USA

558

62

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—

559

Lease hold

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

Total number of shares
Type

Total number of authorized shares (Shares)

Common stock

300,000,000
Total

(ii)

300,000,000

Shares Issued

Type

As at 30 November 2018

Number of shares issued
as of submission date
(Shares)(As at 11 January 2019)

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 2018 are as follows:(i)

9th Share subscription rights A type

Resolution date

11 October 2018

Class and number of recipients (Persons)

Employees of the Company
Employees of Group subsidiaries

Number of stock options (Shares)

4,057

Number of share subscription rights for treasury stock(Shares)

17
32—

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)

4,057

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 9 November 2021
to 8 November 2028

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 right toacquire 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 substitute payments

58,27629,138—Matters pertaining to issuing of share subscription rights
in conjunction with reorganization(Note)—9—

(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;
provided, however, 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)

9th Share subscription rights B type

Resolution date

11 October 2018

Class and number of recipients (Persons)

Employees of the Company
Employees of Group subsidiaries

Number of stock options (Shares)

36,275

Number of share subscription rights for treasury stock(Shares)

419
1,267

—

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)

36,275

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 9 December 2018
to 8 November 2028

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 right toacquire 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 substitute payments

58,89229,446—

Matters pertaining to issuing of share subscription rights
in conjunction with reorganization(Note)(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;
provided, however, 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.

— 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.

9th Share subscription rights C type

Resolution date

11 October 2018

Class and number of recipients (Persons)

Employees of the Company

Number of stock options (Shares)

4,733

Number of share subscription rights for treasury stock(Shares)

40—

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)

4,733

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

9 November 2021

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 right toacquire 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 substitute payments

59,76429,882—Matters pertaining to issuing of share subscription rights
in conjunction with reorganization(Note)(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;
provided, however, 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 2018 to
30 November 2018

Increase
Increase
Balance of total(decrease) of(decrease) of
number of
total number ofcapital stock
shares issued
shares issued(Millions(Shares)(Shares)of 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 increase or decrease in the total number of shares issued, capital stock or capital reserve during the threemonths ended 30 November 2018.

— 13 —

(5)Principal Shareholders
There are no items to disclose during the three months ended 30 November 2018.

(6)

Voting Rights
Concerning “Voting Rights” as at the end of the three months ended 30 November 2018, 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 of the immediately preceding record date (31 August 2018).

(i)

Shares issued
As at 30 November 2018
Number of shares(Shares)Number of voting
rights (Number)

Remarks

Non-voting shares

—

—

—

Shares subject to restrictions on voting rights(treasury stock)

—

—

—

Shares subject to restrictions on voting rights(others)———

Shares with full voting rights(treasury stock, etc.)(Shares held astreasury stock)
Common stock
4,053,800——

Shares with full voting rights (others)

Common stock
101,961,100

Class

Common stock

Shares less than one unit

58,756

Total number of shares issued

106,073,656

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

1,019,611(Note) 1—(Notes) 1,2——
1,019,611—

1. The columns for the number of shares of “Shares with full voting rights (others)” 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 72 shares of treasury stock held by the Company.

Treasury StockAs at 30 November 2018

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

2.

Holder’s address

717-1 Sayama,
Yamaguchi-shi,
Yamaguchi—

Number ofshares heldin own name(Shares)Number ofshares held inother’s name(Shares)

Total numberof shares held
(Shares)

Ratio oftotal number ofshares held tototal number ofshares issued (%)

4,053,800—

4,053,800

3.82

4,053,800—

4,053,800

3.82

Directors
Since the submission of the year-end report for the preceding consolidated fiscal year, there has been no change ofdirectors during the three months ended 30 November 2018.

— 14 —

5. Financial Section
1.

Preparation of Interim Condensed Consolidated Financial Statements
The interim condensed consolidated financial statements of the Group were prepared in compliance 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” (2007 Cabinet Office Ordinance No. 64, hereinafterreferred 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

As at 31 August 2018

As at 30 November 2018

999,697
52,67735,359464,788
35,5191,702
28,353

979,087
129,146
49,536452,891
56,303
1,468
23,621

1,618,097

1,692,055

155,077
8,092
46,002
79,476

160,702
8,092
51,03476,920

Other assets

14,64926,378
5,691

14,552
19,0309,341

Total non-current assets

335,368

339,673

1,953,466

2,031,729

214,542
171,854
6,917
21,503
11,86872,722

207,222
151,848
1,307
36,921
12,64085,654499,410495,595

502,671
18,912
13,003
16,690504,791
19,16813,307
17,63114
6
14

Other assets
Total current assets
Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Financial assets
Investments in associates accounted
for using the equity method
Deferred tax assets

7

14

Total assets
Liabilities and equity
LIABILITIESCurrent liabilities
Trade and other payables
Other financial liabilities
Derivative financial liabilities
Current tax liabilities
Provisions

14
14

Other liabilities
Total current liabilities
Non-current liabilities
Financial liabilities
Provisions
Deferred tax liabilities

14

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— 16 —

551,277554,899

1,050,688

1,050,494

10,273
18,275815,146(15,429)
34,66910,273
20,433864,138(15,365)
57,265

862,936
39,841

936,745
44,489902,777

981,234

1,953,466

2,031,729

(2)Interim Condensed Consolidated Statement of Profit or Loss and Interim Condensed Consolidated Statement ofComprehensive Income
Interim Condensed Consolidated Statement of Profit or Loss
(Millions of yen)
Notes

RevenueThree months ended
30 November 2017

9

Three months ended
30 November 2018

617,026(299,961)

644,466(319,658)

317,065(204,226)
1,111
(221)

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

173

189

113,901
4,566
(635)

104,665
7,560(1,139)

Income tax expense

117,832(33,186)

111,086(30,801)

Profit for the period

84,64680,28578,5406,10673,476
6,808

84,64680,285770.11
768.99720.16719.01

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(Millions of yen)Three months ended
30 November 2017

Three months ended
30 November 2018

Profit for the period
Other comprehensive income (loss), 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
Net fair value gain (loss) on available-for-sales
financial assets during the period
Exchange differences on translating
foreign operations
Cash flow hedges
Share of other comprehensive income of associates
Total items that may be reclassified
subsequently to profit or loss

84,64680,285

—

(116)

—

(116)

(50)

—

7,143
3,775
—

6,835
16,80718

10,86823,662Other comprehensive income (loss), net of income tax

10,86823,54595,515

103,831

Non-controlling interests

88,565
6,950

96,072
7,759

Total comprehensive income (loss) for the period

95,515

103,831

Total comprehensive income (loss) for the period
Attributable to:
Owners of the Parent(3)

Interim Condensed Consolidated Statement of Changes in Equity
For the three months ended 30 November 2017
(Millions of yen)
Other components of equity

Net changes during the period
Comprehensive income (loss)
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
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 2017

Share of othercomprehensive
Cash flow
income ofhedge reserve associates
2,293—

Note Capital stock Capital surplus

Retainedearnings

10,273

14,373

698,584(15,563)2

21,806——78,540

—

—

—

—

—

—
—

—
—

—
78,540

—
—

(50)
(50)

5,500
5,500

4,574
4,574

—
—
—

92
—
1,814

—
(17,847)
—

11
—
—

—
—
—

—
—
—

—

1,874

—

—

—

—

3,782

(17,847)

11—
10,273

3,782
18,15560,692759,27611(15,552)

As at 1 September 2017

8

Treasury stock, Available-forat costsale reserve

Foreigncurrencytranslation
reserve

Total
24,102Equityattributable toownersof theNon-controlling
Parentinterests

Total
equity731,770

30,272762,043—

78,5406,106

84,646——

10,025
10,025

10,02588,565843
6,950

10,86895,515

—
—
—

—
—
—

—
—
—

103
(17,847)
1,814—(2,269)—103(20,116)
1,814

—

—

—

—

1,874

1,754

3,629

—

—

—

—

—

(14,053)(514)(14,567)

(50)
(47)

5,500
27,307

4,574
6,868

—
—

10,02534,12774,511
806,281

6,435
36,70880,947
842,990— 18 —

For the three months ended 30 November 2018
(Millions of yen)
Other components of equity

As at 1 September 2018
Net changes during the period
Comprehensive income (loss)
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 costincomeForeigncurrencytranslation
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

8

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 —

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

Three months ended
30 November 2017

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

Three months ended
30 November 2018

117,832
9,927(1,741)635(2,824)

111,086
11,982(2,530)1,139(5,030)

(173)

(189)

100

59

(80,878)(8,229)(43,619)(40,649)
189,307258(74,305)
15,510(10,562)
1,396(10,640)
3,988

Income taxes paid

139,943
1,715(303)(21,299)

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

Net cash generated by operating activities

120,056

30,136(2,348)(29,175)

11,206(7,940)(3,110)(1,490)17,153(12,176)(5,912)(1,346)635(2,342)858(595)(5,390)(31,195)

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 lease and guarantee deposits
Proceeds from collection of lease andguarantee deposits
Others, net
Net cash (used in) generated byinvesting activities— 20 —

(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 lease obligations

Three months ended
30 November 20178

Others, net
Net cash (used in) generated byfinancing activities
Effect of exchange rate changes on the balanceof cash held in foreign currencies
Net increase (decrease) in cash andcash equivalents
Cash and cash equivalents at the beginningof period
CASH AND CASH EQUIVALENTS AT THE END
OF PERIOD— 21 —

Three months ended
30 November 2018

1,123
(767)
(17,800)

1,257
(967)
(24,455)

3,629
(270)
(2,384)
(130)

420
(560)
(2,878)39(16,600)(27,144)

7,030

7,594

105,096(20,609)683,802

999,697788,898

979,087

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(casual clothing retail business operating under the “UNIQLO” brand in Japan and overseas), GU business, and Theory
business (apparel design and retail business 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 2018.
The interim condensed consolidated financial statements were approved on 11 January 2019 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 2018 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 9Financial Instruments

Revisions to financial asset classification and measurement,
hedge accounting, and impairment.

IFRS 15

Revenue from Contracts with
Customers

A comprehensive framework for revenue recognition(1) Application of IFRS 9: Financial Instruments① Financial instruments: Classification and measurement
The Group began classifying equity instruments that used to be classified as “Available-for-sale financial assets” as“Financial assets measured at fair value through other comprehensive income” from the beginning of the consolidated fiscal
year ending 31 August 2019. Accordingly, the Group reclassified those equity instruments out of “Available-for-sale financial
assets” and into “Financial assets measured at fair value through other comprehensive income” in the Interim Condensed
Consolidated Statement of Changes in Equity from the beginning of the consolidated fiscal year ending 31 August 2019.
The Group has not chosen to apply the full retrospective application of IFRS 9 on the consolidated financial statements forthe consolidated fiscal year ended 31 August 2018 in accordance with the transition provisions set out in IFRS 9.
② Financial instruments: Impairment
The Group has changed the recognition of impairment of financial assets measured at amountized cost to recognize a loss
allowance for expected credit losses on those financial assets.

— 22 —

③ Financial instruments: Hedge accounting
The Group applies IFRS 9 hedge accounting standards and considers the fulfilment of specific hedge accounting
requirements under IAS 39, Financial Instruments: Recognition and Measurement and IFRS 9 as incremental parts of aconsistent hedge accounting policy.
The application of IFRS9 has not had a significant impact on the financial position and/or financial performance of theGroup for the three months ended 30 November 2018.
(2) Application of IFRS 15: Revenue from contracts with customers
The Group recognizes revenue in accordance with IFRS 15 by applying the following five-step approach:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
As the developer of global clothing retail operations, the Group recognizes revenue when it satisfies its performanceobligation by transferring the promised goods to the customer. An asset is transferred when the customer obtains control ofthat asset. In addition, the Group recognizes revenue at amount of the promised considerations that the customer would pay
in accordance with a contract, less the sum of discounts, rebates, and refunds or credits.
The application of IFRS 15 has not had a significant impact on the financial position and/or financial performance of theGroup for the three months ended 30 November 2018.
4. Use of Estimates and Judgments
The preparation of the interim condensed consolidated financial statements in accordance with IAS 34 requires
management to make judgments, estimates and assumptions that affect the application of accounting policies and thereported amounts of assets and liabilities, 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 consolidated fiscal year.

— 23 —

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, COMPTOIR DES COTONNIERS, PRINCESSE TAM.TAM and J Brand clothing operations(ii) Segment revenue and results
For the three months ended 30 November 2017
(Millions of yen)
Reportable segments
UNIQLOJapan

UNIQLOInternational

GU

GlobalBrands

Total

Others(Note 1)

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

Revenue

257,068

258,283

60,81540,052616,218808—

617,026

Operating profit

54,113

46,671

9,011

3,030

112,82633

1,041

113,901

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

54,09946,817

8,995

3,041

112,953

33

4,845

117,832(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 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(losses)(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.

— 24 —

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 2017 30 November 2018
Write-down of inventories to net realizable value

2,596

2,685

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 2018
Buildings and structures
Furniture, equipment and vehicles
Land
Construction in progress
Lease assets
Total

As at
30 November 2018

94,67314,143
1,927
9,550
34,782

100,695
16,683
1,927
5,495
35,899155,077

160,702

8. Dividends
The total amount of dividends paid was as follows:
For the three months ended 30 November 2017
Total dividends(Millions of yen)

Resolution
Meeting of the Board on 2 November 2017

17,847

Dividends per share
(Yen)
175

Dividends were declared on 2 November 2017 and paid on 10 November 2017. The effective date of the dividend was forshareholders as of 31 August 2017.
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 of 31 August 2018.

— 25 —

9. Revenue
The Group performs 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

Percent of Total(%)

246,140
134,848
90,375
66,158

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 followed:
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, 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.
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 2017 30 November 2018
Selling, general and administrative expenses
Advertising and promotion
Rental expenses
Depreciation and amortization
Outsourcing
Salaries
Others21,36451,053
9,927
9,198
69,91342,76822,33052,65911,982
10,25475,27049,019Total

204,226

221,515— 26 —

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 2017 30 November 2018
Other income
Foreign exchange gains (Note)
Others
Total

845
265

1,534
417

1,111

1,951
(Millions of yen)Three months ended Three months ended
30 November 2017 30 November 2018
Other expenses
Loss on retirement of property, plant and equipment
Others
Total(Note)

100
121

59
709

221

769

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 2017 30 November 2018
Finance income
Foreign exchange gains (Note)
Interest income
Others
Total

2,824
1,741
0

5,030
2,482
48

4,566

7,560
(Millions of yen)Three months ended Three months ended
30 November 2017 30 November 2018
Finance costs
Interest expenses
Total(Note)

635

1,139

635

1,139

Currency adjustments incurred in the course of non-operating transactions are included in “finance income.”— 27 —

13. Earnings per ShareThree months ended 30 November 2017
Equity per share attributable to ownersof the Parent (Yen)
Basic earnings per share (Yen)
Diluted earnings per share (Yen)Three months ended 30 November 2018
7,905.74
770.11
768.99Equity per share attributable to ownersof the Parent (Yen)
Basic earnings per share (Yen)
Diluted earnings per share (Yen)

9,180.49
720.16719.01(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 2017 30 November 2018
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)78,540—78,540101,985,476

73,476—73,476
102,027,782—
148,315(148,315)—
163,218(163,218)

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 2018
Carrying amounts
Financial assets
Security deposits and guarantees

As at 30 November 2018

Fair value

Carrying amounts

Fair value

61,75262,25362,86864,107

Total

61,75262,25362,86864,107

Financial liabilities
Long-term borrowings (Note)
Corporate bonds (Note)
Lease obligations (Note)

8,884
499,020
35,6438,924
501,708
35,5289,079
499,064
37,967

9,121
501,548
37,830

Total

543,548546,161

546,110548,499(Note) The above includes the outstanding balance of borrowings 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 and finance lease obligations are classified by term, and are calculated on the basisof 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, long-term borrowings and lease obligations are classified as Level 2.

— 28 —

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 2018

Level 1

Level 2

Level 3

Total

Available-for-sale financial assets
Financial instruments at fair value throughprofit or loss (“FVTPL”)
Foreign currency forward contracts designatedas hedging instruments

2,513

—

—

2,513

—

136

—

136

—

28,464—28,464

Total

2,513

28,601—

31,114(Millions of yen)

As at 30 November 2018
Financial assets measured at fair value
through other comprehensive income
Financial instruments at FVTPL
Foreign currency forward contracts designatedas hedging instruments
Total

Level 1

Level 2

Level 3

Total

2,348

—

161

2,509

—

13

—

13

—

54,983—54,983

2,348

54,996

161

57,506

For 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.
Most of the financial assets classified as Level 3 are unlisted shares. The fair value of unlisted shares is measured on aquarterly basis by management in accordance with Group accounting policy using the latest available data.
This does not involve any significant change relating to Level 3 purchases, sales, issuance or settlement, nor any transfer
between Level 1, 2 or 3.
There were no transfers between levels of fair value measurements during the year ended 31 August 2018 and the threemonths ended 30 November 2018.

— 29 —

15. Commitments for Expenditures
The Group had the following commitments at each reporting date:(Millions of yen)
As at
31 August 2018
Commitment for the acquisition of property, plant and equipment
Commitment for the acquisition of intangible assets
Total

As at
30 November 2018

10,046
1,461

6,101
6,847

11,50812,948

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 2 November
2018.
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”.

— 30 —

(TRANSLATION)
INDEPENDENT ACCOUNTANT’S REVIEW REPORT
January 11, 2019
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 of 30 November 2018 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 of 30 November 2018, 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.

— 31 —