Fast Retailing Co., Ltd. — Earnings Release 2018

Oct 11, 2018

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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FAST RETAILING CO., LTD. 迅銷有限公司

(Incorporated in Japan with limited liability)

(Stock Code: 6288)

ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 AUGUST 2018

AND

RESUMPTION OF TRADING

The board of directors (the “Board”) of FAST RETAILING CO., LTD. (the “Company” or “Parent”) is pleased to announce the consolidated results of the Company and its subsidiaries (collectively the “Group”) for the year ended 31 August 2018 together with the comparative figures for the year ended 31 August 2017.

At the request of the Company, trading in its Hong Kong depositary receipts on the Stock Exchange was halted with effect from 1:00 p.m. on Thursday, 11 October 2018, pending the release of this announcement. An application will be made by the Company to the Stock Exchange for resumption of trading in the Hong Kong depositary receipts with effect from 9:00 a.m. on Friday, 12 October 2018.

(Amounts are rounded down to the nearest million Japanese Yen unless otherwise stated.)

1. CONSOLIDATED FINANCIAL RESULTS

The consolidated financial results were prepared in accordance with International Financial Reporting Standards (“IFRS”).

(1) Consolidated Operating Results (1 September 2017 to 31 August 2018)

(1) Consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Consolidated Operating Results (1 September 2017 to 31 August 2018)
(Percentages represent year-on-year changes)
	Revenue		Operating profit		Profit before income taxes		Profit for the year
Year ended 31 August 2018 Year ended 31 August 2017	Millions of yen 2,130,060 1,861,917	% 14.4 4.2	Millions of yen 236,212 176,414	% 33.9 38.6	Millions of yen 242,678 193,398	% 25.5 114.3	Millions of yen 169,373 128,910	% 31.4 138.4
	Profit attributable to owners of the Parent		Total comprehensive income for the year		Basic earnings per share		Diluted earnings per share
Year ended 31 August 2018 Year ended 31 August 2017	Millions of yen 154,811 119,280	% 29.8 148.2	Millions of yen 180,858 202,059	% (10.5) —	Yen 1,517.71 1,169.70		Yen 1,515.23 1,168.00

1

	Ratio of profit to equity attributable to owners of the Parent	Ratio of profit before income taxes to total assets	Ratio of operating profit to revenue
Year ended 31 August 2018 Year ended 31 August 2017	% 19.4 18.3	% 14.5 14.7	% 11.1 9.5

(Note) Share of profits and losses of associates Year ended 31 August 2018: 611 million yen

Year ended 31 August 2017: 625 million yen

(2) Consolidated Financial Position

(2) Consolidated Financial Position
	Total assets	Total equity	Equity attributable to owners of the Parent	Ratio of equity attributable to owners of the Parent to total assets	Equity per share attributable to owners of the Parent
As at 31 August 2018 As at 31 August 2017	Millions of yen 1,953,466 1,388,486	Millions of yen 902,777 762,043	Millions of yen 862,936 731,770	% 44.2 52.7	Yen 8,458.52 7,175.35

(3) Consolidated Cash Flows

	Net cash from operating activities	Net cash from/(used in) investing activities	Net cash from/(used in) financing activities	Cash and cash equivalents at the end ofyear
Year ended 31 August 2018 Year ended 31 August 2017	Millions of yen 176,403 212,168	Millions of yen (57,180) 122,790	Millions of yen 198,217 (50,836)	Millions of yen 999,697 683,802

2. DIVIDENDS

	Dividendsper share	Dividendsper share	Dividendsper share	Dividendsper share	Dividendsper share	Total dividends (annual)	Payout ratio (consolidated)	Ratio of dividend to equity attributable to owners of the Parent (consolidated)
	First quarter period end	Second quarter period end	Third quarter period end	Year-end	Full year
Year ended 31 August 2017 Year ended 31 August 2018	Yen — —	Yen 175.0 200.0	Yen — —	Yen 175.0 240.0	Yen 350.0 440.0	Millions of Yen 35,693 44,886	% 29.9 29.0	% 5.5 5.6
Year ending31 August 2019(forecast)	—	240.0	—	240.0	480.0		29.7

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3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2019 (1 SEPTEMBER 2018 TO 31 AUGUST 2019)

3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2019 (1 SEPTEMBER 2018 TO 31 AUGUST 2019)	3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2019 (1 SEPTEMBER 2018 TO 31 AUGUST 2019)	3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2019 (1 SEPTEMBER 2018 TO 31 AUGUST 2019)	3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2019 (1 SEPTEMBER 2018 TO 31 AUGUST 2019)	3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2019 (1 SEPTEMBER 2018 TO 31 AUGUST 2019)	3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2019 (1 SEPTEMBER 2018 TO 31 AUGUST 2019)	3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2019 (1 SEPTEMBER 2018 TO 31 AUGUST 2019)	3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2019 (1 SEPTEMBER 2018 TO 31 AUGUST 2019)	3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2019 (1 SEPTEMBER 2018 TO 31 AUGUST 2019)	3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2019 (1 SEPTEMBER 2018 TO 31 AUGUST 2019)
(% shows rate of increase/decrease from previous year)
	Revenue		Operating profit		Profit before income taxes		Profit attributable to owners of the Parent		Basic earnings per share attributable to owners of the Parent
Year ending 31 August 2019	Millions of yen 2,300,000	% 8.0	Millions of yen 270,000	% 14.3	Millions of yen 270,000	% 11.3	Millions of yen 165,000	% 6.6	Yen 1,617.33

• Notes

(1) Changes in principal subsidiaries (i.e., changes in specified subsidiaries):

(2) Changes in accounting policies and accounting estimates:

(i) Changes in accounting policies to conform with IFRS:

(ii) Other changes in accounting policies: (iii) Change in accounting estimates:

None None None None

• (3) Total number of shares outstanding (common stock)

(i)	Number of shares outstanding (includingtreasurystock)	As at 31 August 2018	106,073,656 shares	As at 31 August 2017	106,073,656 shares
(ii)	Number of treasurystock shares	As at 31 August 2018	4,053,872 shares	As at 31 August 2017	4,089,664 shares
(iii)	Average number of shares outstanding	For the year ended 31 August 2018	102,002,997 shares	For the year ended 31 August 2017	101,975,416 shares

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(REFERENCE INFORMATION)

NON-CONSOLIDATED FINANCIAL RESULTS

The non-consolidated financial results were prepared in accordance with generally accepted accounting principles in Japan.

(1) Non-consolidated Operating Results (1 September 2017 to 31 August 2018)

(1) Non-consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Non-consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Non-consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Non-consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Non-consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Non-consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Non-consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Non-consolidated Operating Results (1 September 2017 to 31 August 2018)	(1) Non-consolidated Operating Results (1 September 2017 to 31 August 2018)
(Percentages represent year-on-year changes)
	Net sales		Operating profit		Ordinary profit		Profit
Year ended 31 August 2018 Year ended 31 August 2017	Millions of yen 193,044 139,871	% 38.0 40.9	Millions of yen 136,519 93,934	% 45.3 68.8	Millions of yen 139,660 115,488	% 20.9 —	Millions of yen 122,158 64,264	% 90.1 956.3

	Net income per share	Diluted net income per share
Year ended 31 August 2018 Year ended 31 August 2017	Yen 1,197.59 630.20	Yen 1,195.63 629.28

(2) Non-consolidated Financial Position

(2) Non-consolidated Financial Position
	Total assets	Net assets	Ratio of shareholders’ equity to total assets	Net assets per share
As at 31 August 2018 As at 31 August 2017	Millions of yen 993,413 670,111	Millions of yen 463,229 377,103	% 46.1 55.6	Yen 4,489.50 3,654.97

(Notes) Shareholders’ equity As at 31 August 2018: 458,017 million yen As at 31 August 2017: 372,748 million yen

• This annual results announcement is not subject to auditing procedures pursuant to the Financial Instruments and Exchange Act of Japan.

• Explanation and other notes concerning proper use of consolidated business results projections:

Statements made in these materials pertaining to future matters, including business projections, are based on information currently available to the Company and certain assumptions determined to be reasonable. Actual business results may vary substantially depending on a variety of factors.

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1. Business Results

(1) Analysis of Business Results for the year ended 31 August 2018

The Fast Retailing Group achieved record levels of revenue and profit in fiscal 2018, or the twelve months from 1 September 2017 to 31 August 2018. Consolidated revenue totaled ¥2.1300 trillion (+14.4% year-on-year) and operating profit reached ¥236.2 billion (+33.9% year-on-year). This strong performance was due largely to a significant revenue and profit increase at UNIQLO International, and stable revenue and profit growth at UNIQLO Japan. The consolidated gross profit margin improved by 0.5 points year-on-year in fiscal 2018 and the selling, general and administrative expense ratio improved by 1.5 points. Under other expenses, the Group recorded ¥12.3 billion in impairment losses on France-based COMPTOIR DES COTONNIERS and other labels and on store revaluations. A gain of ¥6.4 billion was recorded under finance income/costs resulting from a balance of ¥4.3 billion in interest income net of interest expense. As a result, fiscal 2018 profit before income taxes expanded to ¥242.6 billion (+25.5% year-on-year) and profit attributable to owners of the Parent increased to ¥154.8 billion (+29.8% year-on-year). Capital expenditures increased by ¥9.6 billion year-on-year in fiscal 2018 to ¥69.3 billion (including finance leases). Breaking down that capital expenditure figure: ¥9.9 billion was invested at UNIQLO Japan, ¥26.3 billion at UNIQLO International, ¥4.5 billion at GU, ¥2.7 billion at Global Brands, and ¥25.8 billion in systems, etc. In addition to investing in new UNIQLO and GU stores, more funding was channeled into IT investment and warehouse automation, two key elements of the Groupwide Ariake Project.

The Group’s medium-term vision is to become the world’s number one apparel retailer. In pursuit of this aim, we are focusing 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 stores in major cities around the world to help consolidate UNIQLO’s position as a key global brand. Within the UNIQLO International segment, Greater China (Mainland China, Hong Kong and Taiwan) and Southeast Asia are entering a new stage of growth as key drivers of operational growth for the Fast Retailing Group. In addition, UNIQLO USA was able to significantly reduce operating losses, and 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.

Due to its growing impact on overall consolidated performance, the GU casual fashion brand, formerly a part of the Global Brands business segment, was separated into an independent business segment from the current consolidated fiscal year. Previous data have been adjusted to suit the new reporting segment structure and facilitate accurate year-on-year comparisons.

UNIQLO Japan

UNIQLO Japan reported significant rises in profit in fiscal 2018, with revenue totaling ¥864.7 billion (+6.7 % year-on-year) and operating profit totaling ¥119.0 billion (+24.1% year-on-year). Full-year same-store sales, including online sales, expanded by 6.2% year-on-year thanks to rising customer visits. In the first half of the from 1 September 2017 through 28 February 2018, same-store sales grew at an extremely fast rate of 8.4% year-on-year on the back of unseasonably cold winter weather and timely increases in production of stronger selling items. In the second half from 1 March to 31 August 2018, same-store sales expanded by 3.3% year-on-year on the back of strong sales of Summer items such as AIRism, UT and DRY T-shirts. Full-year online sales increased by 29.4% year-on-year to ¥63.0 billion, constituting 7.3% of total revenue. On the profit front, while the cost of sales continued to rise over the period due to a weakening in internal yen exchange rates, that negative impact was successfully offset by narrower discounting rates. As a result, the gross profit margin improved by 0.4 point year-on-year. Meanwhile, the selling, general and administrative expense ratio improved by 1.6 points year-on-year on the back of significant reductions in advertising and promotion expenses, distribution costs and personnel expenses.

UNIQLO International

UNIQLO International revenue and profit rose significantly in fiscal 2018, with revenue totaling ¥896.3 billion (+26.6% year-on-year) and operating profit increasing to ¥118.8 billion (+62.6% year-on-year). The gross profit margin improved by 1.1 points year-on-year on the back of favorable new store openings and consistently strong sales performances from all operations. The segment’s concerted shift towards a business format that relies less heavily on discounting also contributed to the improved gross profit margin. The selling, general and administrative expense ratio improved 1.5 points on consistent cost-cutting efforts. It is worth noting that UNIQLO International revenue exceeded UNIQLO Japan revenue for the first time in fiscal 2018, and UNIQLO International’s operating profit also expanded to a level approaching that of UNIQLO Japan.

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Breaking down the strong UNIQLO International performance into individual markets: Same-store sales in the Greater China region continued to expand in fiscal 2018 as more and more consumers embraced the LifeWear concept, and regionally tailored product mixes proved a success. UNIQLO Greater China achieved buoyant double-digit growth in online sales, which constituted 15% of total revenue. A close correlation between marketing and stores helped temper discounting rates in South Korea, leading to a significant improvement in that operation’s gross profit margin. UNIQLO Southeast Asia & Oceania achieved double-digit growth in same-store sales on the back of strong sales of UT and shorts. UNIQLO USA managed to halve its operating loss after reviewing a tailored product mix for consumers on the East and West Coasts, and achieving more accurate sales planning. UNIQLO Europe operating profit doubled on the back of strong performances from Russia, France and the United Kingdom. UNIQLO’s newest national operations in Europe have gotten off to a strong start, with the first store in Spain opened in Barcelona in September 2017, the first store in Sweden opened in Stockholm in August 2018, and the first store in the Netherlands opened in Amsterdam in September 2018.

GU

The GU business segment reported a rise in revenue but a fall in profit in fiscal 2018, with revenue climbing to ¥211.8 billion (+6.4% year-on-year) and operating profit declining to ¥11.7 billion (-13.1% year-on-year). Full-year same-store sales declined due to issues with product mixes and volume planning. In the first half, GU was unable to exploit actual demand due to an insufficient choice of coldweather ranges. In the second half, ranges featured in GU campaigns underperformed, and the large increase in the number of product types resulted in shortages of stronger-selling items. Against this backdrop of sluggish sales, the full-year gross profit margin declined 0.1 point year-on-year and the business expenses to net sales ratio increased by 1.2 points year-on-year. As a result, GU operating profit declined by 13.1% year-on-year.

Global Brands

Global Brands revenue rose but profit fell in fiscal 2018. Revenue rose to ¥154.4 billion (+9.5% year-on-year), but the segment reported an operating loss of ¥4.1 billion (an operating profit of ¥0.5 billion in fiscal 2017), following the recording of ¥9.9 billion in impairment losses on COMPTOIR DES COTONNIERS and other labels. The Theory fashion operation reported a rise in both revenue and profit, thanks to stable growth for the Theory label in both the United States and Japan, and a favorable expansion in Theory’s Japan-based PLST brand. COMPTOIR DES COTONNIERS, PRINCESSE TAM.TAM and J Brand reported continued losses for the full business year.

Sustainability

As the business activities of the Fast Retailing Group expand worldwide, we will continue our efforts to achieve sustainability of the global environment and society through the clothing business in accordance with our statement to “Turn the power of clothing into the power of society.” The initiatives of our group focus on six priority areas: new value creation through products and sales, respect for the human rights and work environment of our supply chain, consideration of the environment, coexistence and co-prosperity with the community, the happiness of employees, and ethical management. In all of these areas, we make efforts to protect human rights and the environment and to make social contributions.

In June 2018, we established the Fast Retailing Group Human Rights Policy (“Human Rights Policy”) in accordance with international standards including the United Nations Guiding Principles on Business and Human Rights (UNGP). This policy applies to all employees of our group companies. Furthermore, we also continually encourage our production and business partners to adopt similar policies, and we promote respect for human rights in cooperation with them.

In July 2018, we established the Human Rights Committee based on our Human Rights Policy. This committee gives advice and oversees the company’s fulfillment of its responsibilities in regard to respect for human rights and the appropriate execution of business under our Human Rights Policy. We also established a hotline to enable employees at our partner garment factories to report any issues directly to our company. If a report is received, the committee head will conduct an investigation, examine relief measures, and request the relevant department to take corrective action. If the matter is serious, it will be presented to the committee for deliberation. The committee will then make a decision on relief measures and will give guidance and recommendations to the relevant department.

We also actively promote social contribution initiatives in Japan and countries around the world. In Japan, for example, after heavy rains caused significant damage in Western Japan in July 2018, we commenced delivering clothing supplies to assist victims in Hiroshima, Okayama, Ehime, and Shimane prefectures. By the end of August, we had donated approximately 46,600 clothing items including underwear and socks for which there was a pressing need for everyday life. In July 2018, UNIQLO US received the Sapolin Accessibility Award for Employment from New York City in recognition of its commitment to supporting people with disabilities particularly in employment, an area where UNIQLO US has been promoting initiatives for the past four years. In the same month, UNIQLO US also received the Corporate Community Impact Award of the ESPN Sports Humanitarian Awards in recognition of its activities as an official apparel sponsor for Street Soccer USA. Street Soccer USA provides opportunities for homeless young people to come into contact with sports, and to date UNIQLO US has provided over 28,000 clothing items including Dry-EX wear.

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(2) Financial Positions

Total assets as at 31 August 2018 were ¥1.9534 trillion, which was an increase of ¥564.9 billion relative to the end of the preceding consolidated fiscal year. The principal factors were an increase of ¥315.8 billion in cash and cash equivalents, an increase of ¥175.1 billion in inventories, an increase of ¥29.2 billion in derivative financial assets, an increase of ¥11.0 billion in other current assets and an increase of ¥18.0 billion in property, plant and equipment.

Total liabilities as at 31 August 2018 were ¥1.0506 trillion, which was an increase of ¥424.2 billion relative to the end of the preceding consolidated fiscal year. The principal factors were an increase of ¥10.5 billion in trade and other payables, an increase of ¥160.0 billion in other current financial liabilities, an increase of ¥17.8 billion in other current liabilities and an increase of ¥229.2 billion in non-current financial liabilities.

Total net assets as at 31 August 2018 were ¥902.7 billion, which was an increase of ¥140.7 billion relative to the end of the preceding consolidated fiscal year. The principal factors were an increase of ¥116.5 billion in retained earnings and an increase of ¥10.5 billion in other components of equity.

(3) Cash Flows Information

Cash and cash equivalents as at 31 August 2018 increased by ¥315.8 billion from the end of the preceding consolidated fiscal year, to ¥999.6 billion.

(Operating Cash Flows)

Net cash generated by operating activities for the year ended 31 August 2018 was ¥176.4 billion, which was a decrease of ¥35.7 billion (-16.9 % year-on-year) from the year ended 31 August 2017.

The principal factors were ¥242.6 billion in profit before income taxes (an increase of ¥49.2 billion from the year ended 31 August 2017), an increase of ¥179.4 billion in inventories (a decrease of ¥173.5 billion from the year ended 31 August 2017), an increase of ¥142.2 billion in other liabilities (an increase of ¥135.7 billion from the year ended 31 August 2017), and ¥86.7 billion in income taxes paid (a decrease of ¥39.0 billion from the year ended 31 August 2017).

(Investing Cash Flows)

Net cash used in investing activities for the year ended 31 August 2018 was ¥57.1 billion, which was an increase of ¥179.9 billion from the year ended 31 August 2017. The principal factors were an increase of ¥4.3 billion in bank deposits with original maturity over three months (an increase of ¥172.6 billion from the year ended 31 August 2017).

(Financing Cash Flows)

Net cash generated from financing activities for the year ended 31 August 2018 was ¥198.2 billion, which was an increase of ¥249.0 billion from the year ended 31 August 2017. The principal factor was an increase of ¥249.3 billion in proceeds from issuance of corporate bonds (an increase of ¥249.3 billion from the year ended 31 August 2017).

(4) Outlook for the Coming Year

In fiscal 2019, Fast Retailing expects to achieve consolidated revenue of ¥2.3 trillion (+8.0% year-on-year), operating profit of ¥270.0 billion (+14.3% year-on-year), profit before income taxes of ¥270.0 billion (+11.3% year-on-year) and profit attributable to owners of the parent of ¥165.0 billion (+6.6% year-on-year).

All four Fast Retailing business segments are expected to generate increases in both revenue and profit in fiscal 2019. We forecast the overall Fast Retailing Group network will expand to a total of 3,677 stores by the end of August 2019: 827 stores (including franchise stores) at UNIQLO Japan, 1,412 stores at UNIQLO International, 423 stores at GU and 1,015 stores at Global Brands.

2. Basic Concept Regarding Selection of Accounting Standards

The Group has adopted IFRS for the Group’s consolidated financial statements since the year ended 31 August 2014.

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3. Consolidated Financial Statements

(1) Consolidated Statement of Financial Position

(Millions of yen)

3. Consolidated Financial Statements (1) Consolidated Statement of Financial Position	(Millions of yen)
Notes	As at 31 August 2017 As at 31 August 2018
ASSETS Current assets Cash and cash equivalents Trade and other receivables Other financial assets Inventories Derivative financial assets Income taxes receivable Other assets 5 Total current assets Non-current assets Property, plant and equipment 5 Goodwill 5 Intangible assets 5 Financial assets Investments in associates accounted for using the equity method Deferred tax assets Other assets 5 Total non-current assets Total assets Liabilities and equity LIABILITIES Current liabilities Trade and other payables Other financial liabilities Derivative financial liabilities Current tax liabilities Provisions Other liabilities Total current liabilities Non-current liabilities Financial liabilities Provisions Deferred tax 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	683,802 999,697 48,598 52,677 30,426 35,359 289,675 464,788 6,269 35,519 1,518 1,702 17,307 28,353
	1,077,598 1,618,097 136,979 155,077 15,885 8,092 36,895 46,002 77,608 79,476 13,473 14,649 25,303 26,378 4,742 5,691
	310,888 335,368
	1,388,486 1,953,466
	204,008 214,542 11,844 171,854 6,083 6,917 25,864 21,503 8,780 11,868 54,840 72,722
	311,421 499,410 273,467 502,671 15,409 18,912 10,000 13,003 16,144 16,690
	315,022 551,277
	626,443 1,050,688 10,273 10,273 14,373 18,275 698,584 815,146 (15,563) (15,429) 24,102 34,669
	731,770 862,936 30,272 39,841
	762,043 902,777
	1,388,486 1,953,466

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(2) Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income

Consolidated statement of profit or loss

(Millions of yen)

(2) Consolidated Statement of Profit or Loss and Consolidated Statement Consolidated statement of profit or loss	of Comprehensive Income (Millions of yen)
Notes	Year ended 31 August 2017 Year ended 31 August 2018
Revenue Cost of sales Gross profit Selling, general and administrative expenses 2 Other income 3 Other expenses 3,5 Share of profit and loss of associates accounted for using the equity method Operating profit/(loss) Finance income 4 Finance costs 4 Profit/(loss) before income taxes Income taxes Profit for the year Profit/(loss) for the year attributable to: Owners of the Parent Non-controlling interests Earnings per share Basic (yen per share) 6 Diluted (yen per share) 6	1,861,917 2,130,060 (952,667) (1,080,123)
	909,249 1,049,936 (725,215) (797,476) 6,321 3,385 (14,567) (20,244) 625 611
	176,414 236,212 19,917 9,693 (2,932) (3,228)
	193,398 242,678 (64,488) (73,304)
	128,910 169,373
	119,280 154,811 9,630 14,562
	128,910 169,373
	1,169.70 1,517.71 1,168.00 1,515.23

Consolidated statement of comprehensive income

Consolidated statement of comprehensive income
	(Millions of yen)
	Year ended 31 August 2017 Year ended 31 August 2018
Profit for the year Other comprehensive income/(loss), net of income/(loss) 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 year Exchange differences on translation of foreign operations Cash flow hedges Other comprehensive income/(loss), net of taxes Total comprehensive income/(loss) for the year Attributable to: Owners of the Parent Non-controlling interests Total comprehensive income/(loss) for the year	128,910 169,373 ― ― (245) 34 26,285 (6,285) 47,109 17,735
	73,148 11,484
	202,059 180,858
	190,566 165,378 11,493 15,480
	202,059 180,858

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(Millions of yen)

(3) Consolidated Statement of Changes in Equity

For the year ended 31 August 2017

		(Millions of yen)
	Capital stock Capital surplus Retained earnings Treasury stock, at cost	Other components of equity Available- for-sale reserve Foreign currency translation reserve Cash-flow hedge reserve Total Equity attributable to owners of the Parent Non- controlling interests Total equity
	10,273 13,070 613,974 (15,633) 248 (2,811) (44,619) (47,183) 574,501 23,159 597,661 — — 119,280 — — — — — 119,280 9,630 128,910 — — — — (245) 24,618 46,913 71,285 71,285 1,862 73,148
	— — 119,280 — (245) 24,618 46,913 71,285 190,566 11,493 202,059 — — — (6) — — — — (6) — (6) — 642 — 75 — — — — 718 — 718 — — (34,670) — — — — — (34,670) (3,994) (38,664) — 754 — — — — — — 754 — 754 — (94) — — — — — — (94) (385) (480)
	— 1,303 (34,670) 69 — — — — (33,297) (4,379) (37,677)
	— 1,303 84,610 69 (245) 24,618 46,913 71,285 157,268 7,113 164,381

For the year ended 31 August 2018

(Millions of yen)

		(Millions of yen)
	Capital stock Capital surplus Retained earnings Treasury stock, at cost	Other components of equity Available- for-sale reserve Foreign currency translation reserve Cash-flow hedge reserve Total Equity attributable to owners of the Parent Non- controlling interests Total equity
As at 1 September 2017 Net changes during the year Comprehensive income/(loss) Profit/(loss) for the year Other comprehensive income/(loss) Total comprehensive income/(loss) Transactions with the owners of the Parent Acquisition of treasury stock Disposal of treasury stock Dividends Share-based payments Increase in equity due to capital increase by consolidated subsidiary Capital contributions from non-controlling interests Total transactions with the owners of the Parent Total net changes during the year As at 31 August 2018	10,273 14,373 698,584 (15,563) 2 21,806 2,293 24,102 731,770 30,272 762,043 — — 154,811 — — — — — 154,811 14,562 169,373 — — — — 34 (6,376) 16,909 10,567 10,567 917 11,484
	— — 154,811 — 34 (6,376) 16,909 10,567 165,378 15,480 180,858 — — — (1) — — — — (1) — (1) — 1,169 — 136 — — — — 1,306 — 1,306 — — (38,248) — — — — — (38,248) (7,840) (46,088) — 857 — — — — — — 857 — 857 — — — — — — — — — 173 173 — 1,874 — — — — — — 1,874 1,754 3,629
	— 3,901 (38,248) 134 — — — — (34,212) (5,911) (40,124)
	— 3,901 116,562 134 34 (6,376) 16,909 10,567 131,165 9,568 140,734
	10,273 18,275 815,146 (15,429) 37 15,429 19,202 34,669 862,936 39,841 902,777

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(4) Consolidated Statement of Cash Flows

(Millions of yen)

(4) Consolidated Statement of Cash Flows	(Millions of yen)
Notes	Year ended 31 August 2017 Year ended 31 August 2018
Cash flows from operating activities Profit/(loss) before income taxes Depreciation and amortisation Impairment losses 5 Increase/(decrease) in provisions Interest and dividends income Interest expenses Net foreign exchange (gain)/loss 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 and other receivables Decrease/(increase) in inventories Increase/(decrease) in trade and other payables Decrease/(increase) in other assets Increase/(decrease) in other liabilities Others, net Cash generated from operations Interest and dividends income received Interest paid Income taxes paid Income taxes refund Net cash generated by operating activities Cash flows from investing activities Amounts deposited into bank deposits with original maturities of 3 months or longer Amounts withdrawn from bank deposits with original maturities of 3 months or longer Payments for property, plant and equipment Payments for intangible assets Payments for lease and guarantee deposits Proceeds from collection of lease and guarantee deposits Payments for construction assistance fund Returns of construction assistance fund Others, net Net cash generated from/(used in) investing activities	193,398 242,678 39,688 45,055 9,324 12,376 1,674 4,654 (6,124) (7,560) 2,932 3,169 (13,318) (2,132) (625) (611) 1,915 1,176 (1,442) (2,852) (5,955) (179,469) 9,949 9,758 (290) (13,053) 6,417 142,212 (1,682) 1,819
	235,861 257,220 6,124 7,409 (2,966) (2,393) (47,691) (86,725) 20,840 892
	212,168 176,403
	(114,330) (63,490) 282,667 59,185 (33,600) (31,962) (12,266) (16,532) (3,211) (4,773) 1,789 3,064 (1,045) (1,261) 1,713 2,057 1,072 (3,467)
	122,790 (57,180)

(continued)

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(Millions of yen)

	(Millions of yen)
	Year ended 31 August 2017 Year ended 31 August 2018
Cash flows from financing activities Proceeds from short-term loans payable Repayment of short-term loans payable Repayment of long-term loans payable Proceeds from issuance of corporate bonds Dividends paid to owners of the Parent Capital contributions from non-controlling interests Dividends paid to non-controlling interests Repayments of lease obligations Others, net Net cash (used in)/generated from financing activities Effect of exchange rate changes on the balance of cash held in foreign currencies Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of year CASH AND CASH EQUIVALENTS AT THE END OF YEAR	7,091 1,767 (10,314) (1,596) (2,915) (3,308) — 249,319 (34,671) (38,244) — 3,803 (3,965) (7,827) (6,052) (5,918) (8) 224
	(50,836) 198,217
	14,248 (1,545)
	298,371 315,894 385,431 683,802
	683,802 999,697

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Not applicable.

(5) Notes regarding Going Concern Assumptions

(6) Notes to the Consolidated Financial Statements

1. Segment Information

(1) Description of reportable segments

The Group’s reportable segments are components for which discrete financial information is available and is reviewed regularly by the Board to make decisions about the allocation of resources and to assess performance.

From the current consolidated fiscal year, the operations of GU, which were previously included as a part of the Global Brand segment, have been included in the GU segment (newly created segment). The Group now discloses the GU reportable segment as a result of the Board’s increased focus as its scale of operation expands.

The Group’s main retail clothing business is divided into four reportable operating segments: UNIQLO Japan, UNIQLO International, GU and Global Brands, each of which is used to frame and form the 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 brand clothing business in Japan and overseas

Global Brands : Theory, COMPTOIR DES COTONNIERS, PRINCESSE TAM.TAM and J Brand clothing operations

(2) Segment revenue and results

Year ended 31 August 2017

Year ended 31 August	2017	2017	2017	2017	2017	2017	2017	2017
	(Millions of yen)
	Reportable segments				Total	Others (Note1)	Adjustments (Note2)	Consolidated Statement of Profit or Loss
	UNIQLO Japan	UNIQLO International	GU	Global Brands
Revenue	810,734	708,171	199,139	141,003	1,859,048	2,868	—	1,861,917
Operating profit/(losses)	95,914	73,143	13,542	500	183,101	285	(6,972)	176,414
Segment income/(losses) (i.e., profit before income taxes)	97,868	72,814	13,583	340	184,608	285	8,504	193,398
Other disclosures: Depreciation and amortisation Impairment losses	8,966 284	17,214 1,603	3,776 5	2,701 3,848	32,659 5,741	153 —	6,875 3,583	39,688 9,324

(Note 1) “Others” includes real estate leasing business, etc.

(Note 2) “Adjustments” mainly includes revenue and corporate expenses which are not allocated to individual reportable segments. Please refer

to “5. Impairment losses” for details of impairment loss on IT system investments, which is allocated to “Adjustments.”

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Year ended 31 August 2018

Year ended 31 August	2018	2018	2018	2018	2018	2018	2018	2018
	(Millions of yen)
	Reportable segments				Total	Others (Note1)	Adjustments (Note2)	Consolidated Statement of Profit or Loss
	UNIQLO Japan	UNIQLO International	GU	Global Brands
Revenue	864,778	896,321	211,831	154,464	2,127,395	2,664	—	2,130,060
Operating profit/ (losses)	119,040	118,897	11,774	(4,115)	245,596	240	(9,624)	236,212
Segment income/ (losses)(i.e., profit before income taxes)	119,685	119,172	11,572	(4,248)	246,182	250	(3,755)	242,678
Other disclosures: Depreciation and amortisation Impairment losses	9,448 415	18,693 944	5,463 268	3,137 9,962	36,744 11,590	12 —	8,298 785	45,055 12,376

(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 reportable segments.

2. Selling, general and administrative expenses

The breakdown of selling, general and administrative expenses for each year is as follows:

(Millions of yen)	(Millions of yen)	(Millions of yen)
	Year ended 31 August 2017	Year ended 31 August 2018
Selling, general and administrative expenses Advertising and promotions Rental expenses Depreciation and amortisation Outsourcing Salaries Others	70,937 174,034 39,688 33,244 252,520 154,790	70,310 191,813 45,055 41,005 285,105 164,186
Total	725,215	797,476

3. Other income and other expenses

The breakdowns of other income and other expenses for each year are as follows:

(Millions of yen)	(Millions of yen)	(Millions of yen)
	Year ended 31 August 2017	Year ended 31 August 2018
Other income Foreign exchange gains* Reversal of impairment losses Others	2,137 695 3,488	— — 3,385
Total	6,321	3,385

(Millions of yen)	(Millions of yen)	(Millions of yen)
	Year ended 31 August 2017	Year ended 31 August 2018
Other expenses Foreign exchange losses* Losses on retirement of property, plant and equipment Impairment losses Others	— 1,915 9,324 3,327	1,450 1,176 12,376 5,241
Total	14,567	20,244

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

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4. Finance income and finance costs

The breakdowns of finance income and finance costs for each year are as follows:

(Millions of yen)	(Millions of yen)	(Millions of yen)
	Year ended 31 August 2017	Year ended 31 August 2018
Finance income Foreign exchange gains* Interest income Others	13,318 6,110 488	2,132 7,545 15
Total	19,917	9,693

(Millions of yen)	(Millions of yen)	(Millions of yen)
	Year ended 31 August 2017	Year ended 31 August 2018
Finance costs Interest expenses Others	2,932 —	3,169 58
Total	2,932	3,228

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

5. Impairment losses

During the year ended 31 August 2018, the Group recognized impairment losses on certain store assets and goodwill etc., due to reductions in profitability of the respective cash-generating units.

The breakdown of impairment losses by asset type is as follows:

(Millions of yen)	(Millions of yen)	(Millions of yen)
	Year ended 31 August 2017	Year ended 31 August 2018
Buildings and structures Furniture and equipment Land Leased assets (Note 1)	1,491 571 34 55	2,029 205 — 99
Subtotal impairment losses on property, plant and equipment	2,153	2,335
Software Goodwill Trademark (Note 2) Other intangible assets	2,912 2,196 772 681	174 7,792 1,657 415
Subtotal impairment losses on goodwill and other intangible assets	6,562	10,039
Other current assets (short-term prepayments) Other non-current assets (long-term prepayments)	608 —	0 0
Total impairment losses	9,324	12,376

(Note 1) Leased assets include furniture and equipment.

(Note 2) 1,657 million yen represented impairment losses on the trademark of the Helmut Lang brand.

The Group’s impairment losses during the year ended 31 August 2018 amounted to 12,376 million yen, compared with 9,324 million yen during the year ended 31 August 2017, and are included in “other expenses” on the consolidated statement of profit or loss.

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Year ended 31 August 2017

(1) Property, plant and equipment

Out of total impairment losses amounting to 9,324 million yen, 2,153 million yen represented write downs of the carrying amounts of store assets to the recoverable amounts, mainly due to a reduction in profitability of certain stores, including flagship stores.

The grouping of assets is based on the smallest cash-generating unit that independently generates cash inflow. In principle, each store, including flagship stores, is considered as an individual cash-generating unit and recoverable amounts thereof are calculated based on value in use.

The value in use is calculated based on the cash flow projections with estimates and growth rates compiled by management at a discount rate of 14.6%. Theoretically, the projected cash flows cover a five-year period, and do not use a growth rate that exceeds the long-term average market growth rate. The pre-tax discount rate calculation is based on the weighted-average cost of capital.

The main cash-generating units for which impairment losses were recorded are as follows:

Operating segment	Cash-generating unit	Type
UNIQLO Japan	UNIQLO CO., LTD. stores	Buildings and structures
UNIQLO International	UNIQLO USA LLC etc. stores	Buildings and structures
Global Brands	PRINCESSE TAM.TAM S.A.S etc. stores	Buildings and structures

(2) Goodwill and intangible assets, etc.

(i) Impairment losses related to the J Brand business

Out of the total impairment losses amounting to 9,324 million yen, 3,650 million yen represented impairment losses on goodwill, trademarks, and customer relationships of the J Brand business. The carrying amounts of cash-generating units related to the J Brand business after recognition of the impairment losses were written down to zero yen of goodwill and customer relationships, and 1,388 million yen of trademarks.

The recoverable amounts from goodwill and intangible assets relating to trademarks and customer relationships, related to the J Brand business were calculated based on fair value less cost of disposal.

Fair value less costs of disposal is determined by taking into account the following two approaches:

• ① The terminal value of the business plus the 10-year discounted cash flow projections were based on plans approved by management. The fair value measurement is calculated based on the post-tax discount rate. The post-tax discount rate is calculated at 20.5% based on the weighted-average cost of capital of the cash-generating units (income approach).

• In addition, deviation from the amount of future cash flows or the predictions about the implementation timing is primarily reflected in the discount rate. Furthermore, the cash flows beyond the 10-year period are extrapolated using a 3% growth rate taking into account the long-term average market growth rate.

• ② Calculation based on the market value of similar assets (market approach).

This measurement of fair value is classified as Level 3 in the fair value hierarchy based on significant inputs in used valuation techniques. Adverse change in key assumptions — lower estimated future cash flows or a higher discount rate would cause further impairment losses to be recognized.

(ii) Impairment losses related to IT system investment

Out of total impairment losses amounting to 9,324 million yen, 3,521 million yen is related to IT system investments for luxury brands. 3,521 million yen is comprised of impairment losses for software assets which amounted to 2,912 million yen and impairment losses for IT system assets, which are included in other current assets, which amounted to 608 million yen.

These impairment losses represented write downs of the carrying amounts of the aforementioned assets to the recoverable amounts in order to reflect the decreased profitability that resulted from replacing the system. The Company allocates the software, as corporate assets, to each luxury brand, whereby representing individual cash-generating units.

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The recoverable amounts of each cash-generating unit, related to the luxury brands, are calculated based on their value in use. As a result, the carrying amounts of software after recognition of impairment losses were written down to zero yen.

(3) Reversal of impairment losses

Since recovery in profitability was identified in certain stores in the UNIQLO Japan business where impairment losses were recorded in the past (mainly buildings and structures), the total reversal of impairment losses amounting to 695 million yen was included in “Other income” in the consolidated statement of profit or loss. The recoverable amounts are based on value in use.

The calculation basis for value in use is cash flow projections based on estimates and growth rates compiled by management at discount rates ranging from 16.3% to 19.3%. Theoretically, the projected cash flows are based on the remaining estimated useful lives of the respective property, plant and equipment, and do not use a growth rate that exceeds the long-term average market growth rate. The pretax discount rate calculation is based on the weighted-average cost of capital.

Year ended 31 August 2018

(1) Property, plant and equipment

Out of total impairment losses amounting to 12,376 million yen, 1,725 million yen represented write downs of the carrying amounts of store assets to the recoverable amounts, mainly due to a reduction in profitability of certain stores, including flagship stores.

The grouping of assets is based on the smallest cash-generating unit that independently generates cash inflow. In principle, each store, including flagship stores, is considered as an individual cash-generating unit and recoverable amounts thereof are calculated based on value in use.

The value in use is calculated based on the cash flow projections with estimates and growth rates compiled by management at a discount rate of 7.5%. Theoretically, the projected cash flows cover a five-year period, and do not use a growth rate that exceeds the long-term average market growth rate. The pre-tax discount rate calculation is based on the weighted-average cost of capital.

The main cash-generating units for which impairment losses were recorded are as follows:

Operating segment	Cash-generating unit	Type
UNIQLO Japan	UNIQLO CO., LTD. stores	Buildings and structures
UNIQLO International	UNIQLO EUROPE LTD. etc., stores	Buildings and structures
GU	G.U. CO., LTD. etc., stores	Buildings and structures
Global Brands	COMPTOIR DES COTONNIERS S.A.S., etc stores	Buildings and structures

(2) Goodwill

(i) Impairment losses related to the COMPTOIR DES COTONNIERS business

Out of the total impairment losses amounting to 12,376 million yen, 7,792 million yen represented impairment losses on goodwill, of the COMPTOIR DES COTONNIERS business. The carrying amounts of cash-generating units related to the COMPTOIR DES COTONNIERS business after recognition of the impairment losses were written down to zero yen of goodwill.

The recoverable amounts from goodwill related to the COMPTOIR DES COTONNIERS business were calculated based on fair value less cost of disposal.

Fair value less costs of disposal is determined by taking into account the following two approaches:

The terminal value of the business plus the three year discounted cash flow projections were based on plans approved by management. The fair value measurement is calculated based on post-tax discount rate. The post-tax discount rate is calculated at 13.6% based on the weighted-average cost of capital of the cash-generating units (income approach).

In addition, deviation from the amount of future cash flows or the predictions about the implementation timing is primarily reflected in the discount rate. Furthermore, the cash flows beyond the 10-year period are extrapolated using a 1% growth rate taking into account the long-term average market growth rate.

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6. Earnings per share

6. Earnings per share	6. Earnings per share
Year ended 31 August 2017		Year ended 31 August 2018
Equity per share attributable to owners of the Parent (Yen) Basic earnings per share for the year (Yen) Diluted earnings per share for the year (Yen)	7,175.35 1,169.70 1,168.00	Equity per share attributable to owners of the Parent (Yen) Basic earnings per share for the year (Yen) Diluted earnings per share for the year (Yen)	8,458.52 1,517.71 1,515.23

(Note) The basis for calculation of basic earnings per share and diluted earnings per share for the year is as follows:

	Year ended 31 August 2017	Year ended 31 August 2018
Basic earnings per share for the year Profit attributable to owners of the Parent for the year (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 year (Shares) Diluted earnings per share for the year Adjustment to profit (Millions of yen) Increase in number of common stock (Shares) (Number of share subscription rights included in the increase)	119,280 — 119,280 101,975,416 — 148,207 (148,207)	154,811 — 154,811 102,002,997 — 167,434 (167,434)

7. Subsequent Events

At the Board meeting of the Company held on 11 October 2018, the Board resolved to issue share subscription rights as share-based compensation stock options to some employees of the Company and its subsidiaries based on Articles 236, 238 and 240 of the Companies Act of Japan.

Please refer to “Notice of FAST RETAILING CO., LTD. related to the issuance of share-based compensation stock option (share subscription rights)” which the Company announced on 11 October 2018 for the details of this issuance.

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4. Supplementary Information

Sales breakdown by product category/operation

Division	Year ended 31 August 2017	Year ended 31 August 2017	Year ended 31 August 2018	Year ended 31 August 2018
	Revenue (Millions of yen)	Percent of Total (%)	Revenue (Millions of yen)	Percent of Total (%)
Men’s clothing Women’s clothing Children’s & Baby’s clothing Goods and other items	316,601 386,075 60,497 21,145	17.0 20.7 3.2 1.2	341,392 403,407 67,202 22,938	16.0 18.9 3.2 1.1
Total sales of UNIQLO Japan	784,320	42.1	834,941	39.2
Franchise-related income & alteration charges	26,413	1.4	29,836	1.4
Total UNIQLO Japan Operations	810,734	43.5	864,778	40.6
UNIQLO International Operations	708,171	38.0	896,321	42.1
Total UNIQLO Operations	1,518,905	81.5	1,761,099	82.7
GU Operations Global Brands Operations Other Operations	199,139 141,003 2,868	10.7 7.6 0.2	211,831 154,464 2,664	9.9 7.3 0.1
Total	1,861,917	100.0	2,130,060	100.0

• (Notes) 1. Franchise-related income refers to the proceeds from garment sales to franchise stores, plus royalty income. Alteration charges refers to income generated from embroidery prints and alterations to pants length.

2. UNIQLO operations cover the selling of UNIQLO brand casual clothing.

3. GU Operations cover the selling of GU brand casual clothing.

4. Global Brands Operations consist of Theory operations (selling of Theory and PLST brand clothing), COMPTOIR DES COTONNIERS operations (selling of COMPTOIR DES COTONNIERS brand clothing), PRINCESSE TAM.TAM operations (selling of PRINCESSE TAM. TAM brand clothing) and J Brand operations (selling of J BRAND brand clothing).

5. Other operations include the real estate leasing business.

6. E-commerce revenue from UNIQLO Japan

  - _Fiscal year ended 31 August 2017: 48,753 million yen;_

  - _Fiscal year ended 31 August 2018: 63,063 million yen._

7. The above amounts do not include consumption taxes, etc.

5. Others

Changes in Officers

• (1) Change in representative

Not applicable.

(2) Other changes in executives scheduled for 29 November 2018

Changes in directors assume approval by the General meeting of Shareholders for the 57th fiscal term, scheduled to be held on 29 November 2018.

• (i) Candidates for new appointment as directors

Director Naotake Ohno Director Takeshi Okazaki Director Kazumi Yanai Director Koji Yanai

(Note) Naotake Ohno is an External Director as stipulated in Article 2–15 of the Companies Act.

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(ii) Candidates for reappointment as directors

• Director Tadashi Yanai (current Chairman, President and CEO)

• Director Toru Hambayashi (current Director)

• Director Nobumichi Hattori (current Director)

• Director Masaaki Shintaku (current Director)

Director Takashi Nawa (current Director)

• (Note) Tadashi Yanai is expected to be reappointed Chairman, President and CEO after re-election by the General Meeting of Shareholders scheduled for 29 November 2018.

  • Toru Hambayashi, Nobumichi Hattori, Masaaki Shintaku and Takashi Nawa are External Directors as stipulated in Article 2–15 of the Companies Act.

• (iii) Candidates for new appointment as statutory auditors

Statutory Auditor Takao Kashitani

• (Note) Takao Kashitani is an External Statutory Auditor as stipulated in Article 2-16 of the Companies Act.

• (ii) Candidates for reappointment as statutory auditors

Statutory Auditor Akira Tanaka (current Statutory Auditor)

6. Resumption of Trading

At the request of the Company, trading in its Hong Kong depositary receipts on the Stock Exchange was halted with effect from 1:00 p.m. on Thursday, 11 October 2018 pending the release of this announcement. An application will be made by the Company to the Stock Exchange for resumption of trading in the Hong Kong depositary receipts with effect from 9:00 a.m. on Friday, 12 October 2018.

On Behalf of the Board FAST RETAILING CO., LTD.

Tadashi Yanai

Chairman, President and Chief Executive Officer

Japan, 11 October 2018

As at the date of this announcement, the Executive Director is Mr. Tadashi Yanai, the Independent Non-executive Directors are Mr. Toru Hambayashi, Mr. Nobumichi Hattori, Mr. Masaaki Shintaku and Mr. Takashi Nawa, and the Non-executive Director is Mr. Toru Murayama.

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