Fast Retailing : (327KB)

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.

FAST RETAILING CO., LTD.

迅 銷 有 限 公 司

(Incorporated in Japan with limited liability)

(Stock Code:6288)

INTERIM RESULTS ANNOUNCEMENT

FOR THE SIX MONTHS ENDED 28 FEBRUARY 2021

AND

RESUMPTION OF TRADING

The board of directors (the "Board") of FAST RETAILING CO., LTD. (the "Parent" or "Company") is pleased to announce the consolidated results of the Company and its subsidiaries (collectively the "Group") for the six months ended 28 February 2021.

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, 8 April 2021, 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, 9 April 2021.

(Amounts are rounded down to the nearest million yen unless otherwise stated)

1. CONSOLIDATED RESULTS

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

(1) Consolidated Operating Results (1 September 2020 to 28 February 2021)

								(Percentages represent year-on-year changes)
	Revenue		Operating profit	Profit before	Profit for
		income taxes	the period
	Millions		%	Millions		%	Millions	%		Millions	%
	of yen		of yen		of yen		of yen
Six months ended 28 February 2021	1,202,864			(0.5)	167,982		22.9	171,482	13.7		109,255	5.6
Six months ended 29 February 2020	1,208,512			(4.7)	136,736		(20.9)	150,859	(13.4)		103,444	(17.2)
	Profit attributable to	Total comprehensive	Basic earnings	Diluted earnings
	income for the	per share for the	per share for the
	owners of the Parent
	period		period	period
	Millions		%	Millions		%		Yen			Yen
	of yen			of yen
Six months ended 28 February 2021	105,868			5.4	132,534		(7.6)		1,036.76			1,035.04
Six months ended 29 February 2020	100,459			(11.9)	143,505		8.8		984.21			982.49

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(2) Consolidated Financial Position
					Equity		Ratio of equity		Equity per
						attributable to		share
					attributable
	Total assets		Total equity			owners		attributable
			to owners
						of the Parent		to owners
					of the Parent
						to total assets		of the Parent
	Millions of yen		Millions of yen		Millions of yen		%		Yen
As at 28 February 2021	2,501,920		1,098,819		1,056,228		42.2		10,342.04
As at 31 August 2020	2,411,990	996,079	956,562	39.7	9,368.83

2. DIVIDENDS

					Dividend per share
(Declaration date)
First quarter		Second quarter		Third quarter	Year end		Total
	period end		period end		period end
	Yen		Yen			Yen		Yen		Yen
Year ended 31 August 2020	-		240.00			-		240.00		480.00
Year ending 31 August 2021	-	240.00
Year ending 31 August 2021					-		240.00	480.00
(forecast)
(Note) Revisions during this quarter of dividends forecast for fiscal year: None

3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2021 (1 SEPTEMBER 2020 TO 31 AUGUST 2021)

					(% shows rate of increase/decrease from previous period)
	Revenue		Operating profit	Profit before	Profit attributable to
		income taxes	owners of the Parent
	Millions		%	Millions		%	Millions	%	Millions	%
	of yen		of yen		of yen	of yen
Year ending 31 August 2021	2,210,000		10.0	255,000	70.7	255,000	66.8	165,000	82.6
	Basic earnings
	per share attributable
	to owners
	of the Parent
			Yen
Year ending 31 August 2021	1,616.05

(Note) Revisions during this quarter of previously disclosed consolidated business results projection for the year ending 31 August 2021: Yes

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* Notes
(1)	Changes of principal subsidiaries in the period:	None
(2)	Changes in accounting policies and changes in accounting estimates:
(i)	Changes in accounting policies to conform with IFRS:	None
(ii)	Other changes in accounting policies:	None
(iii)	Changes in accounting estimates:	None

(3) Total number of issued shares (Common stock)
(i)	Number of issued shares	As at 28 February 2021	106,073,656 shares	As at 31 August 2020	106,073,656 shares
(including treasury stock)
(ii)	Number of treasury stock	As at 28 February 2021	3,943,966 shares	As at 31 August 2020	3,973,113 shares
	Average number of issued	For the six months		For the six months
(iii)	ended 28 February	102,114,907 shares	ended 29 February	102,070,655 shares
shares
	2021		2020

• This interim results announcement is not subject to quarterly review procedures pursuant to the Financial Instruments and Exchange Act of Japan.
• Explanation and other notes concerning proper use of the consolidated business results projection:
  Statements made in these materials, such as those pertaining to future matters, including business projections, are based on information presently available to the Company and certain assumptions determined to be reasonable. Actual business results may vary materially depending on a variety of factors. For the background, assumptions and other matters regarding the business results projection, please refer to P.7 "(3) Qualitative Information Concerning Consolidated Business Results Projection".

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1. Business Results

1. Results of Operations
   The Fast Retailing Group reported a decline in revenue but a large jump in profits in the first half of fiscal 2021, or the six months from 1 September 2020 to 28 February 2021 with consolidated revenue totaling 1.2028 trillion yen (−0.5% year-on-year), and operating profit rising strongly to 167.9 billion yen (+22.9% year-on-year). The rise in profit can be attributed primarily to large increases in profit from UNIQLO operations in Japan and Greater China (Mainland China market, Hong Kong market, and Taiwan market). On the other hand, due to the especially severe impact of COVID-19, The UNIQLO South Asia, Southeast Asia & Oceania (Southeast Asia, Australia, and India), UNIQLO North America, UNIQLO Europe regions and our Global Brands segment reported considerable declines in both revenue and profit. The first-half consolidated gross profit margin improved by 2.2 points year-on-year to 49.9% and the first-half selling, general and administrative expense ratio improved by 1.3 points year- on-year to 35.0%. We reported an impairment loss primarily on UNIQLO International operations and other losses of 11.7 billion yen under other income/expenses. In addition, we recorded a 4.7 billion yen foreign-exchange gain on foreign-currency denominated assets and other items, resulting in a finance income of 3.4 billion yen on a net basis. As a result, first-half profit before income taxes rose to 171.4 billion yen (+13.7% year-on-year) and profit attributable to owners of the parent rose to 105.8 billion yen (+5.4% 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 focus our efforts on expanding the UNIQLO International, as well as our GU brand and our global e-commerce operation. We continue to open multiple new UNIQLO stores in all markets and areas in which we operate and strive to instill deeper and more widespread empathy for UNIQLO's LifeWear concept of ultimate everyday wear. Within the UNIQLO International segment, the Greater China and Southeast Asia regions are continuing to serve as the key pillars of our Group's business and growth. In terms of our GU segment, in addition to expanding the GU store network primarily in Japan, we are working to establish GU's position as a brand that offers fun fashion at amazingly low prices. E-commerce sales continue to expand thanks to stronger initiatives to fuse online and physical stores and the offering of a wider range of services.

UNIQLO Japan

UNIQLO Japan reported a rise in revenue and a significant increase in profit in the first half of fiscal 2021, with revenue expanding to 492.5 billion yen (+6.2% year-on-year) and operating profit rising to 97.8 billion yen (+36.6% year-on-year). First- half same-store sales increased by 5.6% year-on-year thanks to strong sales of products such as loungewear and HEATTECH blankets that fulfilled customer demand for stay-at-home items, as well as buoyant sales of core Fall Winter items along with ultra stretch active jogger pants and other items in our sport utility wear range. Our e-commerce operation expanded significantly, with online sales rising to 73.8 billion yen (+40.5% year-on-year) in the first half. UNIQLO Japan's first-half gross profit margin improved by 2.9 points to 50.7% on the back of strong sales, improved discounting rates resulting from more restricted discount sales, and a lower cost of sales generated by improved production efficiency. The selling, general and administrative expense ratio improved by 1.4 points to 31.0% thanks to greater efficiencies primarily in distribution costs and advertising and promotion expenses.

UNIQLO International

UNIQLO International reported a decline in revenue but a significant increase in operating profit in the first half of fiscal 2021, with revenue falling to 521.8 billion yen (−3.6% year-on-year) and operating profit rising to 67.0 billion yen (+25.9% year-on- year). UNIQLO Europe and North America saw sales struggle in the face of especially severe COVID-19 conditions, but performance in East Asia was broadly strong. Meanwhile, e-commerce sales remained strong with online sales rising in each market.

The Greater China region reported large rises in both revenue and profit in the first half as the Mainland China market along with the Taiwan market and the Hong Kong market witnessed further improvements in profits. UNIQLO Greater China's gross profit margin improved by 4.7 points year-on-year thanks to controlled discount sales, and the selling, general and administrative expense ratio improved by 2.5 points as the operation maintained appropriate inventory levels and enjoyed greater efficiencies primarily in store personnel and distribution costs following concerted efforts to boost the efficiency of store operations. The operational environment for UNIQLO South Korea continued to be tough resulting in a large decline in first-half revenue. However, improvements in the gross profit margin and selling, general and administrative expense ratio enabled the South Korean operation to post a slight operating profit compared to an operating loss in the previous year. UNIQLO S/SE Asia & Oceania reported sharp declines in both revenue and profit as the operation was adversely impacted by temporary store closures and restrictions on movement caused by COVID-19. However, Vietnam reported ongoing strong sales and a large rise in profits in the first half as the impact of COVID-19 remained low and the popularity of the UNIQLO brand increased. UNIQLO USA reported a large decline in revenue and a larger operating loss after some stores were temporarily closed or forced to limit customer numbers and people's movement outside the home was restricted. UNIQLO Europe also reported large declines in both

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revenue and profit in the first half as temporary store closures hit the operation hard. However, Russia achieved double-digit growth in first-halfsame-store sales and a large rise in operating profit as stores were not required to close temporarily in that market and sales of Winter items proved strong.

GU

The GU business segment achieved a steady year-on-year performance in the first half of fiscal 2021, with revenue totaling 132.6 billion yen (+0.3% year-on-year) and operating profit standing at 15.8 billion yen (+0.4% year-on-year).

While customer visits declined primarily in urban areas due to COVID-19,first-halfsame-store sales held steady year-on-year thanks to strong sales of the sweat-style knitwear that featured in our TV commercials, double-faced sweatshirts that successfully captured mass fashion trends, and loungewear and other items that satisfied customer demand for stay-at-home clothing. GU's gross profit margin held steady at the previous year's level, while the segment's selling, general and administrative expense ratio improved by 0.4 point thanks to stronger cost controls.

Global Brands

Global Brands reported a large decline in revenue and an operating loss in the first half of fiscal 2021. Revenue declined to 54.5 billion yen (−22.2% year-on-year) and the segment generated an operating loss of 8.1 billion yen (compared to a 0.7 billion yen profit recorded in the first half of fiscal 2020). Our Theory fashion label reported large declines in both revenue and profit as performance worsened in the United States and Japan in the face of COVID-19. Our Japan-based PLST brand reported a large decline in revenue and a slight operating loss following a reduction in customer visits primarily in urban areas. Finally, our France-based Comptoir des Cotonniers brand reported a large decline in revenue and a wider operating loss on the back of temporary store closures.

Sustainability

In keeping with our key sustainability message, "Unlocking the power of clothing," the Group pursues sustainability activities through our core clothing business focused on six clear material areas: Creating new value through products and services; Respecting human rights in our supply chain; Respecting the environment; Strengthening communities; Supporting employee fulfillment; Implementing good corporate governance. Our main activities in the second quarter of fiscal 2021 from December

2020 to February 2021 involved:

• Consideration for the environment: We respect the goal of the Paris Agreement to reduce greenhouse gas emissions by 2050, and are committed to establishing long-term reduction targets in our stores, offices and supply chain. We have started to gradually introduce renewable energy in our stores and offices. In addition, water is valuable resources for the production of clothing. Therefore, in the procurement of raw materials as well as the production, sale and use of our products, we are striving to prevent water pollution and reduce water usage, and are taking measures to address floods and other water risks. In view of these efforts, the CDP (an international non-profit organization that provides a platform for the disclosure of environmental information), included the Group in its Water Security A-List in December 2020, the highest rating for water resource measures. We have thus been recognized as a leading company in terms of active efforts and transparency in water resource management.
• Community support: In support of efforts against the COVID-19 pandemic, we have been donating masks and isolation gowns to medical institutions and nursing care facilities around the world since last year. Also, in order to provide support for refugees, among whom the impact of COVID-19 has been spreading, we have intensified our collaboration with the United Nations High Commissioner for Refugees (UNHCR). We plan to donate about a million UNIQLO AIRism masks to refugees and displaced persons in the five countries of Argentina, Iraq, Egypt, Chile and Bolivia, among others.
• Good management (governance): As our business expands globally, we are focusing on ensuring compliance, strengthening risk management systems, managing sensitive information and ensuring the thoroughness of internal audits to firmly establishing internal control systems in each country and region. The efforts of each committee are also being intensified. Our Human Rights Committee conducts human rights investigations for employees focused on harassment and discrimination, discusses improvement measures and supports their promotion. In addition, in the event that significant compliance violation is suspected based on report to the employee hotline, the Code of Conduct Committee discusses whether a violation has been committed and how to prevent its recurrence. The Risk Management Committee has been strengthening risk management in business activities, and is continually discussing and planning our response to issues such as COVID-19, the risk of major disasters such as an earthquake in Tokyo and information security risks.

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