Fast Retailing : (708KB)

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 2022

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 2022.

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, 14 April 2022, 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 Tuesday, 19 April 2022.

(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 2021 to 28 February 2022)

(Percentages represent year-on-year changes)

Revenue	Operating profit	Profit before income taxes	Profit for the period
Six months ended 28 February 2022 Six months ended 28 February 2021	Millions of yen 1,218,977 1,202,864	% 1.3 (0.5)	Millions of yen 189,278 167,982	% 12.7 22.9	Millions of yen 212,566 171,482	% 24.0 13.7	Millions of yen 154,382 109,255	% 41.3 5.6

Profit attributable to owners of the Parent	Total comprehensive income for the period	Basic earnings per share for the period	Diluted earnings per share for the period
Six months ended 28 February 2022 Six months ended 28 February 2021	Millions of yen 146,844 105,868	% 38.7 5.4	Millions of yen 201,856 132,534	% 52.3 (7.6)	Yen 1,437.41 1,036.76	Yen 1,435.21 1,035.04

(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 28 February 2022 As at 31 August 2021	Millions of yen 2,641,596 2,509,976	Millions of yen 1,321,841 1,162,298	Millions of yen 1,274,093 1,116,484	% 48.2 44.5	Yen 12,469.85 10,930.42

2. DIVIDENDS

(Declaration date)	Dividend per share
First quarter period end	Second quarter period end	Third quarter period end	Year end	Total
Year ended 31 August 2021 Year ending 31 August 2022	Yen - -	Yen 240.00 280.00	Yen	Yen	Yen
-	240.00	480.00
Year ending 31 August 2022 (forecast)	-	280.00	560.00

(Note) Revisions during this quarter of dividends forecast for fiscal year: Yes

3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2022 (1

SEPTEMBER 2021 TO 31 AUGUST 2022)

Year ending 31 August 2022

RevenueMillions of yen 2,200,000

(% shows rate of increase/decrease from previous period)

Operating profit

Profit before income taxes

Profit attributable to owners of the

Parent

% 3.1

Millions of yen 270,000

% 8.4

Millions of yen 293,200

% 10.3

Millions of yen 190,000

% 11.9

Basic earnings per share attributable to owners of the Parent
Year ending 31 August 2022	Yen 1,859.85

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

2022: Yes

* 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 (including treasury stock)	As at 28 February 2022	106,073,656 shares	As at 31 August 2021	106,073,656 shares
(ii)	Number of treasury stock	As at 28 February 2022	3,899,687 shares	As at 31 August 2021	3,928,985 shares
(iii)	Average number of issued shares	For the six months ended 28 February 2022	102,158,795 shares	For the six months ended 28 February 2021	102,114,907 shares

* 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.8 "(3) Qualitative Information Concerning Consolidated Business Results Projection".

1. Business Results

(1) Results of Operations

The Fast Retailing Group reported an increase in revenue and a large rise in profits in the first half of fiscal 2022, or the six months from 1 September 2021 to 28 February 2022, with consolidated revenue totaling 1.2189 trillion yen (+1.3% year-on-year) and operating profit rising to 189.2 billion yen (+12.7% year-on-year). That firm result can be attributed primarily to an expansion in our business operations, with strong performances reported by UNIQLO operations in the South Asia, Southeast Asia & Oceania, North America, and Europe regions. Meanwhile, UNIQLO operations in Japan and the Greater China region as well as our GU business segment reported declines in first-half revenue and profit. Fast Retailing's consolidated gross profit margin improved by 1.7 points year-on-year to 51.6% and the selling, general and administrative expense ratio increased by 1.0 points year-on-year to 36.0%. In addition, under finance income net of costs, we recorded a 23.2 billion yen foreign exchange gain on foreign-currency denominated assets and other items due to a depreciation in yen exchange rates over the six-month period. As a result, first-half profit before income taxes rose to 212.5 billion yen (+24.0% year-on-year) and profit attributable to owners of the parent increased to 146.8 billion yen (+38.7% year-on-year). Thanks to the growing diversification of our global earnings pillars, Fast Retailing achieved a record consolidated performance in the first half of fiscal 2022.

As a united Group, we are determined to strengthen initiatives designed to expand our business operations and promote sustainability as part of our quest to become a global No.1 brand. We work hard to ensure our LifeWear ultimate everyday clothing is produced in working environments that are healthy, safe, and environment conscious, and strive to help solve a variety of social issues. We are currently channeling our efforts into expanding our e-commerce, UNIQLO International, and GU businesses as key pillars of operational growth. With regards to e-commerce, we are accelerating the building of a framework that will promote our main business by melding online and physical stores so we can offer as many of the products and information that customers want, whenever they want them. We are already pressing ahead with reforms that will enable us to offer more services that combine the strengths of our physical store and e-commerce network and unify inventory management.

Regarding UNIQLO International, we are accelerating the opening of new stores in all markets and areas in which we operate, and seeking to instill deeper and more widespread empathy for UNIQLO's LifeWear concept by opening global flagship stores and large-format stores in the world's major cities. In terms of our GU segment, we are working to strengthen GU's position as a brand that offers fun fashion at amazingly low prices and seeking to expand the GU store network primarily in Japan.

UNIQLO Japan

UNIQLO Japan reported significant declines in revenue and profit in the first half of fiscal 2022, with revenue totaling 442.5 billion yen (−10.2% year-on-year) and operating profit totaling 80.9 billion yen (−17.3% year-on-year). First-half same-store sales declined by 9.0% year-on-year. This performance was being compared to a strong result in the previous year when sales of ranges such as loungewear that satisfied stay-at-home demand as well as AIRism masks proved particularly buoyant. In addition, shortages of strong-selling Winter ranges resulted in lost sales opportunities. E-commerce sales declined slightly compared to the first half of fiscal 2021 with online sales totaling 72.4 billion yen (−1.9% year-on-year). However, this figure represented an approximate 40% increase compared to the first half of fiscal 2020, so e-commerce is still trending on a favorable expansion track. UNIQLO Japan's gross profit margin improved by 0.9 point as our strategy of restricting discount sales improved discounting rates. The selling, general and administrative expense ratio increased by 2.6 points following the decline in sales.

UNIQLO International

UNIQLO International reported a significant increase in both revenue and profit in the first half of fiscal 2022, with revenue rising to 593.2 billion yen (+13.7% year-on-year) and operating profit expanding to 100.3 billion yen (+49.7% year-on-year). This impressive UNIQLO International performance was fueled primarily by large increases in both revenue and profit at UNIQLO operations in the S/SE Asia & Oceania, North America, and Europe regions. Operating profit generated by the North America and Europe regions constituted approximately 20% of the total for UNIQLO International overall. This constitutes one more earnings pillar following on from the Greater China region, which accounts for approximately 55% of the segment's operating profit. Breaking down the UNIQLO International performance into individual regions and markets, revenue declined and profit contracted significantly in the Mainland China market. This was due to weaker consumer appetite for apparel following the implementation of restrictions to control rising COVID-19 infections. Meanwhile, the Hong Kong and Taiwan markets and UNIQLO South Korea reported rises in both revenue and profit. S/SE Asia & Oceania reported significant year-on-year rises in revenue and profit. Within that region, UNIQLO operations in Malaysia and Indonesia generated particularly strong results as the easing of COVID-19 restrictions as well as stronger digital and in-store marketing helped attract customers. UNIQLO North America reported a significant rise in revenue and moved into the black in the first half. Sales expanded as we focused on conveying pertinent information to strengthen UNIQLO branding and marketing core products. The region's gross profit margin and selling, general and administrative expense ratio improved significantly on the back of restricted discount sales and anoverhaul of the operation's cost structures. UNIQLO Europe achieved significant increases in both revenue and profit as stronger marketing targeting new customers successfully broadened the customer base and the region was able to secure sufficient inventory of strong-selling core Winter ranges.

We are pursuing more determined new store openings on a global scale. We opened the UNIQLO RIVOLI Store in Paris in September 2021 and our first global flagship store in Beijing, the UNIQLO BEIJING SANLITUN Store, in November 2021. We are set to open our new UNIQLO Regent Street Store in London in April 2022. We intend to showcase the UNIQLO brand to the world from prime locations in major global cities.

GU

The GU business segment reported a decline in revenue and a considerable contraction in profit in the first half of fiscal 2022, with revenue falling to 122.8 billion yen (−7.4% year-on-year) and operating profit contracting to 9.3 billion yen (−40.9% year-on-year). First-half sales declined as persistently warm weather early on in the season stifled sales of Fall items and, despite strong sales of knitwear, bottoms, and other Winter items, delays in production and distribution prevented us from procuring

strong-selling items in a timely manner and resulted in lost sales opportunities. GU's gross profit margin declined by 0.4 point as the sharp rises in raw materials prices and shipping costs resulted in a slightly higher cost of sales. GU's selling, general and

administrative expense ratio increased by 3.6 points. However, this was due to a temporary increase in distribution costs linked to the launch of automated warehousing in Western Japan to help expand e-commerce operations as well as stronger marketing to boost brand recognition.

Global Brands

The Global Brands segment reported a rise in revenue and a move back into the black in the first half of fiscal 2022. The segment generated revenue of 58.9 billion yen (+8.1% year-on-year) and an operating profit of 1.0 billion yen (compared to an 8.1 billion yen loss recorded in the first half of fiscal 2021). Our Theory operation generated strong increases in both revenue and profit thanks primarily to a recovery in performance and a move back into the black for Theory in the United States. PLST reported a decline in revenue and a wider operating loss as the operation was adversely impacted by Japan's COVID-19-related state of emergency and semi-state of emergency measures and was unable to release products and convey product news that would attract customers. Our France-based Comptoir des Cotonniers operation reported higher revenue and a considerably lower operating loss in the first half as customer numbers in France recovered compared to the previous year, which was hit hard by rising COVID-19 infections. Meanwhile, the permanent closure of unprofitable stores and other structural reforms improved cost efficiencies.

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 and Implementing good corporate governance. Our main activities for the current period involved:

■ Respecting human rights in our supply chain: In order to improve the quality of life of the people working in our supply chain, in December 2021 we not only guaranteed our workers a minimum wage, but also announced targets and initiatives aimed at providing a living wage (a level of pay that meets a person's fundamental needs such as clothing, shelter and food, and allows them to lead a reasonable social life). Please see our website for more details:https://www.fastretailing.com/jp/about/frway/pdf/LivingWageCommitment_jp.pdf

■ Consideration for the environment: For the second year running, we have been selected as a Supplier Engagement Leader by CDP, an international non-profit organization that provides a platform for the disclosure of environmental information. Supplier Engagement Leader is the highest rank given by the Supplier Engagement Rating, which assesses how effectively companies work with their suppliers to combat climate change. It was only awarded to the top 8% of companies surveyed globally in 2021.

Fast Retailing was recognized for incorporating our climate response into our business strategy and working on reducing greenhouse gas emissions in our supply chain(https://www.fastretailing.com/jp/sustainability/news/2202161500.html).