Fast Retailing : Results Announcement

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)

FIRST QUARTERLY RESULTS ANNOUNCEMENT

FOR THE THREE MONTHS ENDED 30 NOVEMBER 2019

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 three months ended 30 November 2019.

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, 9 January 2020, 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, 10 January 2020.

(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 2019 to 30 November 2019)

(Percentages represent year-on-year changes)

	Revenue		Operating profit	Profit before		Profit for the period
		income taxes
	Millions		%	Millions	%	Millions		%	Millions		%
	of yen		of yen	of yen		of yen
Three months ended 30 November 2019	623,484		(3.3)	91,690	(12.4)	102,015		(8.2)	71,840		(10.5)
Three months ended 30 November 2018	644,466		4.4	104,665	(8.1)	111,086		(5.7)	80,285		(5.2)
	Profit attributable to	Total comprehensive	Basic earnings		Diluted earnings
	per share for the		per share for the
	owners of the Parent	income for the period
	period		period
	Millions		%	Millions	%			Yen			Yen
	of yen		of yen
Three months ended 30 November 2019	70,907		(3.5)	110,125	6.1	694.73			693.59
Three months ended 30 November 2018	73,476		(6.4)	103,831	8.7	720.16			719.01

1

(2) Consolidated Financial Position

			Equity	Ratio of equity	Equity per
			attributable	share
			attributable
	Total assets	Total equity	to 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 30 November 2019	2,528,281	1,034,201	988,554	39.1	9,685.06
As at 31 August 2019	2,010,558	983,534	938,621	46.7	9,196.61
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 2019	-	240.00	-	240.00	480.00
Year ending 31 August 2020	-
Year ending 31 August 2020 (forecast)		250.00	-	250.00	500.00

(Note) Revisions during this quarter of dividends forecast for fiscal year: None

3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2020 (1 SEPTEMBER 2019 TO 31 AUGUST 2020)

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

	Revenue		Operating profit		Profit before income taxes	Profit attributable to
			owners of the Parent
	Millions		%	Millions		%	Millions	%	Millions		%
	of yen		of yen		of yen	of yen
Year ending	2,340,000		2.2	245,000		(4.9)	245,000	(2.9)	165,000		1.5
31 August 2020
	Basic earnings
	per share attributable
	to owners
	of the Parent
			Yen
Year ending	1,616.54
31 August 2020

(Note) Revisions during this quarter of previously disclosed consolidated business results projection for the year ending 31 August 2020: Yes

2

* Notes
(1) Changes of principal subsidiaries in the period:	None

1. Changes in accounting policies and changes in accounting estimates:

(i)	Changes in accounting policies to conform with IFRS:	Yes
(ii)	Other changes in accounting policies:	None
(iii)	Changes in accounting estimates:	None

1. Total number of issued shares (Common stock)

(i)	Number of issued shares	As at 30 November 2019	106,073,656 shares	As at 31 August 2019	106,073,656 shares
	(including treasury stock)
(ii)	Number of treasury stock	As at 30 November 2019	4,003,594 shares	As at 31 August 2019	4,011,921 shares
(iii)	Average number of issued shares	For the three months	102,064,495 shares	For the three months	102,027,782 shares
		ended 30 November		ended 30 November
		2019		2018

*This first quarterly 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".

3

1. Business Results

(1) Results of Operations

The Fast Retailing Group revenue and profit both declined in the first quarter of fiscal 2020, or the three months from 1 September 2019 to 30 November 2019. Consolidated revenue totaled 623.4 billion yen (-3.3%year-on-year) and operating profit totaled 91.6 billion yen (-12.4%year-on-year). This weaker performance was due primarily to significant reductions in profit from both UNIQLO South Korea and UNIQLO Hong Kong and a lower-than-expected improvement in profits from UNIQLO Japan. The first-quarter consolidated gross profit margin declined 0.2 point year-on-year to 50.2% and the first-quarter selling, general and administrative expense ratio increased by

1.5 points to 35.9%. In addition, we recorded 10.3 billion yen under finance income net of costs after reporting a net 9.2 billion yen of foreign-exchange gain on our long-term holdings of foreign-currency denominated assets. As a result, first-quarter profit before income taxes declined to 102.0 billion yen (-8.2%year-on-year) and profit attributable to owners of the Parent declined to 70.9 billion yen (-3.5%year-on-year).

The Group's medium-term vision is to become the world's number one apparel retailer. In pursuit of this aim, we are focusing our efforts on expanding UNIQLO International, as well as our GU brand and our global e-commerce operation. We continue to increase UNIQLO store numbers in each markets and areas in which we operate, and open global flagship stores and large-format stores in major cities around the world to instill deeper and more widespread empathy for UNIQLO's LifeWear concept. Within the UNIQLO International segment, Greater China (Mainland China, Hong Kong and Taiwan) and Southeast Asia are serving as the key pillars of our Group business and growth. In terms of our GU segment, in addition to expanding the GU store network primarily in Japan, we are working to establish GU's position as the brand that offers fun fashion at amazingly low prices.

UNIQLO Japan

UNIQLO Japan segment reported a decline in revenue but a rise in profit in the first quarter of fiscal 2020, with revenue totaling 233.0 billion yen (-5.3%year-on-year) and operating profit totaling 38.5 billion yen (+1.6% year-on-year).First-quartersame-store sales, including online sales, declined by 4.1% year-on-year. Despite multiple strong-selling items, including new curved pants, souffle yarn sweaters, trendy sweat shirts and pants, and leggings, the decline in same-store sales was caused by weaker demand for thermal clothing during the warm weather and our inability to sufficiently convey the attractiveness of in-focus, newsworthy products to our customers. E-commerce sales growth also slowed for the same reasons as for our physical stores, with online sales totaling 24.7 billion yen (+4.1% year-on-year) in the first quarter. UNIQLO Japan's gross profit margin improved by 2.3 points on the back of an appreciation in the yen exchange rate for merchandise purchasing. The selling, general and administrative expense ratio increased 1.0 point to 33.3%, but declined in monetary terms as expected.

UNIQLO International

UNIQLO International segment reported a decline in revenue and profit in the first quarter of fiscal 2020, with revenue falling to 280.7 billion yen (-3.6%year-on-year) and operating profit declining to 37.8 billion yen (-28.0%year-on-year). However, if we strip out the significant declines in revenue and profit from South Korea and Hong Kong, the remaining UNIQLO International markets generated rising first-quarter revenue and profit. Furthermore, following an early rundown of excess inventories at each operation, UNIQLO International's overall gross profit margin contracted by 3.0 points year-on-year, while the selling, general and administrative expense ratio increased 1.4 points on the back of lower-than-expected total sales.

Looking at individual regions, if we strip out the exchange rate effect, both revenue and profit from UNIQLO Greater China increased. However, if we include the yuan depreciation effect and the decline in Hong Kong profit, UNIQLO Greater China operating profit declined in the three months ended 30 November 2019. Revenue and profit from Mainland China increased on strong sales of Fall Winter ranges such as sweat shirts and pants, fleece, and flannel items. Mainland China e-commerce sales also continued to be strong, expanding by approximately 30% year-on-year. Meanwhile, UNIQLO South Korea same-store sales declined sharply on the back of a move to boycott Japanese products that began in July 2019, resulting in an operating loss in the first quarter. Other Asia & Oceania operation, which includes Southeast Asian nations, Australia and India, continues to expand favorably, generating significant increases in both revenue and profit in the first quarter as expected. Within that grouping, Indonesia and the Philippines reported an especially strong performance led by double-digit growth in same-store sales. We swiftly followed the opening of our first store in India in October 2019 with the opening of a second store in Delhi in November 2019. Both stores are performing strongly. UNIQLO North America reported rising revenue and profit on the back of revenue and profit increases from Canada. While UNIQLO Europe reported double-digit growth in first- quarter revenue, operating profit contracted slightly due to local currency depreciation. New operations launched over the past couple of years in Spain, the Netherlands, and Italy performed strongly, with Italy in particular reporting higher-than-expected sales.

4

GU

GU segment reported significant increases in both revenue and profit in the first quarter of fiscal 2020, with revenue climbing to 72.9 billion yen (+11.4% year-on-year) and operating profit expanding to 12.3 billion yen (+44.4% year-on-year).Same-store sales increased due to a product mix that adapted successfully to the warmer weather, as well as strong sales knitwear promoted in TV commercials and advertising campaigns, and light outerwear. On the profit front, GU's gross profit margin improved by an impressive 3.2 points in the first quarter due to a decline in the cost of sales generated by further aggregate purchasing of core materials and early submission of production orders, and less discounting of excess stock. GU's selling, general and administrative expense ratio also improved by 0.7 point due to improvements in the personnel cost ratio achieved through greater efficiency of store operations and a lower advertising and promotion cost ratio.

Global Brands

Global Brands segment revenue and profit both declined in the first quarter of fiscal 2020. Revenue totaled 36.1 billion yen (-11.4% year- on-year) and operating profit at 1.8 billion yen (-31.5%year-on-year). Our Theory fashion label reported a decline in both revenue and profit after sales of winter items struggled slightly in Japan and USA due to the warmer weather worldwide. Our Japan-based PLST brand also reported a decline in revenue and profit. While clothes manufactured using our "cut-and-sew" method, cardigans and other Fall items sold well, sales of thermal outerwear and bottoms struggled. Finally, our France-based Comptoir des Cotonniers brand remained its operating loss in the first quarter compared with the same period of fiscal 2019.

Sustainability

In keeping with our key sustainability message, "Unlocking the power of clothing," Fast Retailing pursues sustainability activities through our core clothing business focused on six clear material areas: Creating new value through products and services; Respecting human rights in our supply chain; Respecting the environment; Strengthening communities; Supporting employee fulfillment; Implementing good corporate governance. Our main activities in the first quarter of fiscal 2020 from September to December 2019 involved:

• Creating new value through products and services: UNIQLO Japan started a new recycling initiative in November 2019 that uses the down extracted from qualitysecond-hand down items brought in by customers to any UNIQLO store in the country as material for new down products. From September 2019, we had collected approximately 620,000 second-hand down items under this project. We also plan to start producing high-functioning,quick-drying Dry Ex products using recycled polyester in some of our scheduled 2020 Spring Summer ranges. These initiatives show how we are creating new clothing value by using new technologies to encourage the reuse of resources.
• Respecting the environment: In October 2019, our UNIQLO Kawagoe Store won the Industry Pioneer award hosted by thenon-profit U.S. Green Buildings Council (USGBC) for its cutting-edge initiatives to reduce the environmental impact of its operations, and became the first retail store in Japan to receive a Gold certification under the USGBC's Leadership in Energy & Environmental Design (LEED) rating program that certifies environmentally conscious buildings and construction spaces. In addition, we joined industry-wide organizations including the Japan-based Clean Ocean Material Alliance (CLOMA) and the UK-based The Microfiber Consortium (TMC) to help address the problem of plastic waste in oceans.
• Strengthening communities: In October 2019, we donated approximately 70,000 items of outerwear, fleece and innerwear totyphoon-struck areas in the Tohoku region of Northeast Japan. Then, in November 2019, we decided to contribute 1 million US dollars to refugee-support activities in Mali and South Sudan operated by the United Nations Refugee Agency (UNHCR).

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1. Financial Positions and Cash Flows Information
   (i) Financial Positions

Total assets as at 30 November 2019 were 2,528.2 billion yen, which was an increase of 517.7 billion yen relative to the end of the preceding fiscal year. The principal factors were an increase of 80.4 billion yen in trade and other receivables, an increase of 14.1 billion yen in other financial assets, an increase of 14.0 billion yen in inventories, a decrease of 27.5 billion yen in property, plant and equipment, an increase of 389.8 billion yen in right-of-use assets and an increase of 18.9 billion yen in derivative financial assets.

Total liabilities as at 30 November 2019 were 1,494.0 billion yen, which was an increase of 467.0 billion yen relative to the end of the preceding fiscal year. The principal factors were an increase of 35.6 billion yen in trade and other payables, an increase of 30.7 billion yen in other financial liabilities, an increase of 9.3 billion yen in current tax liabilities, a decrease of 29.2 billion yen in non-current financial liabilities, an increase of 443.5 billion yen in lease liabilities and a decrease of 13.0 billion yen in other non-current liabilities.

Furthermore, the increases of right-of-use assets and lease liabilities are due to the application of IFRS 16 Leasesas mentioned in "(6) Notes to the Interim Condensed Consolidated Financial Statements 1. Changes in accounting policies".

Total net assets as at 30 November 2019 were 1,034.2 billion yen, which was an increase of 50.6 billion yen relative to the end of the preceding fiscal year. The principal factors were an increase of 13.5 billion yen in retained earnings and an increase of 33.7 billion yen in other components of equity.

(ii) Cash Flows Information

Cash and cash equivalents as at 30 November 2019 had increased by 28.5 billion yen from the end of the preceding fiscal year, to 1,115.0 billion yen.

(Operating Cash Flows)

Net cash generated by operating activities for the three months ended 30 November 2019 was 97.6 billion yen, which was an increase of 67.5 billion yen (+224.0% year-on-year) from the three months ended 30 November 2018. The principal factors were 102.0 billion yen in profit before income taxes (a decrease of 9.0 billion yen from the three months ended 30 November 2018), 9.2 billion yen in foreign exchange gains (a decrease of 4.2 billion yen from the three months ended 30 November 2018), 43.0 billion yen in depreciation and amortization (an increase of 31.0 billion yen from the three months ended 30 November 2018), an increase of 77.2 billion yen in trade and other receivables (a decrease of 2.9 billion yen from the three months ended 30 November 2018), an increase of 4.9 billion yen in inventories (a decrease of 20.4 billion yen from the three months ended 30 November 2018), an increase of 32.0 billion yen in trade and other payables (an increase of 42.6 billion yen from the three months ended 30 November 2018), an increase of 31.7 billion yen in other liabilities (an increase of 42.3 billion yen from the three months ended 30 November 2018) and 22.0 billion yen in income taxes paid (a decrease of 8.1 billion yen from the three months ended 30 November 2018).

(Investing Cash Flows)

Net cash used in investing activities for the three months ended 30 November 2019 was 33.2 billion yen, which was an increase of 2.0 billion yen (+6.6% year-on-year) from the three months ended 30 November 2018. The principal factors were 9.1 billion yen in bank deposits with original maturity over three months (a decrease of 2.8 billion yen from the three months ended 30 November 2018), 14.1 billion yen in payments for property, plant and equipment (an increase of 1.9 billion yen from the three months ended 30 November 2018), and 2.6 billion yen in payments for right-of-use assets (an increase of 2.6 billion yen from the three months ended 30 November 2018).

(Financing Cash Flows)

Net cash used in financing activities for the three months ended 30 November 2019 was 56.6 billion yen, which was an increase of

29.4 billion yen (+108.7% year-on-year) from the three months ended 30 November 2018. The principal factor was 32.8 billion yen in repayments of lease liabilities (an increase of 32.8 billion yen from the three months ended 30 November 2018).

6

(3) Qualitative Information Concerning Consolidated Business Results Projection

We have revised down our business estimates for the full year ending 31 August 2020 to reflect our corporate results in the first quarter ended 30 November 2019 and subsequent month of December and in consideration of current conditions in South Korea and Hong Kong.

In addition, below are the differences of the consolidated business results projections for the year ending 31 August 2020 as reported in the "Annual results announcement for the year ended 31 August 2019 and resumption on of trading" released on 10 October 2019.

(Full financial year)

				Profit attributable	Basic earnings per
	Revenue		Profit before	share attributable
	Operating profit	income taxes	to owners of the	to owners of the
				Parent	Parent
	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen
Previous forecast (A)	2,400,000	275,000	275,000	175,000	1,714.65
New forecast (B)	2,340,000	245,000	245,000	165,000	1,616.54
Difference (B-A)	(60,000)	(30,000)	(30,000)	(10,000)	-
Change (%)	(2.5)	(10.9)	(10.9)	(5.7)	-
Previous results	2,290,548	257,636	252,447	162,578	1,593.20

7

2. Interim Condensed Consolidated Financial Statements and Accompanying Material Notes

(1) Interim Condensed Consolidated Statement of Financial Position

		(Millions of yen)
	As at 31 August	As at 30 November
	2019	2019
ASSETS
Current assets
Cash and cash equivalents	1,086,519	1,115,031
Trade and other receivables	60,398	140,834
Other financial assets	44,473	58,649
Inventories	410,526	424,615
Derivative financial assets	14,787	16,938
Income taxes receivable	1,492	1,246
Other assets	19,975	18,693
Total current assets	1,638,174	1,776,010
Non-current assets
Property, plant and equipment	162,092	134,583
Right-of-use assets	―	389,820
Goodwill	8,092	8,092
Intangible assets	60,117	63,639
Financial assets	77,026	68,105
Investments in associates accounted for using
the equity method	14,587	14,543
Deferred tax assets	33,163	37,442
Derivative financial assets	9,442	26,197
Other assets	7,861	9,845
Total non-current assets	372,384	752,271
Total assets	2,010,558	2,528,281
Liabilities and equity
LIABILITIES
Current liabilities
Trade and other payables	191,769	227,427
Other financial liabilities	159,006	189,780
Derivative financial liabilities	2,985	1,317
Lease liabilities	―	104,646
Current tax liabilities	27,451	36,769
Provisions	13,340	691
Other liabilities	82,103	79,406
Total current liabilities	476,658	640,039
Non-current liabilities
Financial liabilities	499,948	470,675
Lease liabilities	―	338,869
Provisions	20,474	34,011
Deferred tax liabilities	8,822	5,971
Derivative financial liabilities	3,838	263
Other liabilities	17,281	4,250
Total non-current liabilities	550,365	854,041
Total liabilities	1,027,024	1,494,080
EQUITY
Capital stock	10,273	10,273
Capital surplus	20,603	23,167
Retained earnings	928,748	942,343
Treasury stock, at cost	(15,271)	(15,245)
Other components of equity	(5,732)	28,015
Equity attributable to owners of the Parent	938,621	988,554
Non-controlling interests	44,913	45,646
Total equity	983,534	1,034,201
Total liabilities and equity	2,010,558	2,528,281

8

1. Interim Condensed Consolidated Statement of Profit or Loss and Interim Condensed Consolidated Statement of Comprehensive IncomeInterim Condensed Consolidated Statement of Profit or Loss

			(Millions of yen)
		Three months ended	Three months ended
	Notes	30 November 2018	30 November 2019
Revenue	3	644,466	623,484
Cost of sales		(319,658)	(310,560)
Gross profit		324,808	312,923
Selling, general and administrative expenses	4	(221,515)	(224,098)
Other income	5	1,951	4,083
Other expenses	5	(769)	(1,467)
Share of profit and loss of associates accounted for using
the equity method		189	249
Operating profit		104,665	91,690
Finance income	6	7,560	12,219
Finance costs	6	(1,139)	(1,894)
Profit before income taxes		111,086	102,015
Income tax expense		(30,801)	(30,174)
Profit for the period		80,285	71,840
Profit for the period attributable to:
Owners of the Parent		73,476	70,907
Non-controlling interests		6,808	932
		80,285	71,840
Earnings per share
Basic (yen)	7	720.16	694.73
Diluted (yen)	7	719.01	693.59
Interim Condensed Consolidated Statement of Comprehensive Income
			(Millions of yen)
		Three months ended	Three months ended
		30 November 2018	30 November 2019
Profit for the period		80,285	71,840
Other comprehensive income, net of income tax
Items that will not be reclassified subsequently to profit or loss
Financial assets measured at fair value through
other comprehensive income		(116)	18
Total items that will not be reclassified subsequently to profit or loss	(116)	18
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations		6,835	18,002
Cash flow hedges		16,807	20,244
Share of other comprehensive income of associates		18	19
Total items that may be reclassified subsequently to profit or loss	23,662	38,266
Other comprehensive income, net of income tax		23,545	38,284
Total comprehensive income for the period		103,831	110,125
Attributable to:
Owners of the Parent		96,072	107,628
Non-controlling interests		7,759	2,496
Total comprehensive income for the year		103,831	110,125

9

1. Interim Condensed Consolidated Statement of Changes in EquityFor the three months ended 30 November 2018

											(Millions of yen)
						Other components of equity
					Financial assets
					measured					Equity
					at fair value	Foreign		Share of other		attributable
				Treasury	through other	currency	Cash flow	comprehensive		to owners	Non-
	Capital	Capital	Retained	stock,	comprehensive	translation	hedge	income of		of the	controlling	Total
	stock	surplus	earnings	at cost	income	reserve	reserve	associates	Total	Parent	interests	equity
As at 1 September 2018	10,273	18,275	815,146	(15,429)	37	15,429	19,202	-	34,669	862,936	39,841	902,777
Net changes during the period
Comprehensive income
Profit for the period	-	-	73,476	-	-	-	-	-	-	73,476	6,808	80,285
Other comprehensive
income/(loss)	-	-	-	-	(116)	6,145	16,548	18	22,595	22,595	950	23,545
Total comprehensive
income/(loss)	-	-	73,476	-	(116)	6,145	16,548	18	22,595	96,072	7,759	103,831
Transactions with the owners
of the Parent
Disposal of treasury stock	-	508	-	63	-	-	-	-	-	572	-	572
Dividends	-	-	(24,484)	-	-	-	-	-	-	(24,484)	(3,531)	(28,016)
Share-based payments	-	1,649	-	-	-	-	-	-	-	1,649	-	1,649
Incorporation of
a new subsidiary	-	-	-	-	-	-	-	-	-	-	250	250
Changes in ownership
interests in subsidiaries
without losing control	-	-	-	-	-	-	-	-	-	-	169	169
Total transactions with
the owners of the Parent	-	2,157	(24,484)	63	-	-	-	-	-	(22,262)	(3,111)	(25,374)
Total net changes during the period	-	2,157	48,991	63	(116)	6,145	16,548	18	22,595	73,809	4,648	78,457
As at 30 November 2018
10,273	20,433	864,138	(15,365)	(79)	21,575	35,750	18	57,265	936,745	44,489	981,234

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For the three months ended 30 November 2019

												(Millions of yen)
							Other components of equity
						Financial assets
						measured					Equity
						at fair value	Foreign		Share of other		attributable
					Treasury	through other	currency	Cash flow	comprehensive		to owners	Non-
		Capital	Capital	Retained	stock,	comprehensive	translation	hedge	income of		of the	controlling	Total
	Note	stock	surplus	earnings	at cost	income	reserve	reserve	associates	Total	Parent	interest	equity
As at 1 September 2019		10,273	20,603	928,748	(15,271)	(697)	(13,929)	8,906	(11)	(5,732)	938,621	44,913	983,534
Adjustments due to changes	1	-	-	(32,817)	-	-	-	-	-	-	(32,817)	(1,386)	(34,204)
in accounting policy
Effect of change in counting		10,273	20,603	895,930	(15,271)	(697)	(13,929)	8,906	(11)	(5,732)	905,803	43,526	949,329
policy
Net changes during the period
Comprehensive income		-	-	70,907	-	-	-	-	-	-	70,907	932	71,840
Profit for the period
Other comprehensive		-	-	-	-	18	15,811	20,872	19	36,721	36,721	1,563	38,284
income
Total comprehensive income		-	-	70,907	-	18	15,811	20,872	19	36,721	107,628	2,496	110,125
Transactions with the owners
of the Parent
Acquisition of		-	-	-	(5)	-	-	-	-	-	(5)	-	(5)
treasury stock
Disposal of treasury stock		-	291	-	32	-	-	-	-	-	323	-	323
Dividends		-	-	(24,494)	-	-	-	-	-	-	(24,494)	-	(24,494)
Share-based payments		-	2,271	-	-	-	-	-	-	-	2,271	-	2,271
Transfer to		-	-	-	-	-	-	(2,973)	-	(2,973)	(2,973)	(375)	(3,349)
non-financial assets
Total transactions with		-	2,563	(24,494)	26	-	-	(2,973)	-	(2,973)	(24,878)	(375)	(25,254)
the owners of the Parent
Total net changes		-	2,563	46,412	26	18	15,811	17,898	19	33,747	82,750	2,120	84,871
during the period
As at 30 November 2019		10,273	23,167	942,343	(15,245)	(679)	1,881	26,804	8	28,015	988,554	45,646	1,034,201

11

(4) Interim Condensed Consolidated Statement of Cash Flows

		(Millions of yen)
	Three months ended	Three months ended
	30 November 2018	30 November 2019
Cash flows from operating activities
Profit before income taxes	111,086	102,015
Depreciation and amortization	11,982	43,067
Impairment losses	-	836
Interest and dividend income	(2,530)	(2,921)
Interest expenses	1,139	1,894
Foreign exchange gains	(5,030)	(9,297)
Share of profit and loss of associates accounted for
using the equity method	(189)	(249)
Losses on disposal of property, plant and equipment	59	73
Increase in trade and other receivables	(74,305)	(77,222)
Decrease/(increase) in inventories	15,510	(4,963)
(Decrease)/increase in trade and other payables	(10,562)	32,042
Decrease/(increase) in other assets	1,396	(65)
(Decrease)/increase in other liabilities	(10,640)	31,703
Others, net	3,988	965
Cash generated from operations	41,904	117,879
Interest and dividends income received	2,461	2,891
Interest paid	(361)	(1,081)
Income taxes paid	(13,867)	(22,039)
Net cash generated by operating activities	30,136	97,650
Cash flows from investing activities
Amounts deposited into bank deposits with
original maturities of three months or longer	(29,175)	(30,454)
Amounts withdrawn from bank deposits with
original maturities of three months or longer	17,153	21,327
Payments for property, plant and equipment	(12,176)	(14,127)
Payments for intangible assets	(5,912)	(5,433)
Payments for acquisition of Right-of-use assets	-	(2,636)
Payments for lease and guarantee deposits	(1,346)	(1,609)
Proceeds from collection of lease and guarantee deposits	858	1,000
Others, net	(595)	(1,334)
Net cash used in investing activities	(31,195)	(33,267)

12

		(Millions of yen)
	Three months ended	Three months ended
	30 November 2018	30 November 2019
Cash flows from financing activities
Proceeds from short-term loans payable	1,257	625
Repayment of short-term loans payable	(967)	-
Dividends paid to owners of the Parent	(24,455)	(24,473)
Capital contributions from non-controlling interests	420	-
Dividends paid to non-controlling interests	(560)	-
Repayments of financial lease obligations	(2,878)	-
Repayments of lease liabilities	-	(32,819)
Others, net	39	26
Net cash used in financing activities	(27,144)	(56,640)
Effect of exchange rate changes on the balance of cash held
in foreign currencies	7,594	20,769
Net (decrease)/increase in cash and cash equivalents	(20,609)	28,511
Cash and cash equivalents at the beginning of period	999,697	1,086,519
Cash and cash equivalents at the end of period	979,087	1,115,031

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1. Notes to assumption of going concernNot applicable.
2. Notes to the Interim Condensed Consolidated Financial Statements1. Changes in accounting policies

(1) Application of IFRS 16: Leases

The Group began applying IFRS 16 Leases(announced in January 2016; hereinafter "IFRS 16"), from the first quarter of the current fiscal year. In applying IFRS 16, the Group has adopted the cumulative catch-up approach that recognizes the cumulative effect of initial application of the standard as at the date of initial application (1 September 2019) as a transition method, without restating comparative information.

1) Definition of lease

The application of IFRS 16 requires that a judgment be made at the inception of a contract as to whether a contract is, or contains, a lease. If a contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration,the contract is, or contains, a lease.

To determine whether or not a contract conveys the right to control the use of an identified asset, the Group examines whether the contract includes the use of the specified asset, whether the Group has the right to obtain substantially all of the economic benefits from use of identified asset throughout the period of use, and whether the Group has the right to direct the use of the identified asset.

2) Accounting treatment of leases

2.1) Leases in which Fast Retailing Group is the lessee

Separate from short-term leases or leases for which the underlying asset is of low value, the Group accounts for each lease component within the contract as a lease and recognizes a right-of-use asset and a lease liability. On the date of commencement of a lease, the right-of- use asset is measured at cost, and the lease liability is calculated as the present value of lease payments outstanding.

The cost of the right-of-use asset is mainly composed of the initial measurement of the lease liability, initial direct costs and the amount of any prepaid lease payments. Furthermore, the discount rate used to calculate the present value of lease payments is the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee's incremental borrowing rate is used.

The lease term is determined as the non-cancelable period which includes an option to extend the lease (if it is reasonably certain that the Group will exercise that option), or an option to cancel the lease (if it is reasonably certain that the Group will not exercise that option).

After the commencement date, the right-of-use asset is measured at cost less any accumulated depreciation and any accumulated impairment losses. When depreciating right-of-use assets, the Group applies the depreciation requirements in IAS 16 Property, Plant and Equipment. In addition, the Group applies IAS 36, Impairment of Assets, to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Depreciation of right-of-use asset is measured from the commencement date to the end of the useful life of the underlying asset if ownership of the underlying asset is to be transferred to the Group by the end of the lease term, or if it is reasonably certain that the lessee purchase options will be exercised; otherwise the straight-line method will be used to calculate depreciation from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

After the commencement date, the carrying amount of the lease liability is increased to reflect the interest rates on the lease liability and reduced to reflect any lease payments made. Furthermore, any reassessment or lease modifications, or to reflect revised in-substance fixed lease payments is remeasured.

The Group uses the straight-line basis to recognize any lease payments associated with short-term leases or leases for which an underlying asset is of low value.

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2.2) Leases in which the Group is the lessor

The Group classifies a lease as either a finance lease or an operating lease at the inception of the lease contract.

To classify each lease, the Group comprehensively assesses whether all the risks and rewards incidental to ownership of the underlying asset will be substantially transferred or not. If the risks and rewards value are to be transferred, the lease is classified as a finance lease; if not, it is classified as an operating lease.

If the Group is acting as an intermediate lessor, the Group accounts for head leases and subleases separately. A sublease classification is determined by reference to the right-of-use asset arising from the head lease, rather than by reference to the underlying asset.

The Group recognizes lease payments from operating leases as lease income on a straight-line basis over the lease term.

Lease payments from finance leases are recognized at the commencement date as assets held under finance leases and presented as receivables at an amount equal to the net investment in the lease.

3) Treatment on transition

In applying IFRS 16, the Group applies the practical expedient in place of the judgments previously used to determine whether or not a contract is a lease. Consequently, the requirements in IFRS 16 is applied only to contracts entered into or changed on or after 1 September 2019.

3.1) Leases in which the Group is the lessee

(Leases previously classified as operating leases applying IAS 17)

Lease liabilities on transition are measured at the present value of the remaining lease payments discounted using the lessee's incremental borrowing rate as at 1 September 2019. In addition, right-of-use assets on transition are measured using one of the following methods.

• Its carrying amount calculated on the assumption that IFRS 16 was applied from the commencement of the lease. Note that the discount rate used is the lessee's incremental borrowing rate on the date of initial application of IFRS 16.
• The amount measured for the lease liability, is adjusted by the amount of any prepaid or accrued lease payments.

Note that the followings apply when IFRS 16 is applied to leases that were previously classified as operating leases IAS 17.

• A single discount rate is applied to a portfolio of leases with reasonably similar characteristics.
• Leases for which the lease term ends within 12 months of the date of initial application of IFRS 16 are accounted for in the same way asshort-term leases.
• Initial direct costs are excluded from the measurement ofright-of-use assets at the date of initial application of IFRS 16.
• The Group uses hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease.

(Leases previously classified as operating leases applying IAS 17)

The Group accounts the carrying amount of the right-of-use asset and the lease liability at the date of initial application at the amount of the lease asset and lease liability applying IAS 17 immediately prior to the date of initial application of IFRS 16.

3.2) Leases in which the Group is the lessor

Leases in which the Group acts as lessor require no adjustment on transition to IFRS 16, except for subleases. Subleases will be accounted in accordance with the transition provisions under IFRS 16 as stated below.

• In applying IFRS 16, the Group classifies sublease transactions as at the date of initial application as either operating leases or finance leases. This classification is determined based on the basis of the remaining contractual terms and conditions of the head lease and sublease at that date.
• Any subleases classified as operating leases applying IAS 17 but finance leases applying IFRS 16 are accounted for as new finance leases entered into at the date of initial application.

15

4) Impact on condensed quarterly consolidated financial statements

With the application of IFRS 16, the Group recognized an additional 368,714 million yen in right-of-use assets, 420,488 million yen in lease liabilities and a decrease of 32,817 million yen in retained earnings in its interim condensed consolidated statement of financial position at the start of the fiscal year.

The weighted average of the lessee's incremental borrowing rate applied to lease liabilities recognized in interim condensed consolidated statement of financial position as at the date of initial application of IFRS 16 is 0.9%.

The major factors for the difference in the commitment amount related to operating leases applying IAS 17 disclosed in interim condensed consolidated statement of financial position as at 31 August 31 2019 and the lease liabilities recognized in interim condensed consolidated statement of financial position as at the date of initial application of IFRS 16 are as follows.

	(Unit: Million Yen)
Minimum future lease payments for non-cancelable operating lease contracts (31 August 2019)	344,888
Present value of non-cancelable operating lease contracts (31 August 2019)	337,009
Finance lease obligations (31 August 2019)	38,726
Extension or termination options that are reasonably certain to be exercised	44,751
Lease liabilities recognized in interim condensed consolidated statement of financial position as at the date
of initial application
of IFRS 16	420,488

(2) Application of IFRIC 23: Uncertainty over income tax treatments

IFRIC 23 interpretations are additional to the requirement of IAS 12 Income Taxesand establish accounting procedures for uncertain tax positions, such as items with no clear tax treatment or items related to matters that are not yet resolved with the tax authorities. If it is determined that the tax treatment used by the Group is not likely to be approved by the tax authorities, the Group's calculation of taxable income will recognize additional taxable income in an amount equivalent to the impact of that uncertainty, using either the most likely amount or expected value.

The application of IFRIC 23 does not have a significant impact on the Group's condensed quarterly consolidated financial statements.

2. Segment Information

(i) Description of reportable segments

The Group's reportable segments are components for which discrete financial information is available and which are reviewed 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, UNIQLO International, GU and Global Brands, each of which is used to frame and form Group's strategy.

The main businesses covered by each reportable segment are as follows:

UNIQLO Japan: UNIQLO clothing business within Japan

UNIQLO International: UNIQLO clothing business outside of Japan

GU: GU clothing business in Japan and overseas

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

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(ii) Segment revenue and results

For the three months ended 30 November 2018

							(Millions of yen)
		Reportable segments					Interim
					Total	Others	Adjustments	Condensed
		UNIQLO			Consolidated
	UNIQLO Japan	GU	Global Brands	(Note 1)	(Note 2)
	International		Statement of
								Profit or Loss
Revenue	246,140	291,382	65,493	40,775	643,792	674	-	644,466
Operating profit	37,958	52,564	8,568	2,729	101,820	44	2,799	104,665
Segment income
(i.e., Profit before income	38,314	52,616	8,537	2,685	102,154	45	8,887	111,086
taxes)

(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.

For the three months ended 30 November 2019

							(Millions of yen)
		Reportable segments					Interim
					Total	Others	Adjustments	Condensed
		UNIQLO			Consolidated
	UNIQLO Japan	GU	Global Brands	(Note 1)	(Note 2)
	International		Statement of
								Profit or Loss
Revenue	233,031	280,748	72,949	36,113	622,842	642	-	623,484
Operating profit/(losses)	38,557	37,836	12,376	1,870	90,639	(33)	1,084	91,690
Segment income/(losses)
(i.e., Profit/losses	39,452	37,020	12,377	1,770	90,621	(33)	11,427	102,015
before income taxes)

(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.

3. Revenue

The Group conducts its global clothing retail operations through both physical stores and e-commerce channels. The following is a breakdown of total revenue by major regional market operation.

Three months ended 30 November 2018

			(Millions of yen)
		Revenue	Percent of Total
		(Millions of yen)	(%)
	Japan	246,140	38.2
	Greater China	134,848	20.9
	Other parts of Asia & Oceania	90,375	14.0
	North America & Europe	66,158	10.3
UNIQLO (Note 1)	537,523	83.4
GU (Note 2)	65,493	10.2
Global Brands (Note 3)	40,775	6.3
Others (Note 4)	674	0.1
Total	644,466	100.0

(Note 1) Revenue is classified by nation or region based on customer location. The designated countries and regions are classified as follows: Greater China: Mainland China, Hong Kong, Taiwan

Other parts of Asia & Oceania: South Korea, Singapore, Malaysia, Thailand, the Philippines, Indonesia, Australia

North America & Europe: United States of America, Canada, United Kingdom, France, Russia, Germany, Belgium, Spain, Sweden, the Netherlands

(Note 2) Main national and regional market: Japan

(Note 3) Main national and regional markets: North America, Europe, Japan

(Note 4) The "Others" category includes real estate leasing operations.

17

Three months ended 30 November 2019

			(Millions of yen)
		Revenue	Percent of Total
		(Millions of yen)	(%)
	Japan	233,031	37.4
	Greater China	142,671	22.9
	Other parts of Asia & Oceania	66,307	10.6
	North America & Europe	71,769	11.5
UNIQLO (Note 1)	513,780	82.4
GU (Note 2)	72,949	11.7
Global Brands (Note 3)	36,113	5.8
Others (Note 4)	642	0.1
Total	623,484	100.0

(Note 1) Revenue is classified by nation or region based on customer location. The designated countries and regions are classified as follows: Greater China: Mainland China, Hong Kong, Taiwan

Other parts of Asia & Oceania: South Korea, Singapore, Malaysia, Thailand, the Philippines, Indonesia, Australia, India

North America & Europe: United States of America, Canada, United Kingdom, France, Russia, Germany, Belgium, Spain, Sweden, the Netherlands, Denmark, Italy

(Note 2) Main national and regional market: Japan

(Note 3) Main national and regional markets: North America, Europe, Japan

(Note 4) The "Others" category includes real estate leasing operations.

4. Selling, general and administrative expenses

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

		(Millions of yen)
	Three months ended	Three months ended
	30 November 2018	30 November 2019
Selling, general and administrative expenses
Advertising and promotion	22,330	21,925
Rental expenses (Note)	52,659	20,302
Depreciation and amortization (Note)	11,982	43,067
Outsourcing	10,254	11,941
Salaries	75,270	75,038
Others	49,019	51,823
Total	221,515	224,098

(Note) The decrease of rental expenses and the increase of depreciation and amortization are due to the application of IFRS 16 Leasesas mentioned in "(6) Notes to the Interim Condensed Consolidated Financial Statements 1. Changes in accounting policies".

5. Other income and other expenses

The breakdown of other income and other expenses for each reporting period is as follows:

		(Millions of yen)
	Three months ended	Three months ended
	30 November 2018	30 November 2019
Other income
Foreign exchange gains (Note)	1,534	3,317
Others	417	766
Total	1,951	4,083

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			(Millions of yen)
	Three months ended		Three months ended
	30 November 2018		30 November 2019
Other expenses
Loss on retirement of property, plant and equipment		59	73
Impairment losses		-	836
Others		709	557
Total		769	1,467

(Note) Currency adjustments incurred in the course of operating transactions are included in "other income".

6. Finance income and finance costs

The breakdown of finance income and finance costs for each reporting period is as follows:

		(Millions of yen)
	Three months ended	Three months ended
	30 November 2018	30 November 2019
Finance income
Foreign exchange gains (Note)	5,030	9,297
Interest income	2,482	2,910
Others	48	11
Total	7,560	12,219
		(Millions of yen)
	Three months ended	Three months ended
	30 November 2018	30 November 2019
Finance costs
Interest expenses	1,139	1,894
Total	1,139	1,894

(Note) Currency adjustments incurred in the course of non-operating transactions are included in "finance income".

7. Earnings per share

Three months ended 30 November 2018		Three months ended 30 November 2019
Equity per share attributable to owners		9,180.49	Equity per share attributable to owners		9,685.06
of the Parent (Yen)		of the Parent (Yen)
Basic earnings per share (Yen)		720.16	Basic earnings per share (Yen)		694.73
Diluted earnings per share (Yen)		719.01	Diluted earnings per share (Yen)		693.59

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

	Three months ended	Three months ended
	30 November 2018	30 November 2019
Basic earnings per share for the period
Profit for the period attributable to owners of the Parent
(Millions of yen)	73,476	70,907
Profit not attributable to common shareholders (Millions of yen)	-	-
Profit attributable to common shareholders (Millions of yen)	73,476	70,907
Average number of common stock outstanding during the period
(Shares)	102,027,782	102,064,495
Diluted earnings per share for the period
Adjustment to profit (Millions of yen)	-	-
Increase in number of common stock (Shares)	163,218	167,866
(Number of share subscription rights included in the increase)	(163,218)	(167,866)

8. Subsequent events Not applicable.

19

3. 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, 9 January 2020, 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, 10 January 2020.

On behalf of the Board

FAST RETAILING CO., LTD.

Tadashi Yanai

Chairman, President and Chief Executive Officer

Japan, 9 January 2020

As at the date of this announcement, the Executive Director is Tadashi Yanai, the Non-executive Directors are Takeshi Okazaki, Kazumi Yanai and Koji Yanai, the Independent Non-executive Directors are Toru Hambayashi, Nobumichi Hattori, Masaaki Shintaku, Takashi Nawa and Naotake Ohno.

20