Consolidated Financial Statements

(Millions of yen)

			February 28, 2026 Amount	August 31, 2026 Amount
ASSETS
Current assets			1,492,546	1,672,003
	Cash and bank deposits		438,634	440,203
	Notes and accounts receivable - trade, and contract assets		298,684	342,336
	Trade accounts receivable - financial services		42,214	47,162
	Merchandise and finished goods		223,018	264,231
	Work in process		94	52
	Raw materials and supplies		286	345
	Prepaid expenses		89,344	98,079
	Other		407,277	487,373
	Allowance for doubtful accounts		(7,008)	(7,781)
Non-current assets			7,650,015	7,796,079
	Property and equipment		4,497,967	4,641,012
		Buildings and structures, net	1,449,775	1,471,679
		Furniture, fixtures and equipment, net	435,334	481,600
		Land	902,246	929,479
		Right-of-use assets, net	1,451,665	1,519,730
		Construction in progress	231,458	205,503
		Other, net	27,487	33,018
	Intangible assets		2,469,026	2,476,233
		Goodwill	2,109,806	2,118,732
		Software	201,682	205,742
		Other	157,537	151,759
	Investments and other assets		683,021	678,833
		Investments in securities	363,740	365,043
		Long-term loans receivable	7,056	7,638
		Long-term leasehold deposits	157,112	154,163
		Net defined benefit asset	67,194	68,430
		Deferred tax assets	37,148	32,288
		Other	52,406	52,891
		Allowance for doubtful accounts	(1,637)	(1,623)
Deferred assets			395	330
	Bond issuance cost		395	330
TOTAL ASSETS			9,142,957	9,468,412

(Millions of yen)

		February 28, 2026 Amount	August 31, 2026 Amount
LIABILITIES
Current liabilities		1,900,670	1,929,883
	Notes and accounts payable, trade	416,083	498,881
	Short-term loans	135,580	58,329
	Current portion of bonds	255,657	60,000
	Current portion of long-term loans	190,456	408,214
	Income taxes payable	37,440	19,423
	Accrued expenses	258,979	281,023
	Contract liabilities	70,667	70,479
	Deposits received	177,934	174,688
	Lease obligations	164,772	171,999
	Allowance for loss on business of subsidiaries and associates	3,299	－
	Allowance for sales promotion expenses	335	439
	Allowance for bonuses to employees	5,388	5,690
	Allowance for bonuses to Directors and Audit & Supervisory Board Members	718	375
	Other	183,357	180,337
Non-current liabilities		3,594,091	3,803,443
	Bonds	929,828	957,334
	Long-term loans	718,495	785,446
	Deferred tax liabilities	224,633	263,908
	Allowance for retirement benefits to Directors and Audit & Supervisory Board Members	134	123
	Allowance for stock payments	1,504	1,561
	Net defined benefit liability	16,566	14,276
	Deposits received from tenants and franchised stores	13,796	14,175
	Lease obligations	1,398,990	1,471,759
	Asset retirement obligations	225,304	232,490
	Other	64,836	62,368
TOTAL LIABILITIES		5,494,762	5,733,326
NET ASSETS
Shareholders' equity		2,634,255	2,601,001
	Common stock	50,000	50,000
	Capital surplus	293,429	－
	Retained earnings	2,906,276	2,661,081
	Treasury stock, at cost	(615,450)	(110,080)
Total accumulated other comprehensive income		985,971	1,105,369
	Unrealized gains (losses) on available-for-sale securities, net of taxes	55,662	56,494
	Unrealized gains (losses) on hedging derivatives, net of taxes	4,622	4,607
	Foreign currency translation adjustments	884,784	1,003,749
	Remeasurements of defined benefit plans	40,900	40,518
Share award rights		225	521
Non-controlling interests		27,743	28,194
TOTAL NET ASSETS		3,648,195	3,735,086
TOTAL LIABILITIES AND NET ASSETS		9,142,957	9,468,412

(Millions of yen)

		Six Months Ended August 31, 2025 Amount	Six Months Ended August 31, 2026 Amount
Revenues from operations		5,616,637	5,460,274
	Net sales	4,788,994	4,725,720
	Cost of sales	3,909,215	3,965,052
Gross profit on sales		879,779	760,667
	Operating revenues	827,642	734,553
Gross profit from operations		1,707,422	1,495,221
	Selling, general and administrative expenses	1,499,034	1,262,941
Operating income		208,388	232,280
Non-operating income		10,952	15,169
	Interest income	5,687	5,533
	Equity in earnings of affiliates	－	6,309
	Other	5,265	3,326
Non-operating expenses		32,903	25,525
	Interest expenses	16,400	14,136
	Interest on bonds	9,811	9,260
	Equity in losses of affiliates	1,039	－
	Other	5,653	2,129
Ordinary income		186,436	221,923

(Millions of yen)

		Six Months Ended August 31, 2025 Amount	Six Months Ended August 31, 2026 Amount
Special gains		48,329	6,350
	Gain on sales of property and equipment	39,363	2,689
	Reversal of provision for loss on business of subsidiaries and associates	2,135	2,546
	Other	6,830	1,114
Special losses		31,200	54,132
	Loss on disposals of property and equipment	6,758	9,208
	Impairment loss	8,041	22,985
	Restructuring expenses	873	－
	Other	15,527	21,939
Income before income taxes		203,566	174,141
Total Income taxes		76,009	48,972
	Income taxes - current	67,651	38,836
	Income taxes - deferred	8,357	10,136
Net income		127,556	125,168
Net income attributable to non-controlling interests		5,754	723
Net income attributable to owners of parent		121,802	124,444

(Millions of yen)

		Six Months Ended August 31, 2025 Amount	Six Months Ended August 31, 2026 Amount
Net income		127,556	125,168
Other comprehensive income
	Unrealized gains (losses) on available-for-sale securities, net of taxes	11,953	492
	Unrealized gains (losses) on hedging derivatives, net of taxes	(592)	(15)
	Foreign currency translation adjustments	(260,547)	118,909
	Remeasurements of defined benefit plans, net of taxes	(2,115)	388
	Share of other comprehensive income (loss) of entities accounted for using equity method, net of taxes	(26)	(174)
Total other comprehensive income (loss)		(251,328)	119,601
Comprehensive income (loss)		(123,772)	244,769
	Comprehensive income (loss) attributable to owners of parent	(122,617)	243,842
	Comprehensive income (loss) attributable to non-controlling interests	(1,154)	927

(Millions of yen)

		Six Months Ended August 31, 2025 Amount	Six Months Ended August 31, 2026 Amount
Cash flows from operating activities
	Income before income taxes	203,566	174,141
	Depreciation and amortization	207,854	186,160
	Impairment loss	8,041	22,985
	Amortization of goodwill	69,207	72,168
	Interest income	(5,687)	(5,533)
	Interest expenses and interest on bonds	26,211	23,396
	Equity in losses (earnings) of affiliates	1,039	(6,309)
	Gain on sales of property and equipment	(39,363)	(2,689)
	Loss on disposals of property and equipment	7,355	9,208
	Reversal of provision for loss on business of subsidiaries and associates	(2,135)	(2,546)
	Decrease (increase) in notes and accounts receivable, trade	(26,726)	(36,622)
	Decrease (increase) in trade accounts receivable, financial services	(8,340)	(4,947)
	Decrease (increase) in inventories	1,948	(32,128)
	Increase (decrease) in notes and accounts payable, trade	74,075	75,510
	Increase (decrease) in deposits received	85,007	(3,284)
	Net increase (decrease) in borrowings in banking business	10,000	－
	Net increase (decrease) in deposits received in banking business	28,797	－
	Net increase (decrease) in call money in banking business	(100,000)	－
	Net decrease (increase) in ATM-related temporary accounts	(41,969)	－
	Other	(36,075)	(41,701)
	Subtotal	462,805	427,806
	Interest and dividends received	6,494	8,980
	Interest paid	(27,956)	(21,486)
	Proceeds from insurance income	2,785	78
	Income taxes paid	(64,007)	(78,891)
	Income taxes refund	1,982	597
	Net cash provided by operating activities	382,104	337,084

(Millions of yen)

		Six Months Ended August 31, 2025 Amount	Six Months Ended August 31, 2026 Amount
Cash flows from investing activities
	Acquisition of property and equipment	(160,346)	(158,300)
	Proceeds from sales of property and equipment	66,349	6,894
	Acquisition of intangible assets	(42,726)	(28,966)
	Payment for purchase of investments in securities	(44,891)	(3,989)
	Proceeds from sales of investments in securities	51,909	3,716
	Proceeds from sales of shares in subsidiaries resulting in change in scope of consolidation	－	13,184
	Payment for sales of shares in subsidiaries resulting in change in scope of consolidation	(758,627)	－
	Payment for long-term leasehold deposits	(3,246)	(1,464)
	Refund of long-term leasehold deposits	16,136	4,552
	Proceeds from deposits from tenants	959	500
	Refund of deposits from tenants	(1,011)	(235)
	Payment for acquisition of business	(173)	(70)
	Payment for time deposits	(3,983)	(3,913)
	Proceeds from withdrawal of time deposits	5,476	4,636
	Other	(9,189)	(4,837)
	Net cash used in investing activities	(883,364)	(168,293)
Cash flows from financing activities
	Net increase (decrease) in short-term loans	417,227	(78,115)
	Proceeds from long-term debts	18,000	335,651
	Repayment of long-term debts	(190,815)	(69,040)
	Proceeds from issuance of commercial papers	－	79,184
	Redemption of commercial papers	－	(79,184)
	Redemption of bonds	(30,000)	(197,862)
	Proceeds from sale of treasury stock	1,132	300,087
	Purchase of treasury stock	(283,306)	(400,001)
	Dividends paid	(51,950)	(57,827)
	Dividends paid to non-controlling interests	(4,259)	(476)
	Payment for changes in ownership interests in subsidiaries that do not result in change in scope of consolidation	(0)	－
	Other	(8,953)	(8,464)
	Net cash used in financing activities	(132,925)	(176,049)
Effect of exchange rate changes on cash and cash equivalents		(21,358)	8,296
Net increase (decrease) in cash and cash equivalents		(655,544)	1,037
Cash and cash equivalents at beginning of period		1,349,820	426,146
Cash and cash equivalents at end of period		694,276	427,184

Semi-annual Consolidated Financial Statements

(1)Semi-annual consolidated balance sheets

(2) Semi-annual consolidated statements of income and semi-annual consolidated statements of comprehensive income

Semi-annual consolidated statements of income

Semi-annual consolidated statements of comprehensive income

(3) Semi-annual consolidated statements of cash flows