Top Management Message January 7, 2010

LAWSON today announced its operating results for the third quarter of fiscal 2009, ending February 28, 2010. A summary of our consolidated results for the first nine months of fiscal 2009 is as follows:

  • Operating profit increased 1.6% year on year to 44.0 billion yen.
  • Recurring profit increased 0.8% to 43.4 billion yen.
  • Net profit declined 0.5% to 23.0 billion yen.

Please click here for more details of our results for the third quarter of fiscal 2009.

We achieved increases in consolidated operating profit and recurring profit. While our net profit result was lower year on year, we are forecasting an increase for the full year.

Non-Consolidated Performance

For the nine-month period ended November 30, 2009, LAWSON saw existing store sales on a non-consolidated basis fall 3.5% year on year due to the heavy impact of a prolonged slump in consumer sentiment. Another factor was that the beneficial contribution from the introduction in Japan of cigarette vending machines requiring taspo cards (adult identification IC cards) had run its course.

On the other hand, the gross profit margin was 30.4%, up 0.1 of a percentage point year on year thanks to the effects of structural improvements in distribution, raw materials procurement and other areas I explained at the end of the second quarter.

While actively supporting franchise owners, mainly in terms of merchandise assortments, we also worked to cut unnecessary selling, general and administrative (SG&A) expenses, in addition to running campaigns strictly in accordance with ROI standards.

Overall, non-consolidated operating profit was slightly lower than forecast, falling 1.6 billion yen year on year.

Consolidated Performance

Subsidiaries and affiliates performed strongly, with Ninety-nine Plus Inc., LAWSON ATM Networks, Inc., and LAWSON ENTERMEDIA, INC. in particular contributing to consolidated earnings.

Consequently, consolidated operating profit rose approximately 0.7 billion yen year on year.

In the remaining three months of the current fiscal year, our operating environment will more than likely remain difficult. In order to stay on top of this environment, we intend to utilize a next-generation IT system that should be fully in place by the end of the term along with loyalty cardholders' data* to create merchandise assortments that cater closely to local customer needs. Simultaneously, we will continue our efforts to improve the gross profit margin through structural reforms with the goal of raising gross profit at existing stores, which is a key theme for LAWSON. By also continuing to review unnecessary costs at headquarters, I believe we can achieve our initial full-year profit plan.

Going forward, we ask for the continued understanding and support of LAWSON's shareholders and other investors.

January 7, 2010

Takeshi Niinami
President & CEO

*From the spring of 2010, LAWSON will join Ponta, a multi-partner shopping points program run and managed by wholly owned Mitsubishi Corporation subsidiary Loyalty Marketing, Inc. Approximately 10.8 million MY LAWSON POINT or LAWSON PASS loyalty card holders (as of November 30, 2009) will be able to use the services of the Ponta program with their existing cards without having to change cards or complete any other procedures whatsoever.

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