Top Management Message April 14, 2010

LAWSON today announced its operating results for fiscal 2009, ended February 28, 2010. A summary of our consolidated results is as follows:

  • Operating profit rose 2.2% year on year to 50.2 billion yen.
  • Recurring profit increased 1.3% to 49.4 billion yen.
  • Net profit decreased 47.2% to 12.5 billion yen.

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

Although we posted higher consolidated operating profit and recurring profit, net profit was substantially down year on year due to the booking of an extraordinary loss resulting from alleged misconduct by two former directors of LAWSON ENTERMEDIA, INC.

Today, we also announced share exchanges that will make LAWSON ENTERMEDIA, INC. and Ninety-nine Plus Inc. wholly owned LAWSON subsidiaries. Moving forward, we will try to capture more synergies throughout the LAWSON Group with the aim of raising earnings.

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

Fiscal 2009 Highlights

For the fiscal year ended February 28, 2010, LAWSON saw existing store sales on a non-consolidated basis fall 4.1% year on year due to the heavy impact of a prolonged slump in consumer sentiment and unseasonable weather. Another factor was that the beneficial contribution from the introduction in Japan of cigarette vending machines requiring taspo cards (adult identification IC cards) ran its course. On the other hand, the gross profit margin was 30.4%, up 0.3of a percentage point year on year thanks to the effects of structural improvements in distribution, raw materials procurement and other areas.

Furthermore, while actively supporting franchise owners, mainly in terms of merchandise assortments, we worked to cut unnecessary selling, general and administrative (SG&A) expenses, including running campaigns strictly in accordance with ROI standards. Although we managed to reduce SG&A expenses from the previous fiscal year as a result, non-consolidated operating profit was only 44.9 billion yen because of the decline in existing store sales.

Regarding subsidiaries and affiliates, Ninety-nine Plus Inc. recorded a strong performance in its perishable foods convenience stores, and LAWSON ATM Networks, Inc. saw an increase in the number of ATMs installed, contributing to earnings. Please note that due to a change in fiscal year-end, consolidated results for Ninety-nine Plus Inc. for fiscal 2009 represent a 14-month period.

As a result of the above factors, we recorded consolidated operating profit of 50.2 billion yen, approximately 1.0 billion yen higher year on year. This represented our seventh straight year of higher operating profit.

Fiscal 2010 Measures

The main measures we have planned for fiscal 2010 are as follows.

  • We will work to create merchandise assortments that cater closely to local customer needs. These efforts will be supported by PRiSM, the next-generation IT system we finished integrating at all stores in fiscal 2009 and sales data from Ponta, the multi-partner shopping points program we joined in March 2010.
  • We will continue to rigorously enforce our "Three Challenge Practices*" to further improve the earnings power of individual stores.
  • We will step up investment in growth fields in the LAWSON Group as a whole. Firstly, we will exercise restraint in opening regular LAWSON stores and accelerate the opening of LAWSON STORE100 fresh food convenience stores as we aim to expand our customer base by addressing changing customer needs. Moreover, we will lay the groundwork for opening stores in overseas countries and regions other than Shanghai.

Regarding shareholder returns, we hope to pay an annual dividend of 170 yen per share for fiscal 2010, 10 yen higher than the dividend applicable to fiscal 2009, by improving the efficiency of investments in stores as outlined above to generate earnings to support the higher dividends.

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

April 14, 2010

Takeshi Niinami
President & Chief Executive Officer

*The Three Challenge Practices are points that franchised store owners, employees and store crews (part-time and casual workers) must pay particular attention to in running LAWSON stores. They are (1) ensuring merchandise assortments are matched to individual locations, (2) serving customers courteously, and (3) keeping stores and surrounding areas clean.

Archives(Back Numbers)