Lawson, Inc. has worked hard throughout fiscal 2016 (March 1, 2016 through February 28, 2017) to realize a series of concrete initiatives that help drive forward our Corporate Philosophy; “Creating Happiness and Harmony in Our Communities”. As a result, the company successfully boosted full-year profit across the board, with consolidated operating profit increasing by 1.7% year on year to 73.7 billion yen, and consolidated net profit increasing by a healthy 16.0% year on year to 36.4 billion yen.

Following a year-on-year gain in the third quarter from September through November 2016, existing-store sales expanded by a further 0.6% year on year in the fourth quarter from December 2016 through February 2017. However, existing-store sales over the fiscal year declined by 0.2% year on year, largely due to weaker ticket sales in the first-half of fiscal 2016 compared to especially buoyant first-half in fiscal 2015, and to extremely competitive conditions in the convenience store industry as a whole. Despite the tough business environment, Lawson’s gross profit margin increased by 0.1point year on year to 31.4%. On store numbers, the Lawson Group opened 1,143 new stores in Japan and closed 427 in fiscal 2016, resulting in a net increase of 716 stores and a total number of 13,111 convenience stores at the end of February 2017.

Fiscal 2016 marked the first year of our “1000 Day Action Plan”. Over the year, we actively refurbished existing stores by installing new refrigerator and freezer cases and taller product shelving, and extensively expanded product ranges in an attempt to fully satisfy our customers’ everyday needs. As a result of this aggressive store refurbishment and additional advertising, non-consolidated operating profit held steady at 57.4 billion (+0.3% y/y). However, consolidated operating profit increased by 1.7%, or 1.2 billion yen, to 73.7 billion yen, thanks to strong profit contributions by Group subsidiaries such as SEIJO ISHII CO, LTD. Meanwhile, consolidated net profit increased by an even stronger 16.0%, or 5.0 billion yen, to 36.4 billion yen, generating a return on equity (ROE) of 13.5%.

■Key Business Strategies for Fiscal 2017

In fiscal 2017, the second year of our “1000 Day Action Plan,” we intend to build on the solid foundations put in place in fiscal 2016, so we can further progress and accelerate store development. We aim to boost daily sales per store and gross profit margin by expanding products on offer in the evening and at night to ensure customer needs are fully met at all times. We also intend to further strengthen the range of core items such as over-the-counter fast food items and boxed lunches, and maximize the potential of all LAWSON stores, not only existing stores but also newly opening stores. We will continue to invest strategically in our future by funding the installation of next generation systems designed to improve store productivity, pressing ahead with preparations to launch financial services, and boosting store numbers in Japan by tying up with other convenience store chains.

■Mid-term Management Vision

The Lawson Group’s mid-term management vision incorporates some clear targets to be achieved by fiscal 2021. The vision looks beyond the “1000 Day Action Plan”, which draws to a close at the end of fiscal 2018, to create targets for the subsequent three years from fiscal 2019 through 2021. The vision focuses firmly on creating and consolidating the Next-generation LAWSON Convenience Store model in order to achieve average daily convenience store sales of 600,000 yen per store, expand the Lawson Japan store network to 18,000 stores, and achieve consolidated operating profit of 100 billion yen, or higher.

We intend to continue to revolutionize the Lawson business framework in a variety of areas; 1) improve store productivity by implementing state-of-the-art systems that fully exploit latest technologies, 2) design and develop a more visible supply chain across all points from raw material purchasing through product manufacture and distribution, 3) develop new operations such as financial services and instore collection points for customer deliveries, 4) strengthen our store network through business cooperation with other chain stores, etc. and, 5) turn a profit and subsequently boost profitability at our international operations, by strengthening cooperation with Mitsubishi Corporation, a parent company. We will also work closely with each and every franchise store owner to help ensure their store is the best in their individual area, to achieve Lawson’s aim to become an essential part of our communities.

■Fiscal 2017 Profit and Dividend Estimates

We estimate consolidated operating profit will decline by 7.1% year on year to 68.5 billion in fiscal 2017. However, this profit decline stems from a strategic drive to revitalize and expand our business. While daily sales per store are forecast to improve as a result of our three-pronged drive for stronger products, stronger store displays and stronger operation of new openings, various leading investments will likely result in higher costs and lower profits in the near-term. We are determined to stay the course in this second year of the “1000 Day Action Plan” because these leading business investments represent a fundamental step on the road to attaining our fiscal 2021 consolidated operating profit target of 100 billion or higher, laid out in the mid-term management vision.

In terms of our dividend policy, we intend to maintain the scheduled full-year dividend for fiscal 2016 of 250 yen per share announced at the beginning of the fiscal period. Looking forward, Lawson is committed to rewarding shareholder loyalty by offering consistently steady returns, and plans to increase its fiscal 2017 dividend by 5 yen, to 255 yen per share.

We would ask all of our stakeholders for their continued support in our drive to create happiness and harmony in our communities.