Top Management Message July 5, 2017

Today Lawson announced its financial results for the first quarter of fiscal 2017, or the three months to May 31, 2017. The main consolidated results are listed below:

• Operating profit 16.2 billion yen
(-6.9% year on year)
• Recurring profit 15.9 billion yen
(-4.2% year on year)
• Net profit 9.5 billion yen
(+8.8% year on year)

Click here for more detailed figures

Over the three months from March through May 2017, Lawson, Inc. pursued business activities that gave concrete shape to our corporate philosophy; “Creating Happiness and Harmony in Our Communities”.

Fiscal 2017 marks the second year of our “1000 Day Action Plan” project, during which we intend to build on the solid foundations established in the previous year to further progress and accelerate transformation of our business model. Already over the first quarter, Lawson has managed to stimulate further growth in existing-store sales of 1.5% year on year, and maintain gross profit margin at the previous year’s level of 31.3%. In terms of store numbers, the Lawson Group opened 158 stores and closed 79 stores in the first quarter, resulting in a net increase of 79 stores and a total number of 13,190 convenience stores at the end of May 2017.

Consolidated operating profit declined by 6.9%, or 1.1 billion yen, year on year to 16.2 billion yen in the first quarter. However, it is important to note that this was due largely to strategic costs stemming from our decision to increase support for franchise stores by, for example, shouldering a portion of franchisee disposal losses, and from higher personnel expenses relating to the building of a stronger framework for our franchise HQ. An increase in pro-forma standard taxes also contributed to the decline in first quarter operating profit.

Meanwhile, consolidated net profit expanded by 8.8% year on year to 9.5 billion yen on lower casualty and foreign-exchange losses, and the reporting of special gains.

Key Actions Taken in the First Quarter of Fiscal 2017

・We expanded the Lawson Select product range and offered new salads to enrich our delicatessen category in order to ensure we can fully satisfy customer needs not only during the day, but also during the dinner time. We also made further efforts to strengthen product appeal by offering a fuller lineup of boxed meals, including the new gyoza fried dumpling boxed meal.

・In the over-the-counter fast food category, our “Deka-Yakitori (Mega grilled chicken)”, containing 20% extra yakitori chicken, continued to sell well. Our “Deka-Kushikatsu (Mega fried skewered pork)” has proved popular with many customers since it was launched in March. As for desserts, we introduced a new line of Uchi Cafe SWEETS in April, with desserts such as the premium chocolate eclair appealing strongly to customers.

・Aiming to contribute to health and wellness in our communities, Lawson has been concentrating on selling more health-conscious products. In addition to the popular NATURAL LAWSON Green Smoothie, we have started to sell a new low-calorie, low-carbohydrate product called the Green Smoothie Off&Plus. These efforts have helped successfully expand our appeal among health-focused customers.

In the second quarter from June to August 2017, we have been pressing ahead with our “1000 Day Action Plan” to help position Lawson as an essential part of our communities. We make further efforts to strengthen support offered to franchise stores, and strengthen the appeal of our products, our store displays and our operations of new openings. We are making some determined leading investments to expand and strengthen Lawson Group business, including investment in next-generation systems to improve store productivity, preparing our entry into financial services, and expanding our Japanese store network through business alliances with other chain-store operators. We are also seeking to achieve our full-year operating profit target of 68.5 billion yen.

We very much appreciate the continued trust and support of our stakeholders in these endeavors to build a strong and sustainable future for our business.

July 5, 2017

Sadanobu Takemasu
President and CEO
Representative Director
Chairman of the Board

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