Top Management Message: FY2017 first half corporate results

On October 11, 2017, Lawson announced its financial results for the first half of fiscal 2017, or the six months from March through August 2017. The main consolidated results are listed below.

• Operating profit 38.9 billion yen
(-2.5% year on year)
• Recurring profit 38.4 billion yen
(+0.2% year on year)
• Net profit 23.6 billion yen
(+4.6% year on year)

Click here for more detailed figures

Over the six months from March through August 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 half of the financial year, Lawson has managed to stimulate further growth in existing-store sales of 1.0% 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 493 stores and closed 154 stores in the first half, resulting in a net increase of 339 stores and a total number of 13,450 convenience stores at the end of August 2017.

On the profit front, consolidated operating profit declined by 2.5%, or 0.9 billion yen, year on year to 38.9 billion yen in the first half after: we extended greater support to franchise stores by, for example, shouldering a portion of franchisee disposal losses; we pursued more active new business initiatives designed to secure medium- to long-term growth such as our preparations to participate in the financial services, and; we witnessed an increase in pro-forma standard taxes.

By contrast, consolidated recurring profit expanded by 0.2% year on year to 38.4 billion yen in the first half after lower year-on-year casualty loss figures reduced non-operating expenditure. Finally, consolidated net profit also expanded by 4.6%, or 1.0 billion yen, year on year to 23.6 billion yen with fewer store closures helping reduce losses on retirement of fixed assets under the extraordinary expense category.

Key Actions Taken in the First Half of Fiscal 2017

  • ・In the dessert category, many customers loved the new range of “Uchi Café SWEETSxGODIVA chocolat roll cake” launched in June followed by the “Uchi Caré SWEETSxGODIVA chocolat pudding” in July, both products made with superior ingredients through our collaboration with GODIVA.
  • ・In the over-the-counter fast food category, our “Deka-Yakitori” (mega grilled chicken) continued to sell well. Our decision to increase the size of our “L-Chiki” (fried chicken) by approximately 40% to 110g in June also delighted customers and boosted sales.
  • ・Five new products in our bran* bread series also proved extremely popular with health-conscious customers. Those new items included “a new loaf of bran bread” and “bean paste bran buns”.
    *Bran: The hull of wheat and rice, rich in fiber and nutrients such as iron, calcium, magnesium, zinc and copper. It is also known for its low sugar content.

In the second half of fiscal 2017 from September 2017 through February 2018, we have been pressing ahead with our “1000 Day Action Plan” to help position Lawson as an essential part of our communities. We are making further efforts to strengthen support offered to franchise stores, and strengthen the appeal of our products, our store displays and our operation of new store openings. We have already declared our Mid-term Management Vision to achieve daily sales per store of 600,000 yen and operating profit in excess of 100 billion yen by fiscal 2021. To help achieve those aims, in fiscal 2017 we have been 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 still working towards achieving our full-year consolidated operating profit target, which remains unchanged at 68.5 billion yen.

I very much appreciate the continued support and understanding of our stakeholders regarding our management strategy which is designed to build a strong and sustainable future for our business.

October 11, 2017

Sadanobu Takemasu
President and CEO
Representative Director
Chairman of the Board

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