Top Management Message

Today, Lawson announced its financial results for the first quarter of FY2018, or the three months from March to May 2018. The main consolidated results are listed below

• Operating profit 12.6 billion yen
(-22.0% year on year)
• Recurring profit 12.0 billion yen
(-24.5% year on year)
• Net profit 6.1 billion yen
(-35.7% year on year)

Click here for more detailed figures

During the three months from March to May 2018, Lawson, Inc. has pursued business activities that give concrete shape to our corporate philosophy; “Creating Happiness and Harmony in Our Communities”.
FY2018 marks the third and final year of our “1000-Day Action Plan” project, so we spent the first quarter continuing to formulate a Lawson’s next-generation convenience-store model to ensure sustainable growth, and reform our supply chain management to offer stronger support for everyday living, especially evening and nighttime convenience-store demand.

In the first quarter, Lawson opened 293 stores and closed 71 stores resulting in a net increase of 222 stores and a total number of 14,214 convenience stores in Japan at the end of May 2018. Thanks to a contribution from the Seijo Ishii’s sales increase as well, consolidated chain-store sales totaled 591.0 billion yen (+6.7% year on year) and consolidated operating revenue increased to 170.5 billion yen (+7.1%) in the first quarter. Furthermore, as our expansion in the overseas markets, we continued to open new stores primarily in Shanghai, and increased LAWSON’s international network to 1,757 stores at the end of May 2018.

However, existing-store sales declined 2.6% in the first quarter on increasingly severe competition from inside and outside the convenience-store industry, and a reduction in ticket sales compared to last year’s large-scale shows. Existing-store sales minus ticket and gift-card sales also dipped by a slight 0.6% compared to the previous year. On the profit front, we increased investment in the Lawson’s next-generation convenience-store model to ensure sustainable growth, and shouldered a greater portion of franchisee disposal losses to help strengthen evening and nighttime food ranges. These two factors weighed heavily on first-quarter consolidated operating profit, which declined 22% year on year to 12.6 billion yen.

Key Actions Taken in the First Quarter of Fiscal 2018

・Rice category: We started selling the “Chukadon chop-suey rice: a half your recommended daily vegetable intake” as part of our More Vegetables! series. More Vegetables! sales are increasing favorably because the series is popular with health-conscious customers who want to consume more vegetables quickly and easily. We have also been paying more attention to high-quality manufacturing processes and ingredients for our “Onigiriya” rice balls, which were renewed in April and are now performing strongly.

・Dessert category: The sixth chocolate sweets product developed in conjunction with GODIVA proved a strong success in April. June 2018 marked the one-year anniversary since the start of the joint GODIVA product series, designed to “enable customers to experience one-off special products in their local Lawson store.” The “once only, once ever” joint products are extremely popular with female customers in particular, and have become a hit series since total sales topped 10 million units at the end of May 2018.

・To show our strong support for working men and women, in March, we launched Lawson Fresh Pick in around 200 Lawson stores mainly in metropolitan area. This service enables customers to order fresh produce and meal kits via smart phone in the morning and pick up their order from a Lawson store in the evening. The service has proved gradually popular, so we are currently considering expanding the coverage area.

・Lawson has been introducing new POS cash registers with automatic change dispensers to improve in-store cash management. By the end of May 2018, we had installed the new registers into around 1,000 stores. From the second quarter, we have been pursuing a broader and more earnest switchover, so we can complete the installation network-wide by the end of the fiscal year. This move, along with the last year’s introduction of tablet-style terminals, is designed to boost store efficiency and improve productivity in times of increasingly tight labor resources.

In the second quarter, we are continuing to strengthen support offered to franchise stores, and strengthen the appeal of our products, our store displays and our operation of new store openings to ensure we remain an essential part of our communities. As part of this drive, we have been cooperating with multiple suppliers to change order deadline and delivery times from June this year. This will enable us to reduce the lead time between ordering and product delivery, and successfully maximize in-store product volumes at 4pm to help ready our stores to better service evening and nighttime customer demand.

We have determined that the fiscal year through February 2019 will be a period for investing in our future, and consolidated operating profit is expected to decline as a result. However, we are committed to actively pursuing positive measures to establish a solid operational base that can support future sustainable growth. These measures include embracing digital challenges such as building next-generation systems to improve productivity, and launching Lawson smartphone payments, as well as preparing for entering the financial services industry. I hope we can count on all of our stakeholders to support us in this carefully planned effort to build a strong and sustainable future for our business.

July 11, 2018

Sadanobu Takemasu
President and CEO
Representative Director
Chairman of the Board

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