Flash Report on the Consolidated Result
for the First Quarter Ended February 28, 2014
July 5, 2013
Listed Company Name: Lawson, Inc.
Code No.: 2651
(URL http://www.lawson.co.jp/company/ir/index.html)
Company Representative: Takeshi Niinami, Representative Director, CEOContact:Tomoki Takanishi , Financial & Accounting Office General Manager
Scheduled date for submission of quarterly earnings report: July 16, 2013
Scheduled date for payment of dividend: Supplementary Documents quarterly results: Yes
Presentation of quarterly results: No

Tel.: (03) 5435-2773

1. Consolidated Performance for the current first quarter of the current period (from March 1, 2013, to May 31, 2013)(1) Consolidated operating results
Note: Amounts below one million yen are truncated.
Gross operating revenue
Operating income
Ordinary income¥ Million%¥ Million%¥ Million%
Current 1st Quarter
119,498(1.6)
14,3022.5
14,4184.8Previous 1st Quarter
121,434
8.4
13,9508.4
13,763
7.1
Net income¥ Million
7,194
6,267

Current 1st Quarter
Previous 1st Quarter

Net income per share
¥
72.02
62.74

%
14.8
-

Notes: Comprehensive income May, 2013 8,399 million( 38.9 %)Fully diluted income per share
¥
71.89
62.64

May, 2012 6,046 million( - %)(2) Consolidated financial position
Total assets¥ Million
At May 31,2013
597,766
Last fiscal year
579,809
Notes: Shareholders’ equity May, 2013 224,900 million

Net assets
Shareholders’ equity ratio¥ Million%
230,02737.6
230,18139.1
February, 2013 226,475 million

2. Dividends status
Annual dividends per share2012 fiscal year¥―

Year-end
dividend¥
100.00¥200.00―105.00210.00

1Q

2Q

3Q

¥
―
―

¥
100.002013 fiscal year
2013 fiscal year
105.00(Forecast)
Notes: Revision of forecast for dividends in the first half: No

1

Total

3. Forecast Consolidated Performance for 2013 fiscal year （from March 1, 2013, to February 28, 2014）
Operating income
Ordinary income
Net income
Gross operating revenue¥ Million%¥ Million%¥ Million%¥ Million%
2013 first half
257,000
3.2
35,5002.7
34,6001.0
17,300(3.1)
2013 fiscal year
516,000
5.9
70,0005.7
68,4003.8
35,9008.2
Reference: Forecast net profit per share for the 2013 first half: 173.18yen
Forecast net profit per share for the 2013 fiscal year: 359.38yen
Note: Revision of forecasts for consolidated performance during the first half: No
4. Other(1) Change in important subsidiaries during the period (Changes in certain specified subsidiaries resulting in revised
scope of consolidation): None

(2) Adoptions of special accounting methods in presentation of quarterly financial statements: No(3) Changes in accounting policies, changes in accounting estimation, retrospective restatement
1. Changes of accounting policies associated with revision in accounting standards: Yes
2. Other changes: None
3. Changes in accounting estimation: Yes
4. Retrospective restatement: None
(4) Number of issued shares:i) The number of the stocks issued in the end of term
May, 2013: 100,300,000 February, 2013: 100,300,000ii) The number of treasury shares in the end of term
May, 2013: 405,731
February, 2013: 406,853
iii) Average number of shares during the term
May, 2013: 99,894,032
May, 2012: 99,883,984
Note: Disclosure of progress of quarterly review procedures
At the time of disclosure of this quarterly flash report, review procedures for quarterly earnings reports based on the
Financial Instruments and Exchange Act were being performed.
Note: Terms of use for financial forecasts, and other special notes
Forward-looking statements presented in this material such as financial forecasts are based on currently available
information and certain presumptions deemed to be reasonable as of the date of announcement. They are not intended
to guarantee the Company’s achievement. Actual results may differ significantly from these forecasts due to manyfactors. For preconditions of these financial forecasts and notes concerning their use, please refer to “1. Review ofOperations, (3) Qualitative Information Regarding Consolidated Financial Forecasts” on page 7 of the appendix.

2

1．
．Review of Operations(1) Review of Operating Results
During the first quarter of fiscal 2013, the period from March 1 to May 31, 2013, the Lawson Group(hereinafter, the “Group”) implemented measures to reinforce its Home Convenience that provides
essential items and services at the local level with the aim of realizing the Group’s corporate philosophyof “Creating Happiness and Harmony in our Communities.” Based on its analysis of purchase data
retrieved from the multi-partner loyalty program, Ponta, the Group focused on customer relationshipmanagement (CRM)*1 and supply chain management (SCM)*2 in order to offer a merchandise assortmentthat meets the specific needs of customers in each neighborhood.
*1

CRM

A marketing management method for providing merchandise and services that meet the specific needs of customers.
*2

SCM

A business administration method for comprehensively managing all stages of business, from procurement to sales,
to streamline and optimize the entire business process.

As a result, for the first quarter of fiscal 2013 on a consolidated basis, gross operating revenue decreasedby 1.6% from the corresponding period of the previous fiscal year to ¥119,498 million. Operating income
increased by 2.5% year on year, to ¥14,302 million, and ordinary income in grew by 4.8% year on year, to¥14,418 million. Net income rose ¥927 million, up 14.8% year on year, to ¥ 7,194 million.

Operating results by business segment are as follows.

(Convenience Store Operations)
The status of merchandise and services, store operations, store development and other aspects ofConvenience Store Operations and Overseas Businesses for the first quarter of fiscal 2013 is outlined asfollows.

[Merchandise and Service Strategies]
On the merchandising front, we continued to strengthen our evening and nighttime merchandise
assortment by expanding our lineup of ready-made meals, including carbohydrate-based foods and fast
foods, in order to enhance satisfaction of customers visiting our stores in and after evening hours.
In an effort to expand our customer base, we continued implementing last year’s initiative to reinforce ourmerchandise assortment of pre-cut vegetables and other fresh foods as well as processed foods that areoften purchased in combination with fresh foods.
In addition, with a view to addressing the aging society and consumers’ heightened concerns over theirhealth, we launched our Healthy Convenience Store Declaration on May 31, 2013. By highlighting
health-consciousness in our products, in-store presentation, and sales campaigns, we will strive to3

eliminate consumers’ preconceived notion that convenience stores offer unhealthy food, establishing a
corporate identity synonymous with good health.
In our mainstay rice category, our Furusato-no-umai! line offering lunch boxes and rice balls wastremendously popular for its high-value-added products using ingredients made in Japan.
In our over-the-counter fast foods category, the number of stores equipped with MACHI café offering
freshly-brewed coffee reached 3,542 as of May 31, 2013. The number of stores with an in-store kitchen
facility named Machikado Chubo stood at 889 as of May 31, 2013. Stores with Machikado Chubo are
consistently popular with customers. We will continue to introduce this in-store kitchen at more of ourstores.
In the delicatessen category, our efforts to develop products aimed at expanding our customer baseresulted in favorable demand for such products as ready-made dishes and salads.

[Breakdown of sales at chain stores by merchandise category]
Fiscal period

Previous 1st Quarter

Current 1st Quarter

March 1, 2012 to May 31, 2012

March 1, 2013 to May 31, 2013

Sales

Percentage

Sales

Percentage(Millions of yen)of Total (%)(Millions of yen)of Total (%)

Processed foods

263,772

56.4

268,108

56.2

Fast foods

87,852

18.8

95,28820.0

Daily delivered foods

68,498

14.6

67,196

14.1

Nonfood products

47,818

10.2

46,5809.7

467,941100.0

477,174

100.0

Product groupTotal

In sales promotions, the Group implemented programs with the aim of achieving a high return on
investment (ROI). We proactively implemented a point-rewarding campaign targeting Ponta members tomotivate purchase with the aim of increasing the rate of repeat visits.
Total Ponta members reached 54 million as of May 31, 2013, including members that joined through otherparticipating companies.
The sales ratio of Ponta members reached approximately 46%.

[Store Operations]
In March 2013, we started formulating an analysis report by using Ponta members’ data and distributing it
to our stores. The report enables each store to analyze the purchase behavior of customers living in theirneighborhood, including time and purpose of store visits and purchased items. In addition, we have also
streamlined our order placement procedures. By promoting these measures, we will step up our efforts todevelop stores that offer customers whatever they want, whenever, and wherever.
4

[Store Development and Store Format Strategy]
In opening new stores, the Group has focused on maximizing return on investment (ROI) and has strictly
adhered to its proprietary standards for opening stores, in addition to prioritizing profitability.
[Change in the Total Number of Stores]
Total stores as of

Change during

Total stores as ofFebruary 28, 2013

fiscal year

May 31, 2013

LAWSON

9,642

134

9,776

NATURAL LAWSON

110

(2)

108

LAWSON STORE100

1,224

(13)

1,211

Total

10,976

119

11,095[Distribution of Stores in Japan by Region (As of May 31, 2013)]
NumberPrefecture

NumberPrefectureof stores

NumberPrefectureof stores

NumberPrefectureof stores

NumberPrefectureof storesof stores

Hokkaido

582

Saitama

466

Mie

106

Okayama

135

Saga

63

Aomori

190

Chiba

443

Ishikawa

100

Hiroshima

158

Nagasaki

93

Akita

169

Ibaraki126

Toyama187

Yamaguchi

115

Oita

150

Iwate

157

Tokyo

1,559

Fukui

104

Tottori

102

Kumamoto

106

Miyagi

206

Kanagawa

815

Kyoto

266

Shimane105

Miyazaki91

Yamagata

66

Shizuoka

204

Shiga

135

Kagawa107

Kagoshima

119

Fukushima

91

Yamanashi

95

Nara

100

Ehime

173

Total

Niigata116

Nagano143

Wakayama

116

Tokushima

111

Tochigi

129

Aichi

520

Osaka

1,003

Kochi

64

Gunma

80

Gifu

134

Hyogo

597

Fukuoka398

The number of LAWSON STORE 100 fresh foods convenience stores reached 1,211 as of May 31, 2013.
Conversion of company-operated stores into franchised stores is steadily progressing. In addition, thenumber of fresh food-type LAWSON stores, which are enhanced conventional LAWSON stores with astronger assortment of perishable foods and daily delivered foods, totaled 5,615 as of May 31, 2013.
With the aim of steadily supplying high-quality products, we are operating nine Lawson Farms in Japan,
which are partially funded by the Group, and are selling fresh vegetables produced at these farms
primarily at fresh food-type convenience stores.
The number of LAWSON chain stores operated by Lawson Okinawa, Inc. in Okinawa Prefecture reached
154 as of May 31, 2013.

5

11,095

[Overseas Operations]
In Thailand, in November 2012, we established Saha Lawson Co., Ltd., a joint venture between the
Company’s consolidated Asian subsidiary Lawson Asia Pacific Holdings Pte. Ltd. and the SAHA Group,
Thailand’s leading distributor of consumer goods. In March 2013, the joint venture simultaneously
opened three LAWSON108 stores in Bangkok, Thailand by renewing the SAHA Group’s 108SHOP
stores, marking LAWSON’s first step into the Indochina Peninsula market.
[Distribution of LAWSON Brand Stores Overseas by Region (As of May 31, 2013)]
CompanyCountry/region

Number of stores(As of February
28, 2013)
305

Changeduring fiscal
year
(2)

Number of stores(As of May
31, 2013)
303

Shanghai Hualian Lawson, Inc.

Shanghai, China

Chongqing Lawson, Inc.

Chongqing, China

49

5

54

Dalian Lawson, Inc.

Dalian, China

8

3

11

Saha Lawson Co., Ltd.

Bangkok Thailand

-

7

7

PT MIDI UTAMA INDONESIA Tbk

Indonesia

83

1

84

Lawson USA Hawaii, Inc.

Hawaii, U.S.A.

2

-

2

447

14

461

Total

(Other Businesses)
In addition to Convenience business and Overseas business, the Group is involved in the Entertainment &Home Convenience business , and other businesses.
On March 21, 2013, the Company formed a business alliance with DAICHI WO MAMORU KAI. CO.,LTD. for the purpose of expanding its offering of vegetables and fresh foods. As the first step under thepartnership, our joint venture Smart Kitchen, Inc. started offering the partner’s safe and secure fruit andvegetable produce. In addition, in May 2013, the Company subscribed to new shares in DAICHI WO
MAMORU KAI. CO., LTD. through third-party allotment, acquiring a 33.4 % equity.
Lawson HMV Entertainment, Inc., the Company's subsidiary that operates Entertainment & Home
Convenience business posted a solid performance led by an increase in ticket sales of concerts, events andleisure activities.
Lawson ATM Networks, Inc., which operates a financial-services-related business, started providing
financial services for the Bank of Nagoya in March 2013. A solid financial performance was displayed by
Lawson ATM Networks, with the total number of its financial institution partners reaching 59 nationwide
including online banks and the number of ATMs installed nationwide totaling 9,795 (up 519 year on year)
as of May 31, 2013.
(2) Qualitative Information Regarding Changes in Consolidated Financial Indicators
As of May 31, 2013, total current assets stood at ¥196,785 million yen, climbing ¥16,489 million from6February 28, 2013, the end of the previous fiscal year. This reflected an increase of ¥6,548 million in cash
and deposits due mainly to a growth in total transaction value of bill settlement services and a rise of¥3,001 million in accounts receivable-other because of an increase in transaction volume at subsidiarycompanies. Non - current assets grew ¥1,467 million from February 28, 2013 to ¥400,980 million, mainly
owing to an increase of ¥3,797 million in property and store equipment resulting from opening of newstores. Consequently, total assets climbed ¥17,956 million from the end of the previous fiscal year to¥597,766 million.
As of May 31, 2013, total current liabilities increased ¥17,183 million from the end of the previous fiscal
year to ¥256,977 million, mainly reflecting an increase of ¥12,775 million in deposits received owing tosuch factors as a rise in the total transaction value of bill settlement services. Non - current liabilities stoodat ¥110,761 million, growing ¥927 million from February 28, 2013, mainly owing to lease obligations
growing ¥1,182 million due to opening of new stores. Consequently, total liabilities increased ¥18,110
million from the end of the previous fiscal year to ¥367,738 million.
Total net assets stood at ¥230,027 million, declining ¥154 million from February 28, 2013. This was
mainly due to a decrease resulting from payment of ¥9,989 million in dividends, despite an increase
resulting from a quarterly net income of ¥7,194 million, foreign currency translation adjustments of ¥1,287
million, and a growth of ¥1,273 million in minority interests. Consequently, shareholders’ equity ratio

amounted to 37.6%, down from 39.1% as of the end of the previous fiscal year.

(3) Qualitative Information Regarding Consolidated Financial Forecasts
The first half and full year financial forecasts for the fiscal year ending February 28, 2014 remains
unchanged from those announced on April 10, 2013.

2．
．Other(1) Change in important subsidiaries during the period (Changes in certain specified subsidiaries resulting
in revised scope of consolidation): None
(2) Adoptions of accounting methods particular to presentation of quarterly financial statements: None
(3) Changes in accounting policies, changes in accounting estimation, retrospective restatement: Yes(Changes in accounting policies that are difficult to differentiate from changes in accounting estimation)
Pursuant to an amendment in the Corporation Tax Act, the Company and its domestic consolidated
subsidiaries have changed their depreciation method with respect to properties and store equipment
acquired on and after March 1, 2013, starting from the first quarter of the consolidated fiscal 2013 underreview.
The impact of this change on operating income, ordinary income, and income before income taxes andminority interests for the consolidated first quarter of fiscal 2013 is minimal.

73. Consolidated Financial Statements etc.
(1)Consolidated Balance Sheets (Unaudited)（Millions of yen）

As of May 31, 2013 and February 28, 2013
February 28, 2013

May 31, 2013

Cash and deposits

84,77091,318

Accounts receivable-due from franchised stores

25,374

27,675Merchandise

8,963

9,514

Accounts receivable-other

46,00849,010

Deferred tax assets

4,656

3,476

Other

11,804

17,182

Allowance for doubtful accounts(1,281)(1,392)

180,296

196,785

242,934

248,658

Accumulated depreciation(124,562)(127,617)

Buildings and structures, net

118,372

121,040

Vehicles, tools, furniture and fixtures

67,39967,764

Accumulated depreciation(52,637)(53,226)

Vehicles, tools, furniture and fixtures, net

14,761

14,53896,251

101,306

Accumulated depreciation(30,452)(34,146)

Lease assets, net

65,79967,159Other

10,205

10,197

Subtotal

209,138

212,936

Software23,914

22,382

Goodwill

9,683

10,066

Other

491

491

Subtotal

34,08932,939Long-term loans receivable

34,58032,528

Guarantee deposits

86,10986,355

Deferred tax assets

16,215

16,816

Other

20,596

20,576

Allowance for doubtful accounts(1,217)(1,172)

Subtotal

156,285

155,104

Total

399,513400,980

Total assets

579,809597,766

Current assets:

Total
Non-current assets:
Property and store equipment
Buildings and structures

Lease assets

Intangible assets;

Investments and other assets;8

（Millions of yen）
February 28, 2013

May 31, 2013

Accounts payable-trade87,187

98,845

Accounts payable-due to franchised stores

1,403

1,356

Short-term loans payable

1,431

1,543

Lease obligations

14,48915,102

Accounts payable-other

26,10527,913

Income taxes payable

14,474

4,626

Deposits received

87,529100,304

Provision for bonuses

2,544

1,330

215

186

4,412

5,768

239,794

256,977

Lease obligations

47,207

48,389Provision for retirement benefits

9,898

10,178332

350

Long-term guarantee deposited

34,80433,943

Asset retirement obligations

16,682

17,037

907

861

Total

109,833

110,761

Total Liabilities

349,627

367,738

Common stock

58,50658,506

Capital surplus

47,71847,721Retained earnings

121,154

118,359

Treasury stock(1,593)(1,591)

225,785

222,996

78

4

Revaluation reserve for land

(567)

(567)

Foreign currency translation adjustments

1,179

2,467

Total accumulated other comprehensive income

690

1,904

Subscription rights to shares

427

574

Minority interests

3,279

4,552

Total net assets

230,181230,027

Total Liabilities and net assets

579,809597,766

Current liabilities:

Provision for point card certificates
Other
Total
Non-current liabilities;

Provision for retirement benefits to executive officers

Other

Shareholders’ equity;

Total Shareholders’ equity
Accumulated other comprehensive income;
Valuation difference on available-for-sale securities9(2) Consolidated Statements of Income (Unaudited)
For the First Quarter of the fiscal year (From March 1, 2012 to May 31, 2012) (From March 1, 2013 to May 31, 2012)（Millions of yen）
May 31, 2012

May 31, 2013

Gross operating revenue

121,434

119,498

Net sales

50,87843,43638,191

32,765

12,687

10,670

Income from franchised stores

55,72458,520Other

14,832

17,540Operating revenue

70,55676,061

Operating gross profit

83,24386,732

69,29372,42913,95014,302Non-operating income;

467

740

Interest income

171

199

-

169

Other

295

371

Non-operating expenses;

654

624

Interest expenses

293

327

Loss on cancel of lease contracts

123

188

Other

237

108

13,763

14,418289-

Gain on sales of investment securities

145-

Gain on bargain purchase

144

-

3,048

2,166

340

619

2,562

1,545

145

1

Income before income taxes and minority interests

11,003

12,251

Income taxes;

4,752

5,046

Income taxes-current

3,842

4,417

Income taxes-deferred

910

628

Income before minority interests

6,251

7,205

Minority interests in income

(16)

10

Net income

6,267

7,194

Cost of sales
Gross Profit

Selling, general and administrative expenses
Operating income
Non-operating income and expenses;

Foreign exchange gains

Ordinary income
Extraordinary income and loss;
Extraordinary income;Extraordinary loss;
Loss on retirement of non-current assets
Impairment loss
Other

10

Consolidated Statements of Comprehensive Income (Unaudited)
For the First Quarter of the fiscal year (From March 1, 2012 to May 31, 2012) (From March 1, 2013 to May 31, 2012)（Millions of yen）
May 31, 2012

May 31, 2013

6,251

7,205

(10)

(73)

8

1,252

(202)

15

Total other comprehensive income

(204)

1,194

Comprehensive income

6,046

8,399

Owners of the parent

6,068

8,408

Minority interests

(21)

(9)

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of associates accounted
for using equity method

Comprehensive income attributable to11

(3) Notes to Going Concern
Not Applicable.

(4) Notes to Significant Changes in Shareholders’ Equity
Not Applicable.

12