Flash Report on Consolidated Results
for the 3rd Quarter of the Fiscal Year Ending February 28, 2011
January 11, 2011
Listed Company Name: LAWSON, INC.
Code No.: 2651
(URL http://www.lawson.co.jp/company/ir/index.html)
Company Representative: Takeshi Niinami, Representative Director, President & CEO
Contact:Tomoki Takanishi , General Manager , Financial & Accounting OfficeTel.: (03) 5435-2773
Scheduled date for submission of quarterly earnings report: January 14, 2011
Scheduled date for payment of dividend: Supplementary Documents quarterly results: Yes
Presentation of quarterly results: No
1. Consolidated Performance for the 3rd Quarter of the Current Period (from March 1, 2010, to November 30,
2010)(1) Consolidated operating results
Note: Amounts below one million yen are truncated.
Total operating revenues% change¥ million
Current 3rd Quarter
331,141（2.5）
Previous 3rd Quarter
339,656
Net profit% change¥ million
20,7895.0
19,805-Current 3rd Quarter
Previous 3rd Quarter

Operating profit% change¥ million
45,9204.4
44,001
Net profit per share¥
208.62199.71

Recurring profit% change¥ million
45,287
4.3
43,435
Fully diluted profit per share¥
208.40199.55(2) Consolidated financial position
Total assets¥ million
At November 30, 2010
463,692
At February 28, 2010
448,131
Notes: Equity November, 2010 ¥198,908 million

Net assets
Equity ratio¥ million%
203,68742.9
198,135
42.8
February, 2010 ¥191,930 million

Net assets per share¥
1,991.72
1,935.41

2. Dividends status
Annual dividends per share
1Q

2Q

3Q

¥
¥
¥
2009 fiscal year
80.00
―
―
2010 fiscal year
85.00
―
―
2010 fiscal year
(Forecast)
Note: Revision of forecast for dividends in the second quarter: None1Year-end
dividend¥
80.00¥
160.0085.00

170.00Total

3. Forecast Consolidated Performance for 2010 Fiscal Year （From March 1, 2010, to February 28, 2011）
Total operating revenues
Operating profit
Recurring profit
Net profit¥ million%¥ million%¥ million
2010 fiscal year
439,000(6.0)
53,0005.4
51,600
Reference: Forecast net profit per share for the 2010 fiscal year: 232.30yen
Note: Revision of forecasts for consolidated performance during the third quarter: Yes%
4.4¥ million
23,2004. Other (Note) Please refer to Other on page 7 of the attachment for further details.
(1) Change in important subsidiaries during the period: None
(Note) This indicates any changes in specified subsidiaries during the second quarter resulting from a revisionof the scope of consolidation.
(2) Adoptions of simplified accounting methods or special accounting methods in presentation of quarterly
financial statements: Yes(Note) This indicates whether any simplified accounting methods or special accounting methods were adopted
in preparation of the quarterly financial statements.
(3) Changes in accounting principles, procedures, presentation methods, etc., pertaining to preparation of
consolidated financial statementsi) Changes associated with revision in accounting standards: Yesii) Other changes: None
(Note) This indicates whether there were any changes in the accounting principles, procedures, presentation
methods, etc. pertaining to the preparation of the consolidated financial statements as stated under Changes inSignificant Accounting Policies for the Presentation of the Quarterly Financial Statements.
(4) Number of issued sharesi) The number of shares issued at the end of term
November, 2010: 100,300,000
February, 2010: 99,600,000ii) The number of treasury shares in the end of term
November, 2010: 432,513
February, 2010: 432,190
iii) Average number of shares during the term
November, 2010: 99,652,292
November, 2009: 99,167,908
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 had not been completed.
Note: The above-mentioned forecast is based on the information, which is able to get hand at present, andincluding a potential risk and uncertainty. Actual achievements may differ from these forecasts due to manyfactors.

2

%
84.7

1．Review of Operations(1) Review of Consolidated Operating Results
During the first nine months of fiscal 2010, the period from March 1 to November 30, 2010, the convenience
store industry in Japan benefitted from one of the hottest summers on record, and a surge in demand forcigarettes ahead of a tobacco tax hike on October 1, 2010.
In this operating environment, the LAWSON Group (the “Company”) took the following actions with the aimof improving customer satisfaction in CONVENIENCE STORE operations and other businesses to realize its
corporate philosophy of “Happiness and Harmony in Our Community.”
In terms of consolidated financial results for the first nine months of the fiscal year, total operating revenues
were ¥331,141 million, down ¥8,514 million, or 2.5%, compared to the corresponding period of the previous
fiscal year. Recurring profit was ¥45,287 million, up ¥1,852 million, or 4.3%, year on year. Net profit was¥20,789 million, an increase of ¥983 million, or 5.0%, over the same period in the previous fiscal year.

(Convenience Store Operations)
On the merchandise front, we continued to roll out products offering a positive “surprise” to customers with
their high added value relative to price by using high-quality ingredients procured through integrated
purchasing. During the first nine months of fiscal 2010, LAWSON launched a series of upscale boxed lunches,“Gohoubi-no-hitotoki” (Enjoy luxury time), based on the concept of “boxed lunches that give customers extra
satisfaction.” These boxed lunches have proven very popular with customers. In November, revamped our
Onigiri-ya rice-ball brand by extending the use of the well-known Niigata-grown Koshihikari rice from Niigata
Koshihikari rice balls to all Onigiri-ya rice balls. We supported this move with an aggressive advertising andpromotion campaign to further boost brand recognition.

Sales promotion activities during the period were focused chiefly on tie-ups with well-known characters thatyield excellent results relative to investment. These included the Keion!! Fair in addition to the Fall Rilakkuma
Fair, and the Evangelion Campaign.

In services, we established a system for issuing the Ponta multi-partner shopping point card instantly in storesbased on requests from customers. We continue to make this service more convenient and attractive tocustomers. For example, since October we have increased the number and types of merchandise eligible for
Otameshi hikikai-ken (trial exchange vouchers), which is one way to use Ponta points.
In store operations, to guide franchise owners to place orders from the perspective of customers, we utilized
our IT system, PRiSM, to create sales areas based on analysis of purchase data from the multi-partner shopping
points program. In addition, we worked to raise ordering precision by using PRiSM to show clearly where sales
opportunities are being lost. This has boosted customer satisfaction even higher.
In new store openings the Company worked to develop stores with an emphasis on profitability, by rigorously
adhering to proprietary group standards for opening stores.

3

[Change in Total Number of Stores](Stores)

LAWSON

Total stores as ofMarch 1, 2010

Total

SHOP99
89

996

9,625

135

2

34

171

8,675

91

1,030

9,796

year

November 30, 2010

STORE100 and

LAWSON

8,540

Change during fiscal

Total stores as of

LAWSON

NATURALLAWSON conducted a share exchange on July 1, 2010 that made it the sole parent company of Ninety-nine
Plus Inc., which operates the LAWSON STORE100 and SHOP99 formats. Ninety-nine Plus Inc. continued to
introduce LAWSON Group private brand (PB) Value Line products at stores it operates and boxed lunches thatare kept in chilled units. Ninety-nine Plus Inc. The number of stores managed by Ninety-nine Plus Inc. was
1,030 as of November 30, 2010.
As of November 30, 2010, the number of LAWSON stores operated by equity-method affiliate LAWSON
Okinawa, Inc. in Okinawa Prefecture was 139.
SHANGHAI HUALIAN LAWSON CO., LTD., a Chinese equity-method affiliate, in Shanghai, China, wasoffering guidance to 314 stores as of November 30, 2010.
Furthermore CHONGQING LAWSON CO., LTD. which LAWSON has a 100% equity interest, was operating
four stores as of November 30, 2010,.

(Other Businesses)
In addition to convenience store operations, the Company is also involved in ticket sales, and financial-related
services.
LAWSON ENTERMEDIA, INC., which operates the ticket sales business, reported strong ticket transaction
volumes for events and leisure activities during the period under review. LAWSON ENTERMEDIA has also
made progress in responding to the misappropriation of funds that came to light in the previous business year.
Specifically, LAWSON ENTERMEDIA has strengthened internal controls through activities led by the internal
Risk Management & Compliance Committee.
LAWSON ATM Networks, Inc., which operates a financial services-related business, recorded higher operating
revenues and operating profit as a result of increases in the number of ATM machines installed nationwide in
LAWSON stores and in the number of transactions. As of November 30, the number of ATMs installed
nationwide reached 8,046.
Furthermore, advertising business operator Cross Ocean Media, Inc. worked to develop and operate newhigh-value-added media such as digital signage.

4

LAWSON concluded a stock transfer agreement with HMV Japan K.K. on October 28, 2010. This agreement
has made HMV Japan a LAWSON wholly-owned subsidiary, and is intended to expand the Group’s
entertainment business and increase its competitiveness in this area.

Sales by product group throughout all Lawson Group stores
Fiscal period Previous 3rd Quarter

Current 3rd Quarter

March 1, 2009 to November 30, March 1, 2010 to November 30,
2009

Product group

2010

Sales

Percentage

Sales

Percentage(Millions of yen)

Of

(Millions of yen)Of

Total (%)

Total (%)

Processed foods

682,86554.5

676,491

53.4

Fast foods

246,50919.7

243,984

19.2

Daily delivered foods

175,237

14.0

199,644

15.8

Nonfood products

148,115

11.8

146,952

11.6

1,252,727

100.0

1,267,073

100.0

Total

Some merchandise that was classified under fast food in the first half of the previous fiscal period has been reclassified
under daily delivered goods in the presentation for the first half of the current fiscal period. The effect of the change is
6,594 million yen.

5

Number of stores by prefecture (As of November 30, 2010)
Number ofPrefecture

Number ofPrefecture

storesNumberPrefecture

storesNumber ofPrefectureof stores

Number ofPrefecture

storesstoresHokkaido

533 Saitama

384 Gifu

123 Tottori

89 Saga

61

Aomori

168 Chiba

349 Shizuoka

178 Shimane

90 Nagasaki

85

Iwate

161 Tokyo

1,280 Aichi

465 Okayama

122 Kumamoto

91

Miyagi

194 Kanagawa

691 Mie

96 Hiroshima

140 Oita

140

Akita

152 Niigata

103 Shiga

125

112 Miyazaki

80

Yamagata

60 Toyama

111 Kyoto

252 Tokushima

103

106

Fukushima

99 Ishikawa

89 Osaka

960 Kagawa

99 Total

Ibaraki

108 Fukui

99 Hyogo

548 Ehime

154

Tochigi

108 Yamanashi

70 Nara101 Kochi

57

Gunma

69 Nagano

131 Wakayama

110 Fukuoka

350

Yamaguchi

Kagoshima(2)Qualitative Information Regarding Changes in Other Consolidated Financial Indicators
1) Total Assets, Total Liabilities and Total Net Assets
As of November 30, 2010, total assets stood at ¥463,692 million, an increase of ¥15,560 million fromFebruary 28, 2010. This mainly reflected a ¥12,284 million increase in cash and bank deposits.
Total liabilities increased ¥10,008 million from February 28, 2010 to ¥260,005 million. This mainlyreflected a ¥12,514 million increase in accounts payable-trade.
Net assets stood at ¥203,687 million, up ¥5,551 million from February 28, 2010. This primarily reflected
a ¥6,176 million increase in capital surplus, the result of executing share exchanges to make consolidated
subsidiaries Ninety-nine Plus Inc. and LAWSON ENTERMEDIA, INC. wholly owned subsidiaries of
LAWSON.
2) Cash Flows during the 3rd Quarter
Cash and cash equivalents at November 30, 2010 stood at ¥59,627 million, up ¥4,784 million fromFebruary 28, 2010.
Operating activities provided net cash of ¥57,794 million, an increase of ¥16,926 million from thecorresponding period of the previous fiscal year, mainly due to increases in accounts payable-trade anddue to franchised stores.
Investing activities used net cash of ¥26,468 million, a decrease of ¥4,579 million from the corresponding
period of the previous fiscal year, mainly due to a decrease in payment for acquisition of property andstore equipment.
Financing activities used net cash of ¥26,528 million, an increase ¥4,242 million more year on year. This
mainly reflected an increase in payments for purchase of treasury stock.

6

9,796

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 simplified accounting methods and accounting methods particular topresentation of quarterly financial statements:① Adoption of simplified accounting methods: Yes
Regarding property and store equipment to which the declining-balance method is applied, the amount ofdepreciation is calculated by apportioning depreciation equally during the period.
② Accounting methods particular to presentation of quarterly financial statements: None

(3) Changes in accounting principles, procedures, presentation methods, etc., pertaining topreparation of consolidated financial statements (Those to be stated as significant accounting
policies):
The Company is applying the Accounting Standard for Business Combinations (ASBJ Statement
No.21, December 26, 2008), the Accounting Standard for Consolidated Financial Statements(ASBJ Statement No.22, December 26, 2008), and the Implementation Guidance on Accounting Standard forBusiness Combinations and Business Divestitures (ASBJ Guidance No.10, December 26, 2008) from this fiscal
year.

7

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

As of November 30, 2010 and February 28, 2010
November 30, 2010

February 28, 2010

Cash and bank deposits

76,30164,017

Accounts receivable—due from franchised stores

19,212

20,790Marketable securities

―

2,500

Merchandise inventories

4,839

4,446

Accounts receivable—other

26,857

26,445

Deferred tax assets

2,914

4,587

Other

9,853

9,567

Allowance for doubtful accounts

(132)

(155)

139,847

132,198

189,031

183,841

Accumulated depreciation(93,906)(87,388)

Buildings and structures－net

95,12596,452

Vehicles, tools, furniture and fixtures

57,71457,241

Accumulated depreciation(45,258)(44,383)

Vehicles, tools, furniture and fixtures－net

12,456

12,85853,76838,565

Accumulated depreciation(7,129)(2,567)

Other－net

46,63835,997

154,220

145,308

Software27,30329,674

Goodwill

7,318

4,248

Other

486

484

Subtotal

35,10834,407Long-term loans receivable

31,83529,724

Lease deposits

81,322

83,205

Deferred tax assets

12,956

15,274Claims provable in bankruptcy, claims provable in rehabilitation

15,124

13,631

9,207

9,018

Allowance for doubtful accounts(15,929)(14,636)

Subtotal

134,516

136,216

Total

323,845

315,933

Total assets

463,692

448,131

Current assets:

Total
Fixed assets:
Property and store equipment
Buildings and structures

Other

Subtotal
Intangible assets;

Investments and Other;and otherOther

8

（Millions of yen）
November 30, 2010

February 28, 2010

Current liabilities:
Accounts payable —trade85,70373,189867

1,024

Income taxes payable

5,387

9,852

Deposits received

64,94865,858

Accrued employees’ bonuses

1,490

2,789

Provision for use of points granted

1,025

2,097

Other

27,60529,684

187,027

184,496

6,962

6,206

215

217

Deposits received from franchisees and lessees

37,922

38,710Other

27,87820,365

Total

72,97865,499Total Liabilities

260,005

249,996

Common stock

58,50658,506

Capital surplus

47,696

41,520Retained earnings

95,011

94,171

Treasury stock(1,691)(1,713)

Total Owners’ equity

199,522

192,485

3

14

(634)

(634)

16

65

Valuation and translation adjustments

(614)

(554)

Stock acquisition rights

354

346

Minority interests

4,424

5,858

Total net assets

203,687

198,135

Total Liabilities and total net assets

463,692

448,131

Accounts payable— due to franchised stores

Total
Long-term Liabilities;
Allowance for employees’ retirement benefits
Allowance for retirement benefits to executive officers
and corporate auditors

Owners’ equity;

Valuation and translation adjustments;
Net unrealized gain on available-for-sale securities
Land revaluation difference
Foreign currency translation adjustments9(2) Consolidated Statements of Income
For the third quarter of the fiscal year ending February 28, 2010 and 2011 (March 1, 2010 – November 30, 2010)（Millions of yen）
November 30, 2009 November 30, 2010
Operating revenues

178,559

188,198

Franchise commission from franchised stores

142,635

149,651

Other

35,92438,546

Net sales

161,096

142,942

Total operating revenues

339,656

331,141

Cost of goods sold119,744

105,980

Operating gross profit

219,911

225,161

175,910

179,240

44,00145,920

1,199

1,301

Interest received

521

493

Equity in earnings of affiliates―

228

Compensation income

308

196

Other

369

383

1,765

1,934

228

706

1,079

959

457

268

43,43545,287655

1Gain on sales of noncurrent assets

27―

Gain on change in equity

625―

Gain on sales of investment in securities

―

1

Other

2

―

9,816

8,363

2,627

2,229

―

1,284

Loss on impairment of long-lived assets

2,394

4,311

Allowance for doubtful accounts

4,120

―

674

537

Income before income taxes and minority interests

34,27336,925

Income taxes;

14,303

15,489

Income taxes - current

15,484

11,497

Deferred income taxes(1,180)3,991

Minority interests in net profit

164

646

19,80520,789Selling, general and administrative expenses
Operating profit
Non – operating income and expenses;
Non – operating income;Non – operating expenses;
Interest expense
Loss on cancellation of store lease
Other
Recurring profit
Extraordinary income and loss;
Extraordinary income;Extraordinary loss;
Loss on retirement of noncurrent assets
Loss on sales of noncurrent assets

Other

Net profit
10

(3)Consolidated Statements of Cash Flows
For the third quarter of the fiscal year ending February 28, 2010 and 2011 (March 1, 2010－November 30, 2010)(Millions of yen)
November 30, 2009 November 30, 2010
Operating activities;
Income before income taxes

34,27336,925

Depreciation and amortization

19,021

24,148880

755Interest received

(521)

(493)

Interest expense

228

706

Loss on impairment of long-lived assets

2,394

4,311

Loss on retirement of noncurrent assets

1,535

1,379

Other-net

3,470

(619)

Decrease (increase) in accounts receivable due from franchised stores

5,920

1,578

Decrease (increase) in accounts receivable－other

3,680

(416)

Increase (decrease) in accounts payable—trade and due to franchised

4,553

12,357(11,144)(7,019)

Increase (decrease) in deposits received

2,267

(910)

Increase (decrease) in guarantee deposits received from franchisee(3,073)(788)

Other-net(4,929)2,167

Subtotal

58,55574,082

Interest income received

520

496

Interest expenses paid

(229)

(706)

(17,977)(16,078)

40,86857,794

Payments into time deposits(6,080)(23,000)

Proceeds from withdrawal of time deposits

1,500

15,500

Payment for purchase of marketable securities(2,799)―Proceeds from redemption of marketable securities

4,100

2,500

―

455

Payment for acquisition of property and store equipment(18,672)(15,845)

Payment for acquisition of intangible fixed assets(7,256)(5,280)Purchase of stocks of subsidiaries and affiliates

(110)

―

(1,729)(798)(31,048)(26,468)

Increase (decrease) in provision for allowance for retirement benefits
to employees

storesIncrease (decrease) in accounts payable—otherand lessees

Income taxes paid
Net cash flows provided by operating activities
Investing activities;

Proceeds from purchase of investments in subsidiaries resulting inchange in scope of consolidation

Other – net
Net cash used in investing activities

11Financing activities;
Repayment of long-term loans payable(1,968)―

Repayments of lease obligations(4,233)(6,543)

Cash dividends paid

(15,866)(16,422)―(3,507)

(217)

(55)

(22,286)(26,528)―(12)

Net increase (decrease) in cash and cash equivalents(12,466)

4,784

Cash and cash equivalents, beginning of period

83,981

54,843

Cash and cash equivalents at end of period

71,51559,627Purchase of treasury stock
Other
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents12(4) Notes to Going Concern
Not Applicable(5) Segment Information
1.

Business segment information
The Company operates mainly the franchised store business and total operating revenue, operating income of the
franchised store business account for more than 90% of the respective consolidated totals at all segments for thenine-month period ended November 30, 2010, therefore business segment information is excluded.

2.

Geographic segment information
Net sales in Japan account for more than 90% of total net sales at all segments for the nine-month period ended
November 30, 2010, therefore geographical segment information is excluded.

3.

Overseas sales
Overseas sales account for less than 10% of consolidated sales at all segments for the nine-month period ended
November 30, 2010, therefore overseas sales information is excluded.

(6) Notes to Significant Changes in Shareholders’ Equity
As a result of the share exchange between LAWSON and Ninety-nine Plus Inc. effected on July 1, 2010, legal
capital surplus increased 5,069 million yen. Furthermore, legal capital surplus reserve increased 1,107 million yen
as a result of a share exchange between LAWSON and LAWSON ENTERMEDIA, INC. on the same date.
LAWSON repurchased 902,300 shares of common stock of the Company for 3,505 million yen in accordance witha resolution passed at the Board of Directors’ meeting held on July 5, 2010. Moreover, based on a resolution
passed at the Board of Directors’ meeting held on August 3, 2010, the Company on August 11 cancelled 902,189
shares of treasury stock costing 3,528 million yen.

13