Flash Report on the Consolidated Result
for the First Quarter Ended February 28, 2013
July 3, 2012
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 , Financial & Accounting Office General Manager
Tel.: (03) 5435-2773
Scheduled date for submission of quarterly earnings report: July 13, 2012
Scheduled date for payment of dividend: Supplementary Documents quarterly results: Yes
Presentation of quarterly results: No
1. Consolidated Performance for the current first quarter period (from March 1, 2012, to May 31, 2012)(1) Consolidated operating results
Note: Amounts below one million yen are truncated.
Total operating revenues¥ Million%
Current 1st Quarter
121,434
8.4
Previous 1st Quarter
112,020
5.1
Net profit¥ Million
6,267(1,983)%Current 1st Quarter―
Previous 1st Quarter―
Notes: Comprehensive income May, 2012 6,046 million

Operating profit¥ Million%
13,9508.4
12,874
14.9

Recurring profit¥ Million%
13,763
7.1
12,851
16.9

Net income per share¥
62.74(19.85)

Fully diluted income per share
¥
62.64
―
February, 2012 (1,785) million(2) Consolidated financial position
Total assets¥ Million
Current 1st Quarter
577,748
Last fiscal year
531,453
Notes: Capital adequacy May, 2012 207,937 million

Net assets¥ Million
210,847
214,662
February, 2012 211,154 million

Capital adequacy ratio
%
36.0
39.7

2. Dividends status
Annual dividends per share
1Q

2Q

¥
―

Year-end
dividend¥
93.00¥
180.00―95.00

190.003Q¥¥
2011 fiscal year
87.00―
2012 fiscal year―
2012 fiscal year
95.00
(Forecast)
Notes: Revision of forecast for dividends in the first quarter: None

1

Total

3. Forecast Consolidated Performance for 2012 fiscal year （from March 1, 2012, to February 28, 2013）
Operating profit
Recurring profit
Net profit
Total operating revenues¥ Million%¥ Million%¥ Million%¥ Million%
2012 first half
251,000
4.6
34,0004.4
33,6003.1
16,70086.4
2012 fiscal year
503,000
5.0
66,0006.8
65,1005.5
33,40034.2
Reference: Forecast net profit per share for the 2012 first half: 167.19yen
Forecast net profit per share for the 2012 fiscal year: 334.38yen
Note: Revision of forecasts for consolidated performance during the first quarter: None
4. Other(1) Change in important subsidiaries during the period (Changes in certain specified subsidiaries resulting inrevised 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: None
2. Other changes: None
3. Changes in accounting estimation: None
4. Retrospective restatement: None
(4) Number of issued shares:i) The number of the stocks issued in the end of term
May, 2012: 100,300,000 February, 2012: 100,300,000ii) The number of treasury shares in the end of term
May, 2012: 415,208
February, 2012: 416,166
iii) Average number of shares during the term
May, 2012: 99,883,984
May, 2011: 99,866,752
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. Therefore, actual achievements may differ from these forecasts due tomany factors.

2

1．
．Review of Operations(1) Review of Operating Results
During the first quarter (March 1 to May 31) of fiscal 2012, the year ending February 28, 2013, theLawson Group (hereinafter, the “Group”) implemented measures to reinforce a social infrastructure
function that provides essential items at the local level with the aim of realizing the Group’s corporate
philosophy of “Creating Happiness and Harmony in our Communities.” By promoting operational reform,
PRiSM, that is based on analysis of card data from the multi-partner loyalty program, Ponta, the Groupfocused on customer relationship management (CRM) and supply chain management (SCM) in order tooffer a product lineup that meets the specific needs of customers in each neighborhood.
As a result, for the first quarter of fiscal 2012, total operating revenues increased by 8.4% on aconsolidated basis from the corresponding period of the previous fiscal year to ¥121,434 million. Thiswas due to a ¥6,005 million increase in franchise commissions from franchised stores owing to a positiveeffect of measures taken to expand customer bases comprising women and the elderly. Selling, generaland administrative expenses grew by 11.6% from the corresponding period of the previous fiscal year to¥69,293 million due to a rise in sales promotion and advertising expenses. Consequently, operating
income climbed ¥1,075 million, or 8.4% from the corresponding period of the previous fiscal year to¥13,950 million. Recurring profit grew ¥911 million, or 7.1% from the corresponding period of theprevious fiscal year to ¥13,763 million. At the same time, extraordinary loss declined by ¥11,089 million
from the corresponding period of the previous fiscal year to ¥3,048 million due to asset retirement
obligations and losses stemming from the Great East Japan Earthquake disaster which were recognized in
the previous fiscal year. As a result, net income rose ¥8,250 million to ¥6,267 million.

Operating results by business segment are as follows.

(Convenience Store Operations)
The status of merchandising strategy and services, store operations, store development and other aspectsof Convenience Store Operations and Overseas Businesses for the first quarter of fiscal 2012 is outlined
as follows.
[Merchandising Strategy and Services]
On the merchandising front, the Group developed menus that cater to customer needs as follows by
leveraging customer purchase data acquired through the Ponta program, which the Group joined in March
2010. We also managed to provide appealing products that offer value for money as a result of theenhancement of added-value in the ingredients procurement process, including bulk procurement ofhigh-quality food materials via a dedicated section, which resulted in an improvement of gross margin
ratio.
In the rice category, our key merchandize segment, we offered chilled sushi boxes after carefully
reviewing ingredients and production methods and paying detailed attention to how to handle difficult3ingredients such as tuna and rice, in order to incorporate the needs of elderly customers aged 50 and over.
In the over-the-counter fast food category, we continued to focus on prepared fast foods such as croquettes
and minced cutlets and launched new menus including specialty fried chicken and new flavors for our
Karaagekun, which contributed to significant sales growth in this category.
Regarding our private brand, “Lawson select,” which is mainly comprised of prepared foods, processed
foods, and daily necessities, we expanded the product lineup in order to incorporate breakfast-related
needs. We also enhanced the selection of items targeting working women and homemakers and launched
new products such as bottled beverages, which resulted in robust sales growth in this category.
In the dessert category, we conducted an extensive study of Anko (bean paste) used at specialty
Japanese-style sweet shops and from this, developed delicious Anko by boiling Tokachi-grown adzukibeans with crystalline sugar. Sales in this category remained strong, boosted by the launch of “Ankoya,”
the authentic Japanese sweet series from our Uchi Café SWEETS line, which uses our specialty Anko as
an ingredient.
[Breakdown of sales at chain stores by merchandise category]
Fiscal period

Previous 1st Quarter

Current 1st Quarter

March 1, 2011 to May 31, 2011

March 1, 2012 to May 31, 2012

Sales

Percentage of

Sales

Percentage of(Millions of

Total (%)

(Millions of

Total (%)

Product groupyen)

Processed foods

240,157

56.0

263,772

56.4

Fast foods

77,88818.2

87,852

18.8

Daily delivered foods

65,05515.2

68,498

14.6

Nonfood products

45,714

10.6

47,81810.2

428,815100.0

467,941

100.0

Total

yen)

In sales promotions, the Group focused on campaigns anticipated to bring a high return on investment(ROI) and implemented programs centered on tie-ups with popular characters/events such as Rilakkuma
and the Spring Rilakkuma Fair. In addition, we implemented a number of loyalty point programs thattarget Ponta members with the aim of increasing the ratio of repeat customers by boosting customer
loyalty. Total Ponta members reached 41.85 million as of May 31, 2012, including members that joined
through other participating companies. In addition to expanding its Ponta membership base, Lawson
provided loyalty points exclusively to Ponta members, which resulted in an increase in the sales ratio ofPonta members to approximately 43%.
[Store Operations]
To improve store operations, we promoted the optimization of retail spaces and merchandise assortmentsthat matched customer needs specific to each neighborhood by utilizing our backbone IT system toanalyze customer sales data collected from Ponta cards, and used the analyzed data in store-based orderplacements. This operational reform in store operations method is PRiSM. Through the promotion of4

PRiSM, we have strived to enhance accuracy in order placement in order to reduce opportunity loss.
Through these measures, we will continue to work toward creating stores that fully satisfy the desires ofcustomers to purchase “whatever you want, whenever and wherever you need it.”
[Store Development and 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.
Regarding the format strategy, we promoted store openings and refurbishment to meet the needs ofcustomers specific to each neighborhood through LAWSON, NATURAL LAWSON and LAWSONStore100.
[Change in the Total Number of Stores] (March 1, 2012 – May 31, 2012)
LAWSON
Total stores as ofMarch 1, 2012
Change during fiscal
year
Total stores as of
May 31, 2012

NATURALLAWSONLAWSONSTORE100

Total

9,038

100

1,172

10,310

263

1

8

272

9,301

101

1,180

10,582[Distribution of Stores in Japan by Region (As of May 31, 2012)]
NumberPrefecture

NumberPrefectureof stores

NumberPrefectureof stores

NumberPrefectureof stores

NumberPrefectureof storesof stores

Hokkaido

561

Saitama

437

Mie

99

Okayama

126

Saga

63

Aomori

177

Chiba

419

Ishikawa

91

Hiroshima

149

Nagasaki

90

Akita

159

Ibaraki120

Toyama183

Yamaguchi

115

Oita

144

Iwate

157

Tokyo

1,488

Fukui

103

Tottori

94

Kumamoto

100

Miyagi

193

Kanagawa

756

Kyoto

260

Shimane93

Miyazaki86

Yamagata

65

Shizuoka

191

Shiga

130

Kagawa100

Kagoshima

111

Fukushima

90

Yamanashi

84

Nara

102

Ehime

164

Total

Niigata112

Nagano137

Wakayama

115

Tokushima

104

Tochigi

113

Aichi

496

Osaka

989

Kochi

62

Gunma

73

Gifu

126

Hyogo

576

Fukuoka379

The number of LAWSON STORE100 fresh foods convenience stores, operated by the Group’s
consolidated subsidiary Ninety-nine Plus Inc., reached 1,180 as of May 31, 2012. We have been
converting company operated stores into franchised stores to promote our franchise-based store
management, which is one of the Group’s strengths. In addition, at our fresh food-type LAWSON stores,that are enhanced conventional LAWSON stores with a stronger assortment of perishable foods and daily
delivered foods, we promoted a strategy to expand our customer base by attracting elderly customers andhomemakers. As of May 31, 2012, the number of these fresh food-type LAWSON stores totaled 4,273.
5

10,582

With the aim of supplying high-quality products on a steady basis, we are operating seven Lawson Farms
in Japan, which are partially funded by the Group, and are selling fresh vegetables produced at thesefarms primarily at fresh food-type convenience stores.
The number of LAWSON chain stores operated by Lawson Toyama, Inc., a consolidated subsidiary of
Lawson, Inc. (hereinafter, “the Company”), reached 74 as of May 31, 2012. The number of LAWSON
chain stores operated by the Company’s equity-method affiliate, Lawson Okinawa, Inc., through abusiness alliance agreement with SAN-A CO., LTD. totaled 150 as of May 31, 2012.
Regarding convenience stores operated by CVS Bay Area, Inc., with which the Company concluded afranchise agreement as of January 25, 2012, we promoted conversion of their stores into LAWSON stores
starting March 1, 2012 and completed the conversion of all stores by May 31, 2012.

[Overseas Operations]Regarding our business in the People’s Republic of China (hereinafter, “China”), the Company
established Lawson (China) Holdings, Inc. (hereinafter, "Lawson China") in Shanghai, China in May
2012, as a holding company (investment company) that controls business investment, license
management, and administrative management functions within China. The Company’s subsidiaries inShanghai, Chongqing and Dalian will be controlled by Lawson China in the future. The number of
LAWSON stores operated by Shanghai Hualian Lawson, Inc., the Company’s 85% subsidiary, totaled 325
as of May 31, 2012. Chongqing Lawson, Inc., the Company’s 100% subsidiary, was operating 50
LAWSON stores as of May 31, 2012 while Dalian Lawson, Inc., the Company’s 95% subsidiary, wasoperating 7 LAWSON stores as of May 31, 2012.
Outside of China, within the Republic of Indonesia, PT MIDI UTAMA INDONESIA Tbk (hereinafter,“MIDI”), in which the Company’s wholly-owned consolidated subsidiary Lawson Asia Pacific Holdings
Pte. Ltd. has a 30% equity stake, operates 548 stores in its own store format and 32 LAWSON stores in
Jakarta and its outskirts.

(Other Businesses)
In addition to convenience store operations, the Group is involved in the entertainment/e-commercebusiness, and other businesses.
We continued to leverage our alliance with Yahoo JAPAN Corporation and expanded e-commercebusiness with a primary focus on the Group’s online shopping mall, Loppi.
In April, we launched “LAWSON Wi-Fi,” an unlimited wireless LAN access service for smart phones thatcan be used to connect free of charge to any websites 24 hours a day (excluding maintenance hours after
midnight). This service has been introduced to almost all LAWSON stores, excluding some stores locatedwithin hospitals. Through this service, it has become possible for customers with Ponta cards to connect
to the Internet using their smartphones provided by major mobile phone service operators (KDDI, NTT
DoCoMo and Softbank Mobile).
6

The Company’s consolidated subsidiary Lawson HMV Entertainment, Inc., which is engaged inentertainment/e-commerce-related business, delivered robust results due to strong sales of tickets forlarge-scale shows and performances following a stagnant performance during the corresponding period of
the previous fiscal year that saw voluntary cancellations and postponements of some concerts in the wakeof the Great East Japan Earthquake.
Lawson ATM Networks, Inc., which operates a financial services-related business, has worked to increase
the number of transactions in response to the increased number of ATMs installed nationwide in
LAWSON stores. As of May 31, 2012, the number of ATMs installed nationwide totaled 9,276.
(2) Qualitative Information Regarding Changes in Consolidated Financial Indicators“Assets”
Total Assets, Total Liabilities and Net Assets at First Quarter-End
At May 31, 2012, total assets stood at ¥577,748 million, an increase of ¥46,295 million from February 29, 2012.
This mainly reflected a ¥43,582 million increase in cash and bank deposits because of an increase in billsettlement transactions and other factors“Liabilities”.
Total liabilities increased ¥50,109 million from February 29, 2012 to ¥366,900 million at May 31, 2012. This
mainly reflected a ¥49,150 million increase in deposits received due to higher bill settlement transactions andother factors.
“Net assets”
Net assets stood at ¥210,847 million, down ¥3,814 million from February 29, 2012. This is mainly due to thepayment of ¥9.289 million in dividends although quarterly net profit of ¥6,267 million.

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: None7

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

As of May 31, 2011 and May 31, 2012

May 31, 2011

May 31, 2012

Cash and bank deposits

79,074

122,657

Accounts receivable—due from franchised stores

19,521

21,609Merchandise inventories

8,075

8,407

Accounts receivable—other

32,645

34,158Deferred tax assets

4,800

3,216

Other

16,19011,511

Allowance for doubtful accounts

(149)

(158)

160,157

201,402219,536

225,009

Accumulated depreciation(112,475)(115,501)

Buildings and structures-net

107,061

109,507

Vehicles, tools, furniture and fixtures

63,56364,882

Accumulated depreciation(49,549)(50,325)

Vehicles, tools, furniture and fixtures-net

14,013

14,556

72,53877,634

Accumulated depreciation(18,400)(21,257)

Lease assets-net

54,13756,376

Other

8,622

9,030

Subtotal

183,835

189,472

Software

19,28825,387

Goodwill

10,871

10,765

Other

8,816

1,296

Subtotal

38,97737,449Long-term loans receivable

32,13832,714

Lease deposits

83,66584,223

Deferred tax assets

16,87017,551Claims provable in bankruptcy, claims provable

15,13615,142

Other

16,523

15,604

Allowance for doubtful accounts(15,851)(15,811)

Subtotal

148,483

149,424

Total

371,295

376,346

Total assets

531,453

577,748

Current assets:

Total
Fixed assets:
Property and store equipment
Buildings and structures

Lease assets

Intangible fixed assets;

Investments and Other;in rehabilitation and other8

（Millions of yen）
May 31, 2011

May 31, 2012

Accounts payable —trade88,26297,753

Accounts payable— due to franchised stores

1,390

1,543

Lease obligations

11,223

12,150

Income taxes payable

15,3054,010

Deposits received

75,004

124,155

Accrued employees’ bonuses

3,204

1,831

701

473

22,88623,356217,978

265,274

Lease obligations

37,902

39,993

Allowance for employees’ retirement benefits

8,745

8,996

308

276

Deposits received from franchisees and lessees

35,73535,752

Asset retirement obligations

15,161

15,658

960

950

Total

98,812

101,626

Total Liabilities

316,791

366,900

Common stock

58,50658,506

Capital surplus

47,70747,707Retained earnings

107,249

104,227

Treasury stock(1,627)(1,624)

211,835

208,817

Net unrealized gain on available-for-sale securities

(11)

(21)

Land revaluation difference

(567)

(567)

Foreign currency translation adjustments

(101)

(289)

Valuation and translation adjustments

(680)

(879)

Stock acquisition rights

442

442

Minority interests

3,064

2,468

Total net assets

214,662

210,847

Total Liabilities and net assets

531,453

577,748

Current liabilities:

Provision for use of points granted
Other
Total
Long-term Liabilities;

Allowance for retirement benefits to executive officers and corporate auditors

Other

Shareholders’ equity;

Total Shareholders’ equity
Valuation and translation adjustments;9(2) Consolidated Statements of Income (Unaudited)
For the 1st quarter of the fiscal year (From March 1, 2011 to May 31, 2011) (From March 1, 2012 to May 31, 2012)（Millions of yen）
May 31, 2011

May 31, 2012

Total operating revenues

112,020

121,434

Net sales

49,39950,87837,07638,191

12,322

12,687

Franchise commission from franchised stores

49,71855,724Other

12,903

14,832

Operating revenues

62,621

70,556

Operating gross profit

74,944

83,24362,06969,293

12,874

13,950Non – operating income;

463

467

Interest received

157

171

Compensation income

86

77

Equity in earnings of affiliates

25

79

Other

193

138

Non – operating expenses;

486

654

Interest expense

268

293

Loss on cancellation of store lease

84

123

Other

133

237

12,851

13,76320

289

Gain on change in equity

20-

Gain on sales of investment securities-

145

Gain on negative goodwill-

144

14,138

3,048

742

340

Impairment loss

2,219

2,562

Loss on disaster

2,841

-

Loss on adjustment for changes of accounting standard

8,292

-

41

145

(1,266)

11,003

548

4,752

Income taxes - current

2,757

3,842

Deferred income taxes(2,208)910

Income before minority interests(1,814)

6,251

Minority interests in net income

168

(16)

(1,983)

6,267

Cost of goods sold
Gross Profit

Selling, general and administrative expenses
Operating profit
Non – operating income and expenses;

Recurring profit
Extraordinary income and losses;
Extraordinary income;Extraordinary losses;
Loss on retirement of noncurrent assets

for asset retirement obligations
Other
Income before income taxes and minority interests
Income taxes;

Net profit

10Consolidated Statements of Comprehensive Income (Unaudited)
For the 1st quarter of the fiscal year (From March 1, 2011 to May 31, 2011) (From March 1, 2012 to May 31, 2012)（Millions of yen）
May 31, 2011

May 31, 2012

(1,814)

6,251

Valuation difference on available-for-sale securities

2

(10)

Foreign currency translation adjustment

128

Share of other comprehensive income of associates accounted

14

(202)

29

(204)

(1,785)

6,046(1,953)

6,068

168

(21)

Income before minority interests
Other comprehensive income

for using equity
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests11(3) Notes to Going Concern
Not Applicable.

(4) Notes to Significant Changes in Shareholders’ Equity
Not Applicable12