Flash Report on the Consolidated Result
for the First Quarter Ended February 29, 2012
July 5, 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 , Financial & Accounting Office General Manager
Tel.: (03) 5435-2773
Scheduled date for submission of quarterly earnings report: July 15, 2011
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, 2010, to May 31, 2010)(1) Consolidated operating results
Note: Amounts below one million yen are truncated.
Total operating revenues¥ Million%
Current 1st Quarter
112,020
5.1
Previous 1st Quarter
106,586(3.1)
Net profit¥ Million(1,983)
4,081

Current 1st Quarter
Previous 1st Quarter%―(31.7)

Operating profit¥ Million%
12,87414.9
11,201(8.2)

Recurring profit¥ Million%
12,851
16.9
10,995(9.1)

Net income per share¥-19.85
41.15

Fully diluted income per share
¥
―
41.11

(2) Consolidated financial position
Capital adequacy
ratio¥ Million%
198,200
36.7
208,466
42.7
February, 2011 203,479 million

Total assets

Net assets¥ Million
Current 1st Quarter
526,118
Last fiscal year
476,036
Notes: Capital adequacy May, 2011 193,036 million

Net assets per share¥
1,932.93
2,037.50

2. Dividends status
Annual dividends per share2009 fiscal year¥―

Year-end
dividend¥
85.00¥
170.00―88.00

175.00

1Q

2Q

3Q

¥
―

¥
85.00

2010 fiscal year―
2010 fiscal year
87.00
(Forecast)
Notes: Revision of forecast for dividends in the first quarter: None

1

Total

3. Forecast Consolidated Performance for 2011 fiscal year （from March 1, 2011, to February 29, 2012）
Operating profit
Recurring profit
Net profit
Total operating revenues¥ Million%¥ Million%¥ Million%¥ Million%
2011 first half
230,000
4.0
28,500(5.5)
27,600(7.0)
5,300(56.9)
2011 fiscal year
461,000
4.5
57,5003.5
55,4001.5
19,80022.0
Reference: Forecast net profit per share for the 2011 first half: 53.07yen
Forecast net profit per share for the 2011 fiscal year: 198.26yen
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
(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 statements (Those to be stated as significant accounting policies)
1. Changes associated with revision in accounting standards: Yes
2. 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 shares:i) The number of the stocks issued in the end of term
May, 2011: 100,300,000 February, 2011: 100,300,000ii) The number of treasury shares in the end of term
May, 2011: 433,287
February, 2011: 433,040
iii) Average number of shares during the term
May, 2011: 99,866,752
May, 2010: 99,167,810
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) Overview of Consolidated Operating Results
During the first quarter (March 1 to May 31, 2011) of fiscal 2011, the year ending February 29, 2012, theJapanese economy toppled back into uncertain conditions due to the influence of the power shortage
mainly affecting the Kanto region as a result of the accident at the Fukushima Daiichi Nuclear Power
Plant, coming on the top of the severe damage caused by the Great East Japan Earthquake.
In the retail industry, the supply chain was cut owing to the factory damage suffered by food
manufacturers and prepared meal vendors as well as to distribution centers, seriously affecting theoperations of these companies.
In this operating environment, the LAWSON Group (the “Company”) focused on achieving a speedy
recovery of the product supply system in the disaster-affected areas by maximizing its strengths as a chain
store operator with a nationwide network while aiming to realize its corporate philosophy of “Happinessand Harmony in Our Community.” As a result, customers in the affected areas praised our efforts tomaintain store operations, recognizing our stores as “social infrastructure” that provided neighborhoods
with essential items.
The Company also executed measures to improve customer satisfaction in convenience store operations
and other businesses. Net sales from existing stores during the first quarter of fiscal 2011 increased 3.3%
on a consolidated basis from the corresponding period of the previous fiscal year.
As a result, for the first quarter of fiscal 2011, total consolidated operating revenues increased ¥5,434
million from the corresponding period of the previous fiscal year to ¥112,020 million (up 5.1% year onyear) and ordinary income increased ¥1,855 million from the corresponding period of the previous fiscal
year to ¥12,851 million (up 16.9% year on year).
Net income decreased ¥6,064 million from the corresponding period of the previous fiscal year and theCompany posted consolidated loss of 1,983 million. This was attributable primarily to extraordinary lossof ¥2,841 million, which included losses related to supporting stores that were hit by the earthquake andtsunami and loss on retirement related to store closure due to the earthquake, etc. as well as extraordinary
loss of ¥8,292 million as a result of the adoption of asset retirement obligation accounting.
(Domestic and Overseas Convenience Store Operations)
On the merchandise front, we developed high-quality ingredients and proposed menus catering tocustomers’ needs. Based on this, we continued to promote our strategies to roll out products that would
exceed our customers’ expectations thanks to their high added value relative to price and to seek toexpand our customer segments by appealing to female and elderly customers.
In the rice dishes category, we developed and offered new chilled lunch boxes named “Lawson-Tei,”
incorporating the preferences of female customers—who have traditionally proven reluctant to purchaseconvenience store lunch boxes—with respect to not only taste and texture but also color, look and feel.
The new product has been positively received by customers.
In the dessert category, one of our main areas of focus, sales of our original Uchi Café SWEETS products3remained strong, primarily backed by the outstanding performance of the Premium Roll Cake Series,
which sold more than 100 million in total.
Sales by product group throughout all Lawson Group stores
Fiscal period

Previous 1st Quarter

Current 1st Quarter

March 1, 2010 to May 31, 2010

March 1, 2011 to May 31, 2011

Sales

Percentage of

Sales

Percentage of(Millions of

Total (%)

(Millions of

Total (%)

Product groupyen)

Processed foods

217,55554.2

240,157

56.0

Fast foods

75,134

18.7

77,88818.2

Daily delivered foods

61,775

15.4

65,055

15.2

Nonfood products

47,058

11.7

45,714

10.7

401,524100.0

428,815

100.0

Total

yen)

In sales promotions, the Company prioritized campaigns that are highly successful in boosting sales, suchas the Spring Rilakkuma Fair and the Second Keion!! Fair. These promotions were popular withcustomers.
As for services, total membership in the Ponta multi-partner shopping points program the Company
joined in March 2010 reached 32 million as of May 31, 2011, including members of other participatingcompanies. LAWSON executed measures to provide appealing point service to Ponta members whileworking to expand the membership.
In store operations, we offered guidance to stores on how to place orders based on customer-generated
data by utilizing PRiSM, our core IT system. In addition, we used data collected from the Ponta card
members to create sales spaces based on merchandise assortments tailored to the needs of local
customers.
In new store openings, the Company worked to develop stores with an emphasis on profitability byrigorously adhering to proprietary group standards for opening stores.
[Change in Total Number of Domestic Stores]
LAWSON

Total stores as ofFebruary 28, 2011
Change during fiscal
year
Total stores as of
May 31, 2011

(Stores)
NATURALLAWSON

8,686

90

LAWSONSTORE100 and
SHOP99
1,077

31

1

(9)

23

8,717

91

1,068

9,876

4

Total

9,853

Number of Domestic stores by prefecture (As of May 31, 2011)
NumberPrefecture

NumberPrefectureof stores

NumberPrefectureof stores

NumberPrefectureof stores

NumberPrefectureof storesof stores

Hokkaido

542

Saitama

393

Gifu

122

Tottori

92

Saga

62

Aomori

170

Chiba

352

Shizuoka

182

Shimane91

Nagasaki

87

Iwate

149

Tokyo

1,300

Aichi

476

Okayama123

Kumamoto

93

Miyagi

182

Kanagawa

703

Mie

94

Hiroshima

142

Oita

140

Akita

153

Niigata

104

Shiga

128

Yamaguchi

112

Miyazaki

79

Yamagata

62

Toyama

111

Kyoto

251

Tokushima

102

Kagoshima

104

Fukushima

93

Ishikawa

87

Osaka

971

Kagawa98

Total

Ibaraki

110

Fukui

99

Hyogo

558

Ehime

155

Tochigi

107

Yamanashi

73

Nara

98

Kochi

58

Gunma

68

Nagano131

Wakayama

110

Fukuoka

359

LAWSON Okinawa, the Company’s equity-method affiliate, was operating 141 stores in Okinawa
Prefecture as of May 31, 2011.
CHONGQING LAWSON CO., LTD., the Company’s consolidated subsidiary, was operating 9 stores inChongqing, China as of May 31, 2011.
SHANGHAI HUALIAN LAWSON CO., LTD., the Company’s Chinese equity-method affiliate, wasoperating 305 stores in Shanghai, China, as of May 31, 2011.
The Company’s consolidated subsidiary Ninety-nine Plus Inc., which operates a chain of fresh foodconvenience stores such as LAWSON STORE100 and SHOP99, continued to promote store openings andfranchise expansion in a proactive manner. The number of fresh food LAWSON stores (hybrid stores),namely conventional LAWSON stores but with designated sales spaces for fresh foods, was 1,284 as of
May 31, 2011.
(Other Businesses)
In addition to convenience store operations, the Company is involved in entertainment/e-commerce,
financial services, and other businesses.
The Company’s consolidated subsidiaries LAWSON ENTERMEDIA, INC., and HMV Japan K.K., which
operate entertainment/e-commerce-related businesses, posted operating income exceeding that for thecorresponding period of the previous fiscal year as a result of measures that included cost reduction
efforts, despite the negative impacts of the Great East Japan Earthquake such as voluntary restraint andpostponement of some concerts and the release of new CDs and DVDs, etc.
Meanwhile, the Company resolved at its Board of Directors’ Meeting on May 31 that it will merge
LAWSON ENTERMEDIA, INC. and HMV Japan K.K. as of September 1 in order to maximize synergy
effects in the entertainment/e-commerce business in the future. LAWSON will work to increase the

5

9,876

competitiveness and corporate value of the LAWSON Group in entertainment/e-commerce throughimproved operational efficiency, while leveraging the strengths of both companies. This will be achieved
through integrated organizational management, fast decision-making and the reallocation of management
resources.
LAWSON ATM Networks, Inc., which operates a financial services-related business, has been working toincrease the number of transactions in response to the increased number of automatic teller machines
installed nationwide in LAWSON stores. As of May 31, 2011, the number of ATMs installed nationwide
reached 8,614.

2. Qualitative Information Regarding Changes in Other Consolidated Financial
Indicators(1) Financial Position at the First quarters end
Total Assets, Total Liabilities and Net Assets at First Quarter-End
At May 31, 2011, total assets stood at ¥526,118 million, an increase of ¥50,081 million from February 28, 2011.
This mainly reflected a ¥44,679 million increase in cash and bank deposits because of an increase in billsettlement transactions and other factors.
Total liabilities increased ¥60,348 million from February 28, 2011 to ¥327,918 million at May 31, 2011. This
mainly reflected a ¥45,566 million increase in deposits received due to higher bill settlement transactions andother factors.
Net assets stood at ¥198,200 million, down ¥10,266 million from February 28, 2011. This is primarily due tothe decrease of retained earnings by 10.471 billion yen, following the payment of 8.488 billion yen in
dividends and the posting of a quarterly net loss of 1.983 billion yen.
(2) Cash Flows During First Quarter
Cash and cash equivalents at May 31, 2011 were ¥108,992 million, up ¥41,280 million compared with
February 28, 2011.
Operating activities provided net cash of ¥59,970 million, an increase of ¥5,432 million from the corresponding
period of the previous fiscal year, mainly due to increase in deposits received.
Investing activities used net cash of ¥7,871 million, a decrease of ¥3,050 million from the corresponding periodof the previous fiscal year, mainly due to a increase in payment for the time deposits.
Financing activities used net cash of ¥10,829 million, an increase of ¥72 million over the corresponding periodof the previous fiscal year, mainly due to an increase in payments of Dividend.

3. 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 to presentation ofquarterly financial statements:
6

① Adoption of simplified accounting methods
Regarding property and store equipment to which the declining-balance method is applied, theamount of depreciation is calculated by apportioning depreciation equally during the period.
② Accounting methods particular to presentation of quarterly financial statements: None7

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

As of May 31, 2011 and February 28, 2011
May 31, 2011

February 28, 2011

Cash and bank deposits

119,496

74,816

Accounts receivable—due from franchised stores

15,623

16,159-2,999

Merchandise inventories

7,408

7,011

Accounts receivable—other

29,42629,285

Deferred tax assets

3,360

4,943

Other

10,311

9,891

(95)

(97)

185,531145,009

204,085

192,865

Accumulated depreciation(103,874)(96,463)

Buildings and structures-net

100,210

96,401

Vehicles, tools, furniture and fixtures

61,927

61,156

Accumulated depreciation(49,258)(47,914)

Vehicles, tools, furniture and fixtures-net

12,66813,24162,721

58,311

Accumulated depreciation(11,162)(9,120)

Other-net

51,55949,190164,438

158,833

Software27,962

27,901

Goodwill

7,374

7,717

Other

476

477

Subtotal

35,81236,096Long-term loans receivable

31,426

31,825

Lease deposits

81,96381,654

Deferred tax assets

17,042

13,253Claims provable in bankruptcy, claims provable in rehabilitation and other

15,395

15,372

Other

10,567

10,037

Allowance for doubtful accounts(16,060)(16,047)

Subtotal

140,335

136,096

Total

340,586

331,026

Total assets

526,118

476,036

Current assets:

Marketable securities

Allowance for doubtful accounts
Total
Fixed assets:
Property and store equipment
Buildings and structures

Other

Subtotal
Intangible fixed assets;

Investments and Other;8

（Millions of yen）
May 31, 2011

February 28, 2011

Accounts payable —trade91,39881,398

Accounts payable— due to franchised stores

1,539

1,179

Income taxes payable

2,982

10,673

107,906

62,340Accrued employees’ bonuses

1,737

3,768

Provision for use of points granted

1,126

1,287

Other

30,861

31,947

237,541

192,595

7,802

7,529

237

234

Deposits received from franchisees and lessees

36,494

37,139Asset retirement obligations

14,178-

Other

31,66330,070Total

90,37674,974

Total Liabilities

327,918

267,570

Common stock

58,50658,506

Capital surplus

47,696

47,696

Retained earnings

89,136

99,608Treasury stock(1,694)(1,693)

Total Owners’ equity

193,645

204,117

(2)

(4)

(634)

(634)

28

1

Valuation and translation adjustments

(609)

(638)

Stock acquisition rights

405

405

Minority interests

4,758

4,581

Total net assets

198,200

208,466

Total Liabilities and net assets

526,118

476,036

Current liabilities:

Deposits received

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(Unaudited)
For the first quarter of the fiscal year ending May 31, 2010 and 2011 (March 1, 2011-May 31, 2011)（Millions of yen）
May 31, 2010

May 31, 2011

Total operating revenues

106,586

112,020

Net sales

48,02649,39935,54437,076

12,482

12,322

Franchise commission from franchised stores

46,30849,718Other

12,251

12,903Operating revenues

58,55962,621

Operating gross profit

71,042

74,944

59,84062,069

11,201

12,874

Non – operating income;

501

463

Interest received

163

157

Compensation income

142

-

Other

195

305

Non – operating expenses;

706

486

Interest expense

220

268

Loss on cancellation of store lease

350

84

Other

136

133

10,995

12,851

-

20

-

20

3,172

14,138

747

742

2,180

2,219

Loss on disaster

-

2,841

Loss on adjustment for changes of accounting standard

-

8,292

244

41

Income before income taxes and minority interests

7,823(1,266)

Income taxes;

3,567

548

Income taxes - current

1,685

2757

Deferred income taxes

1,881(2,208)

174

168

4,081

(1,983)

Cost of goods sold
Gross Profit

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

Recurring profit
Special gains and losses;
Special gains;
Gain on change in equity
Special losses;
Loss on disposal of fixed assets
Loss on impairment of long-lived assets

for asset retirement obligations
Other

Minority interests in net income
Net profit

10

(3)Consolidated Statements of Cash Flows(Unaudited)
For the first quarter of the fiscal year ending May 31, 2010 and 2011 (March 1, 2011-May 31, 2011)(Millions of yen)
May 31, 2010

May 31, 2011

Income before income taxes

7,823(1,266)

Depreciation of fixed assets

7,640

8,679

Increase in provision for allowance for retirement benefits to employees

276

272

Interest received and dividend income received

(163)

(157)

Interest expense

220

268

2,180

2,219

400

747

Loss on disaster

-

2,841

Loss on adjustment for changes of accounting standard for

-

8,292

Other-net(1,674)(1,449)

Increase in accounts receivable due from franchised stores

6,544

(881)

189

(145)

Increase in accounts payable—trade and due to franchised stores

9,013

10,475Decrease in accounts payable—other(6,199)(1,577)

Increase in deposits received

36,42545,566

Decrease in lease deposits from franchisee and lessees

(248)

(644)

Other-net

2,394(1,085)

Subtotal

64,822

72,156

Interest and dividend income received

162

161

Interest expenses paid

(220)

(268)

(10,227)(11,028)-(1,049)Operating activities;

Loss on impairment of long-lived assets
Loss from disposal of fixed assets

asset retirement obligations

Decrease in accounts receivable-other

Income taxes paid
Payments for loss on disasterNet cash flows provided by operating activities

54,53759,970

Payments into time deposits(400)(9,900)

Proceeds from withdrawal of time deposits

3,000

9,500

455

-

Payment for acquisition of property and store equipment(4,941)(4,789)Payment for acquisition of intangible fixed assets(2,402)(1,952)

(532)

(729)

(4,820)(7,871)

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;
Repayments of lease obligations(2,801)(2,322)

Cash dividends paid

(7,933)(8,488)

(21)

(18)

Net cash used in financing activities(10,756)(10,829)

Net cash used in financing activities

-

10

Other

Net increase in cash and cash equivalents

38,96041,280Cash and cash equivalents, beginning of year

54,84367,712

Cash and cash equivalents at end of period

93,803

108,99212

(4) Notes to Going Concern
Not Applicable(5) Segment Information[Business segment information](From March 1, 2010 to May 31, 2010)
The Company operates mainly the franchised store business and total operating revenue, operating income andtotal assets of the franchised store business account for more than 90% of the respective consolidated totals at all
segments for current 1st Quarter, therefore information by industry segment is omitted.

[Geographic segment information](From March 1, 2010 to May 31, 2010)
Because net sales in Japan account for more than 90% of total net sales, LAWSON has omitted geographicalsegment information.

[Overseas sales](From March 1, 2010 to May 31, 2010)
Overseas sales account for less than 10% of consolidated sales at all segments for current 1st Quarter, therefore
overseas sales information is omitted.

[Segment Information]i) Outline of reporting segments
The Company’s financial information is provided separately by reporting segment and is subject to regular review
by the board of directors with regard to the allocation of managerial resources and performance evaluation.
The Group’s primary business is the operation of convenience stores, which is undertaken by the incorporation ofrelated businesses.
Therefore, the Group has made the convenience store unit its main reporting segment, based on consideration offinancial characteristics and the nature of the services provided.
LAWSON and 99plus running the LAWSON, NATURAL LAWSON, LAWSON STORE 100 and other chains, theconvenience store unit operates a franchise system as well as undertaking the direct management of stores inJapan.

13ii) Information related to the amount of sales, profit and loss by segment
Consolidated performance for the current first quarter period (from March 1, 2011, to May 31, 2011)( million yen)Amount postedon the quarterly
Convenience
Others (Note 1)

Adjusted

consolidated

amountprofit and loss

Total

store businessstatement (Note2)
Total
operatingrevenues
Sales toexternal
98,234

13,785

112,020-

112,020

500

402

903

（903）

-

98,735

14,188112,923（903）

112,020

12,126

747

12,874-

12,874

customersInternal
sales ortransfers
betweensegments
Total
Segment
profit(Note) 1. The “other” category refers to business segments that do not fall under the main reporting segment andincludes the entertainment/e-commerce segment and overseas segment.
2. The segment profit is adjusted against the operating profits of the quarterly consolidated profit and loss
statement.

iii)Information related to impairment loss or goodwill of fixed assets by reporting segment(Significant impairment losses related to fixed assets)

The Group defines a store as the primary basic unit and the smallest unit that generates cash flow. For asset groups
that have continuously generated losses from their sales activities, their book value has been reduced to arecoverable amount and such amount has been posted as impairment loss under extraordinary losses.
The amount posted for the convenience store segment is 2,218 million yen.

(6) Notes to Significant Changes in Shareholders’ Equity
Not Applicable14