Weak Quarterly Earnings for Lawson Indicate Initiatives to Boost Per-Store Sales Yet to Bear Fruit
No-moat Lawson’s third-quarter results came in below our expectations and the company’s target. Weak same-store sales, coupled with a deteriorated product mix and rising subsidies for franchisees, weighed on profits. Sluggish earnings indicate that initiatives to boost per-store sales have yet to yield returns, which echoes our view that Lawson is in a less favorable position to compete with the top two players. We have made marginal changes in our forecasts but maintained our fair value estimat...Lawson and its subsidiaries are mainly engaged in the operation of convenience store chains in Japan and overseas. As of Feb 28 2017, Co. maintains 12,575 stores in Japan and 1,156 stores in China, Thailand, Indonesia, the Philippines and the U.S. Co. is also engaged in the operation of a chain of small supermarkets that seeks to develop and manufacture high-value-added products, the sale of tickets for concerts, sports events, movies and others; the import and sale of compact discs and digital versatile discs; the provision of home delivery services of foods and daily goods through the Internet; the operation of multiplex theaters; and the financial and consulting businesses.
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