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am pleased to report that Lawson delivered significantly higher earnings for the year ended February
29, 2004, the results for which we announced today. Total net sales declined year on year due to the
discontinuation of the high-priced Highway Card series and the adverse effects of the 2003 record cool
summer, which dampened demand during what traditionally is a very busy time of year for us. However,
our earnings improved sharply as we reaped the benefits of structural reforms and restructuring initiated
in the previous fiscal year.
Click here to find details of our operating results for the February 2004 fiscal year and forecasts for
the current fiscal year.
The significant increase in earnings stood out, but what this improvement doesn’t convey is how challenging
a year it was. The biggest challenge management faced was how to deal with the spike in the price of rice.
Ultimately, after much deliberation, I decided that Lawson would carry this burden. We had three other
choices: ask franchise stores to take the load, pass the increase on to consumers or use lower-quality
rice in our products. Motivated by a desire, first and foremost, not to undermine our relationships with
franchise stores and customers over a temporary rise in rice prices, we rejected these options. I believe
that our decision to bear the brunt of the rice price increase will create more Lawson brand equity and
translate into tangible results in the future.
I’m about to embark on my third year as president of Lawson. Looking back over the past two years,
I’m convinced that turning the company to focus more on customers and frontline operations was the
correct decision. However, there is more work to be done. The speed of change in our markets has sometimes
taken us by surprise, and more time is required for reforms aimed at making Lawson more responsive to market
change. I intend to continue to push ahead with various initiatives, placing emphasis on our intangible
assets—customer, people and organizational—that are so vital for successfully completing these
reforms. That’s because I strongly believe that the creation of an operating base that can deliver
stable growth is the best way to increase enterprise value. I want to meet our shareholders’ expectations,
not with rapid growth, but through measured growth. This is why we plan to raise the cash dividend applicable
to the year ending February 2005 from \41 per share to \70 per share. This would raise the payout ratio,
which as basic policy has been 25% until now, to 36%. Combined with investments in the future and share
buybacks premised on raising ROE, we will create more value for shareholders who have invested their hard-earned
money in Lawson.
Lawson’s vision is to become “the “hot” station in the neighborhood”—in
tune with communities and local customers. We will develop a convenience store model in pursuit of this
goal, and strive to respond to ever-changing market needs. As we work together with franchise stores, we
aim to satisfy even more customers. In more tangible terms, our goals are to help franchise stores boost
revenues and achieve our management plan. |
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| April 15, 2004 |
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Takeshi Niinami
President and CEO |
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