Business / Corporate

Lawson and Seven & I cancel fiscal 2020 forecasts due to pandemic

JIJI, Bloomberg, Staff Report

Retailers Seven & I Holdings Co. and Lawson Inc. cannot release earnings forecasts for fiscal 2020 due to the uncertainties posed by the coronavirus outbreak, they said.

Economic activity is slowing markedly because of the government’s state of emergency declaration for Tokyo and six prefectures. This has made it even more difficult to predict earnings.

During a teleconference Thursday, Seven & I President Ryuichi Isaka said “there are many uncertainties” ahead for the year to February 2021.

“It is extremely difficult for us to give numbers” to the effects of the COVID-19 crisis, he added. Seven & I put off the release of its new midterm business plan as well.

Seven & I subsidiary Sogo & Seibu Co. is moving to temporarily close many of its department stores because of the virus.

Sales at Seven-Eleven Japan Co., the convenience store chain run by Seven & I, fell 3.2 percent in March from the previous year on a same-store basis.

The Lawson’s convenience store chain saw March sales drop as well, by around 5 percent, Lawson President Sadanobu Takemasu said.

“We can’t see whether demand and consumption will recover after the coronavirus is defeated,” Takemasu said.

In the year ended in February, Seven & I saw consolidated operating revenue fall 2.2 percent to ¥6.64 trillion, reflecting sluggish performances at its department stores and negative effects from the Oct. 1 consumption tax hike.

On the other hand, operating profit rose 3.1 percent to ¥424.2 billion, marking a record high for the ninth consecutive year, thanks to the strength of its convenience stores in and outside Japan.

Operating revenue at Lawson meanwhile rose 4.2 percent to ¥730.2 billion, bolstered partly by the popularity of its original dessert products.

Net profit, however, plunged 21.4 percent to ¥20.1 billion on the back of ballooning restructuring costs for unprofitable stores.

Though Prime Minister Shinzo Abe declared a state of emergency earlier this week, grocers and convenience stores, including those run by Seven & I and Lawson, will stay open so residents can shop for essentials.

Companies in the other major metropolitan areas prepared to close retail stores, restaurants, movie theaters and offices to contribute to the virus-containment effort.

Major department stores chains, such as Isetan Mitsukoshi Holdings Ltd. and Takashimaya Co., have decided to shut in the designated prefectures voluntarily.

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