Japan's Lawson lifts outlook, buoyed by tobacco sales

Japan's second-largest convenience store chain Lawson Inc. lifted its full-year profit outlook above the market forecast on Friday, buoyed by a big jump in tobacco sales.

Lawson and rival chains such as Seven & I Holdings' Seven-Eleven have been bucking the overall retail trend and enjoying strong sales this year as smokers shun new vending machines that require IDs and instead use their stores. Lawson said it now expects operating profit of 48 billion yen ($457 million) for the year ending in February 2009, up 12.9 percent from the previous outlook and above the average forecast of 47.1 billion yen in a poll of 13 analysts by Reuters Estimates. Lawson said its same-store sales for the six months ended in August rose 4.5 percent, of which 4 percentage points were attributed to tobacco sales. Its sales of food items such as rice balls also rose as a growing number of consumers switched to taking meals home from eating out as they tried to rein in spending amid rising fuel and grocery bills and economic uncertainty. Prior to the announcement, shares of Lawson closed 5.2 percent higher at 5,220 yen, outperforming a 1.9 percent fall in the benchmark Nikkei average


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