Three F Co.,Ltd.

Business Details

The segment comprises two companies: Three F Co., Ltd. and its consolidated subsidiary L.T.F Co., Ltd. L.T.F Co., Ltd. has entered into a corporate franchise agreement with Lawson, Inc. and operates as the chain headquarters for 325 "Lawson・Three F" stores across Kanagawa, Tokyo, Chiba, and Saitama (Tokyo and three prefectures), providing franchisee management guidance and operating directly managed stores. Three F Co., Ltd. handles business administration and product development support, in addition to directly operating 3 stores under the new format "gooz". In the medium- to long-term management plan (FY2021 (ending February 2021) through FY2027 (ending February 2027)), "average daily sales per store" and "franchisee profit" are set as the most important indicators for improvement.

Recent Overview

Q1 got off to a strong start, with both operating revenue and operating profit increasing year on year

In Q1 of FY2027 (ending February 2027) (March to May 2026), operating revenue was ¥3,755 million (up 2.8% year on year), operating profit was ¥397 million (up 15.2%), ordinary profit was ¥399 million (up 15.4%), and quarterly net income attributable to owners of parent was ¥118 million (up 18.0%). Success of Lawson chain sales promotion measures such as the "Hapi Toku Festival" led to customer traffic and average daily sales per store exceeding the prior-year level. Synergy between the "Karaage Kun Thanksgiving Festival" and the proprietary "yakitori" campaign drove a substantial increase in counter fast food sales. Beverage and ice cream sales were also strong due to high temperatures. The full-year earnings forecast remains unchanged (operating profit of ¥1,330 million, down 6.0% year on year).

Key Products

Growth Drivers

• Continued improvement in customer traffic and average daily sales per store driven by aggressive sales promotion measures such as the Lawson chain's "Hapi Toku Festival"
• Substantial increase in counter fast food sales through synergy between Lawson measures such as the "Karaage Kun Thanksgiving Festival" and the proprietary "yakitori" campaign
• Improved gross margin and expanded prepared food sales and reduced disposal losses through enhanced use of the AI-powered next-generation ordering system "AI.CO"
• Capturing new demand through food delivery service (deployed at 276 stores)
• Strong sales of beverages and ice cream due to summer heat, and capture of leisure travel demand
• Deepening relationships with franchisees and advancing "unified management" through promotion of franchise agreement renewals at the 10-year milestone of the brand conversion
• Acquisition of new customer segments at gooz through the start of face-to-face sales of in-store roasted coffee beans and expansion of gift sections

Risks

• Pressure on franchisee profit from continued increases in store operating costs such as labor, energy, and logistics costs
• Decline in visit frequency and customer numbers due to consumers' heightened cost-consciousness and savings orientation amid rising prices
• Risk of a temporary reversal of the profit growth trend, as indicated by the full-year operating profit forecast of ¥1,330 million (down 6.0% year on year)
• Risk of franchisee attrition in renewal negotiations for franchise agreements as the brand conversion reaches its 10-year milestone
• Rising product costs due to higher energy prices and raw material costs amid factors such as the situation in the Middle East
• Risk of increased procurement costs due to fluctuations in financial and capital markets and the continuation of the weak yen trend