Japanese c-store retailer Lawson Inc has reported higher first-quarter profits despite lower sales.

Lawson booked a 14.8% increase in net income to JPY7.19bn (US$71.1m) for the three months to the end of May. The retailer ran up lower exceptional charges this year. Operating income was up 2.5% at JPY14.3bn.

Sales dropped 1.6% to JPY119.5bn. Like-for-like sales were down 2.4% year-on-year.

CEO Takeshi Niinami said bad weather, a shift in promotional spending to the second quarter and a fall in cigarette sales hit sales.

However, Niinami said Lawson sought to push “value-added” products such as its Deliclous Local Dishes range, which mainly uses local ingredients, and its in-store prepared food. “They contributed to a 0.5 percentage point improvement in gross profit margin in the first quarter compared to the previous year.”

At the end of the quarter, Lawson had 11,095 stores in Japan and 461 overseas, including its first in Thailand, which opened in March, through a venture with local operator The Saha Pathanapibul Group.