I'd like to take this opportunity to thank all shareholders and other investors for their continued interest in and support for Circle K Sunkus.
Today, December 29, we announced our earnings for the first three quarters of fiscal 2009, the year ending February 28, 2009.
During this period, Circle K Sunkus posted strong sales growth, resulting in higher operating revenue and earnings in year-on-year terms. The main contributors were sharply higher tobacco sales following the nationwide introduction of cigarette vending machines with taspo card (age verifying IC card) systems, in addition to firm growth in perishable food sales centered on original desserts and baked goods. Combined with improved ast food sales, which were boosted by the new original pasta brand rubetta, existing store sales increased 3.8% year on year on a non-consolidated basis. Total store sales rose ¥27,453 million to ¥715,323 million on a consolidated basis. Meanwhile, Circle K Sunkus posted average daily sales at new stores of ¥467,000, an improvement of ¥51,000 year on year, despite opening fewer stores than planned during the period. This improvement was due in large part to the opening of new stores with an emphasis on quality. Consolidated total operating revenue rose ¥6,465 million year on year mainly due to higher franchise commissions from franchised stores. Supported by this revenue growth, as well as an ¥804 million drop in selling, general and administrative expenses, consolidated operating income rose ¥3,094 million year on year to ¥20,019 million. Recurring profit and net income were both higher than forecast and the previous year. Please view our earnings report for further details on third-quarter operating results.
During the period, Circle K Sunkus saw customer footfall increase on the back of the introduction of taspo card systems, with customer footfall increasing 3.4% year on year during. We have taken a range of bold initiatives so as to convert this influx of customers into opportunities for growth, as we put our key Circle K Sunkus management theme of "Change" into action. During the third quarter, we launched the new original pasta brand rubetta in a bid to reinforce our mainstay products. With strong support from customers, the Company has recorded steady growth in pasta sales. Going forward, we aim to develop rubetta into a hallmark Circle K Sunkus brand by offering an even more varied and great-tasting pasta lineup. In other news, we have begun installing fryers in stores sooner than planned, in order to generate new sales from fiscal 2010 onward, when we expect the boost from taspo to taper off. Meanwhile, installation of KARUWAZA STATION in-store multimedia terminals, which are designed to provide advanced services, is now fully under way. Looking ahead, we will work to enhance KARUWAZA STATION multimedia content so as to raise the quality of our in-store services. In November 2008, we unified franchise agreements for new stores. Two of my goals when I was appointed president were to develop a hallmark brand and unify franchise agreements. I feel that our efforts in these areas are gradually bearing fruit.
Circle K Sunkus expects to face an increasingly challenging business environment, defined by even weaker consumer spending due to the ongoing worldwide recession and falling employment and personal incomes. In this difficult environment, Circle K Sunkus remains committed to improving business performance. Without fearing change, we will maintain a positive stance and a willingness to tackle challenges as we seek out new business opportunities.
The continued support and understanding of all our shareholders and other investors will be as vital as ever.
December 29, 2008
Motohiko Nakamura, President