Invester Relations

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I would 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 quarter of the fiscal year ending February 28, 2011. During this period, existing store sales continued to improve, boosted by persistent summer heat from September onward and surging demand ahead of a tobacco tax hike, despite ongoing weakness in consumer spending. Existing store sales decreased 2.6% year on year in the March-November period on a non-consolidated basis. However, they were 0.9 percentage points higher than forecast. One of our key second-half strategies has been to enhance our brand categories. Here, we delivered significant results especially in the Cherie Dolce dessert selection and the Oishii Soup & Soup Gohan (Rice in Soup) series. Moreover, we conducted a series of sales promotions in rapid succession that proved highly effective. These promotions were highlighted by extensive campaigns in October 2010 to mark the 30th anniversary of the opening of the first Circle K and Sunkus stores in Japan. We also ran TV commercials for three consecutive months from September. On the services front, we strove to increase customer convenience by phasing in many different types of electronic money issued by various JR-affiliated transportation companies, including JR East’s Suica format. Thanks to these efforts, total store sales reached \697.5 billion, to exceed these sales from the same period a year ago, on a consolidated basis. In addition to an increase in revenue from franchise stores, selling, general and administrative expenses decreased 1.6% year on year due to a Company-wide cost-cutting drive. As a result, we delivered operating income of \16.7 billion, an increase of 23.6% year on year. Please view our earnings report further details on operating results for the first three quarters of the fiscal year ending February 28, 2011.

In the third quarter, we began to see positive signs such as an improvement to the same level as last year in sales in mainstay product categories such as fast food and perishable food. While maintaining this improvement in sales, we will actively run TV commercials and conduct other sales promotions in the fourth quarter, with the view to further enhancing our sales capabilities heading into next fiscal year. In our 31st year in business next fiscal year we will also begin developing in earnest convenience stores for the next thirty years. Preliminary steps are now being taken in many different fields. We are determined to ensure that these steps lead to future grow.

We revised up our full-year forecasts, given that we delivered favorable results for the first three quarters. Our operating environment is not favorable, but we are making Company-wide efforts to improve our sales and earnings. Your continued support and understanding will remain vital to achieving our goals.