I'm Egawa, in charge of finance and business management. Thank you very much for joining today's Aeon Earnings Briefing. I'd like to provide an overview of our financial results for the first quarter of the fiscal year, ending on February 28, 2025. Consolidated operating revenue for the first quarter reached a record high of JPY 2,449.2 billion. Operating profit was JPY 47.7 billion, down JPY 3.6 billion from the same period last year, and ordinary profit was JPY 45.3 billion, decreasing JPY 2.7 billion. Net income attributable to owners of the parent company's shareholder this quarter was JPY 5.1 billion, a decrease of JPY 12.6 billion from the same period last year. Operating profit and ordinary profit were slightly below the expected levels. Operating revenues reached a record high, and net income for the quarter was generally consistent with the forecast. The significant drop in net income was expected and largely in line with the expectation, given the lack of major one-time profit items compared to the previous year, which included special factors. Each graph shows changes over the past six years. Operating revenue made a solid start toward our fiscal year goal of JPY 10 trillion. Operating and ordinary profits were at the second highest, following last year's record high. In terms of operating revenue, all reporting segments, except for the services and specialty store business, reported higher revenues. Regarding operating profit, the GMS and supermarket businesses did not see the expected growth in gross profit, leading to a decrease from the previous year. In the health and wellness business, increased SG&A expenses associated with efforts to enhance the loyalty point program resulted in a decrease in profit. On the other hand, the financial services business showing signs of improvement in Japan, the shopping center development business, the international business, the services and specialty store business, and the discount store business benefited greatly from the renovation of existing malls and an increase of visitors to Japan all posted higher profits. I will provide details on the status of each segment on page five of the slides and the following pages. Segment income in the GMS business for the quarter was at a loss of JPY 3.4 billion, reflecting declines in profits at Aeon Retail, as well as at Aeon Hokkaido, Aeon Kyushu, and other major companies. With persistent inflation and prolonged negative real wages, consumer sentiment is declining, and customers are becoming more frugal. During the quarter, we intensified sales promotions to secure market share, but our focus on price slightly impacted sales and gross profit, despite surpassing the previous year's performance at existing stores. Compared to last year, we believe that this quarter experienced a substantial reactionary decrease following last year's increase in revenge spending due to the full lifting of COVID-19 restrictions, as well as the stimulative effect of My Number Points on consumption. In the second quarter, while national events such as summer holidays and bonus payouts naturally boost consumer spending, we'll implement a turnaround strategy by developing our product and pricing strategies. Aeon Retail, the mainstay of the GMS business, focused on securing market share throughout the quarter by enhancing sales promotions to boost consumer confidence, which had declined. Although business performance was strong in March, sales began to show some signs of slowing down in April and May. In addition, there was a significant reactionary impact on products in this area, such as apparel for going out, home furnishing for preparing for guests, and high-end foods for special occasions, which had seen increased sales last year due to pent-up demand, leaving room for improvement in gross profit margins. As a result, although SG&A expenses were managed as expected, gross profit was insufficient to offset the increase in costs, leading to an operating loss of JPY 3.2 billion, down JPY 1.4 billion from the same period last year. As for the current situation, both sales and the number of customers have been on a recovery trend since the latter half of May. As announced in the monthly report for June on July tenth, same-store sales largely increased to 107.0% of last year's results, driven by strong sales of summer apparel and air-conditioned home appliances, owing to the enhancement of lifestyle support programs aimed at stimulating consumption. We believe that our challenge from the second quarter onward is to increase gross profit margins. We'll strive to secure market share by raising the top line through product offerings and pricing strategies, while implementing MD reforms for home furnishing with a high markup ratio, further expanding sales of TOPVALU, and improving the accuracy of purchase orders to stock in-demand products. As for the ongoing profit structure reforms, costs and inventories continue to be under control, and further cost reductions have been achieved. In digital initiatives, e-commerce sales are growing. In addition, the introduction of AI tools is spreading to all stores and is proving effective in enhancing efficiency. Segment income for the supermarket business decreased by JPY 2.6 billion from the previous year to JPY 3.6 billion. Similar to the GMS business, sales were strong in March, showed a slight decline in April and May, and recovered in June. With a growing frugal mindset, the number of items purchased per customer continued to decline, resulting in shortfalls in sales and gross profit. However, since the number of customers is trending upward compared to the previous year, we believe that an increase in average basket size will be key to improving performance. Among individual companies in the group, Maxvalu Tokai and My Basket, which have been successful in attracting customers by increasing their private brand ratios, including TOPVALU, posted higher profits. At these two companies, the increase in gross profit absorbed the rise in labor costs and other SG&A expenses. From the second quarter onward, in addition to TOPVALU, which serves as the group's common infrastructure, we'll focus on expanding sales and improving gross profit margins by enhancing the sales of regional private brand products developed by regional supermarket companies. Furthermore, we'll mitigate the impact of higher labor and other costs by improving man-hour productivity through the promotion of digital transformation. In the discount store business, segment income increased by JPY 0.3 billion - JPY 1.9 billion due to lower SG&A expenses, resulting from the establishment of the discount store format with low-cost operations. In the face of increasing price competition across various sectors, including supermarkets and drugstores, we are addressing customer demands for savings by bolstering our price competitiveness, particularly in fresh food products. The development of private brand products, primarily exclusive to the discount store business, has reinforced the open price system, allowing retailers to set prices while also enhancing the price appeal of low unit costs due to larger volumes. Moreover, we aim to accelerate further growth by leveraging the scale benefits from the business integration with Maxvalu Minami Tohoku and utilizing the diverse talent acquired through this integration to develop new formats and establish a robust store expansion framework. We anticipate that the importance of the discount store business will continue to grow even further in the future as customers' need to save money increases with continued inflation. The high investment efficiency of the discount store business makes it a top priority for our group. We'll work together to strengthen our store network while closely analyzing the profitability of each store, aiming to further enhance the overall profitability of the discount store business. In the first quarter, the relatively low pollen count led to a decrease in demand for allergy relief products, resulting in reduced sales of over-the-counter drugs and masks. In the Welcia Group, customer traffic was flat due to insufficient recognition and penetration of the new point service, as well as a decrease in purchases of related products following the discontinuation of cigarette sales. Consequently, gross profit could not offset the growth in SG&A expenses, and segment income decreased by JPY 1.8 billion from the same period last year to JPY 5.3 billion. Moving forward, we'll work to increase gross profit by promoting awareness and penetration of the new point service to restore customer traffic, offering food products and TOPVALU, which are frequently purchased and focusing on capturing demand from visitors to Japan. With regard to the capital and business alliance with Tsuruha Holdings, Aeon and Welcia Holdings announced in February that three companies share the ideal image of the drugstore alliance and are in discussions toward integration. Segment income for the first quarter was JPY 14.9 billion, up JPY 5.4 billion from the previous year, while it had decreased in both the first quarter and for the full year in the previous fiscal year. The increase was particularly strong in Japan, where revenues rose thanks to ongoing growth in card revenues and gains from the sale of securities and other financial income. Despite the increase in receivable balance having led to higher bad debt-related expenses, effective control of promotional spending with a focus on cost-effectiveness has contributed to increased profits. Overseas, Greater China achieved its highest revenue ever due to an increase in the receivable balance. However, profits declined as the number of sudden bankruptcies among customers remained high. In the Mekong region, profit decreased due to a lower receivable balance amid a deteriorating economic environment, although the growth in bad debt-related expenses has slowed down. In the Malay region, personal loans grew owing to improved convenience, such as the entire process being completed digitally and the shortening of screening time. Additionally, the implementation of government subsidies for low-income individuals has improved the debt recovery situation, helping to absorb the increased costs associated with the launch of digital banking in Malaysia and contributing to increased profits, thereby driving overseas operating income. While bad debt-related expenses increased in all areas, especially in Hong Kong and Thailand, where the impact is particularly large, we'll continue to monitor the balance between the buildup of receivables and credit management to control overall expenses. In Aeon Mall, both operating revenue and operating profit reached record highs. For the shopping center development business, operating profit this quarter recovered to JPY 15.7 billion, up JPY 1.7 billion from the previous year and surpassing the pre-COVID-19 results of fiscal year 2019. In Japan, specialty store sales at existing malls rose to 103.1% of the previous year's level, driven by floor space expansion, renovation of existing malls, and the effects of increasing visitors to Japan, resulting in increased revenue. Operating profit also achieved double-digit growth. In terms of costs, the transition to market-linked electricity pricing and the introduction of energy-saving and power-saving devices have led to reductions in electricity costs, significantly contributing to increased profits. Overseas, profits declined in China due to the loss of income from malls closed in the previous fiscal year. However, profits increased in Vietnam, where specialty store sales are growing, and in Indonesia, where reductions in vacant floor space have improved. This led to a record high for overseas operations as a whole. In this fiscal year, we are proactively renovating existing malls to align with the local market conditions and will focus on enhancing profitability. In the Services and Specialty Store business, Aeon Fantasy saw profit growth as domestic same-store sales and the effect of new strategic small stores absorbed the increase in SG&A expenses. COGS, which reduced purchase costs and improved its gross profit margin, also contributed to higher profits, resulting in segment income of JPY 5.9 billion, an increase of JPY 0.4 billion from the same period last year. In Aeon Fantasy, the domestic business remains strong, with the proactive launch of new business categories and strategic small stores. In overseas markets, net sales reached a record high for the first quarter for the third consecutive year, thanks to strong performance in Malaysia and the Philippines. Aeon Entertainment saw a reactionary decline in profit in the current quarter as the number of moviegoers fell to 88% of the previous year, when it had record sales due to the release of blockbuster films. In the second quarter, we anticipate sales to be at the same level as the previous year, as films expected to attract large audiences are set to be released. Additionally, live viewings of music events and animation-related events continue to perform well, attracting a loyal fan base. We'll maintain these efforts, which allow us to secure profits that are not reliant on movie attendance. In ASEAN, while profits declined this quarter, mainly due to a slump in non-food products caused by the economic downturn, Aeon Malaysia achieved a significant increase in profits. This was driven by higher sales in its retail and mall businesses, along with strict cost control, resulting in a segment profit of JPY 3.9 billion, up JPY 700 million from the previous year. In Aeon Malaysia, net sales surpassed the previous year's results due to strong sales during both Chinese New Year and Ramadan. The increase in sales was driven by growth in food and apparel, which were imported and procured from producers. Additionally, malls and stores in the southern Johor region contributed to increased profits due to an influx of customers from Singapore, prompted by the price surge. Aeon Vietnam posted increases in both sales and profit amid a difficult economic environment and weak consumer sentiment as a result of emphasizing product exclusivity and differentiating itself from competitors in apparel, home furnishing, private brand products, and delicatessen products. In China, the overall economy was affected by the recession, but there were large differences by region. Guangdong, South China, Qingdao, and Hubei posted higher profits. In contrast, overall profits declined in Hong Kong due to a slump in inbound travel from mainland China and the ongoing outflow of consumption back to the mainland. In Hubei, the Wuhan Jiangxia store, which opened last November, continued to perform well. Tenant income also improved, and in East China, the Hangzhou Qiantang store, the first new store in five years, performed strongly. In June, in order to recover sales, we stepped up our sales promotion measures across the Group, such as the JPY 40,000 flat-set special offer, in line with the amount of a tax reduction and the Aeon Card installment fee waiver campaign. This resulted in significant growth in same-store sales in the GMS, Discount Store, Shopping Center Development, and Services and Specialty Store business.... In the second quarter, we see the bonus payment, the Paris Olympics, and the Bon holiday period, with its nine consecutive days off as major commercial opportunities, and we'll continue to strengthen group-wide sales promotions to expand sales. As for other operations, Craft Delica Funabashi, a new concept process center that designs from product development to sales by a team of food experts, produced using professional chefs' cooking techniques, has been in operation since June sixth, 2024. With this new facility, we aim to supply high-quality products to the 1,500 group stores in the Tokyo metropolitan area, including Aeon Retail and My Basket, as well as to improve gross profit margins and store operation efficiency. I'll explain the assumptions behind the consolidated performance forecast for the current fiscal year and the actual results of the first quarter. Our assumptions for the full year forecast are a year-on-year increase of JPY 10.0 billion in utilities, JPY 4.0 billion in logistics, and JPY 65.0 billion in labor costs. In the first quarter, utilities expenses were reduced by JPY 7.1 billion from the previous year, exceeding our projected reduction. The electricity cost reduction is due to energy-saving and energy-creating efforts, as well as the effect of the gradual switchover to market-linked contracts in each area in Japan since last year. Due to the government's announcement in June that measures to mitigate sharp fluctuations will be resumed from August to October, we currently estimate that this will add approximately JPY 3 billion in curtailment effects compared to our initial forecast. Logistics expenses rose by JPY 0.9 billion compared to the same period last year. From the second quarter onward, we'll implement a new store delivery system that integrates purchasing and sales operations into a single unit, aiming to further enhance logistics efficiency. This will reduce the number of vehicles needed, helping to lower logistics costs and lessen the workload for drivers. Regarding labor expenses, excluding the impact of newly consolidated subsidiaries, they increased by approximately JPY 12.5 billion due to wage hikes, but are largely under control as anticipated. Regarding the forecast for this fiscal year, there is no change from the announcement at the beginning of the quarter. In the first quarter, while segment profit decreased, as noted at the beginning of this report, operating revenue and net income attributable to shareholders of the parent company were generally in line with our expectations. From the second quarter onward, we'll continue to focus on improving the top line and controlling costs by leveraging the scale of our business. The entire company will work collaboratively to ensure the achievement of the performance forecast. Thank you for your attention. We are now open to your questions. Could you provide details on the shortfall in operating profit? Specifically, we would like to understand the extent of the shortfall. Was the profit reduced from a forecasted increase, or was the original forecast not very strong, resulting in a minor shortfall? This is Egawa speaking. Operating profit decreased by JPY 3.6 billion compared to last year. Additionally, since the annual budget was set at a higher level, the decrease from the forecast amounts to JPY 3.6 billion plus alpha. What business segments fell short of projections and which performed well? This is Egawa speaking. The segments that saw an upswing were the financial services and shopping center development business. The financial services business performed well due to an increase in the balance of domestic receivables. The shopping center development business was up due to Aeon Mall's record-high operating profit. On the downside, the GMS supermarket and health and wellness business did not achieve the expected operating profit and performance. The delay in earnings progress seems limited, so I believe the negative amounts you mentioned can be fully recovered during key retail periods such as the summer break, Bon holiday season, and year-end and New Year's holidays. I guess that the company has been keeping up with consumer demand with strong momentum in June that we actually saw. In response to the sluggish sales in April and May, the company will likely continue its sales promotion in June and July without easing up. Then, what changes will be made to better meet consumer needs? Low prices alone will not be sufficient, nor will added value alone. Can you elaborate on how the GMS and the supermarket business promote consumption and ensure its continuity? This is Egawa speaking. In March, the numbers were favorable due to the trend from the same period last year, but the numbers declined continuously in April and May. Despite our efforts to expand market share through pricing strategies and strengthen sales promotions using loyalty points, we believe the consumer's frugal mindset has impacted sales and gross profit margins. From July onward, we're promoting various events and expanding sales of TOPVALU products, which have high gross profit margins. Internally, we're also discussing ways to produce lower-cost products, reduce procurement costs, and minimize expenses. The focus is on leveraging our scale, especially in the expanding lower tier, while addressing both upper and lower tiers of consumption. For cost reduction, it's important to utilize functional companies, and we aim to compensate for the first quarter's delay by focusing on this area in the second quarter. Concerning the failure to meet the operating profit targets for the GMS and the supermarket businesses, the prioritization of promotions over margins led to sluggish sales growth in the latter half of the first quarter. Delving deeper, was the need for lower prices stronger than expected, impacting the margin mix? Or was the plan to boost sales through enhanced promotions unsuccessful in achieving the anticipated growth? This is Shikata speaking. In the first quarter, the consumption environment continued to cool down due to inflation and price hikes. At the last financial announcement, there were words from Yoshida, our CEO, that consumers were frustrated with inflation and price hikes. In the first quarter, consumer spending sharply declined. Food, our main sales category, has increased by about 5%-6% in CPI. The core CPI is relatively stable, around 2%-2.3%, but food prices are going up. Rising food prices increase the Engel's coefficient, and increased energy costs burdened household budgets, leading to significant fluctuations in spending per special occasions and daily life. The challenge of striking a balance became apparent. Sales recovered during promotions but dropped when they were absent. After price policy adjustments failed and sales fell in April and May, we changed our strategy in June and stabilized the number of customers with fixed-price tax breaks and month-end sales. In the retail industry, maintaining customer numbers is crucial for improving profitability. We aim for customers to make a habit of shopping at Aeon Group stores. Our strategy of prioritizing customer numbers over gross profit has been successful, with customer counts at or above last year's levels. In the second quarter, the challenge is to link market share to profit. We aim to enhance profitability throughout the year by strengthening our product lineup for the Bon holiday period and bonus season. The weak yen is expected to cause food manufacturers to raise prices in October, leading to higher purchase costs on your end. While sales and gross profit were secured in June, there are concerns about how long this will continue. If things go wrong, gross profits may decline, and the top line, along with customer numbers, may not meet expectations. In fact, some companies have suffered such disappointing results. It's difficult to assert that this won't happen to your company. We're concerned about margin control and expenses in the second half and beyond. You mentioned that expenses are currently lower than planned. Regarding margin control, will you temporarily compress margins and then improve them in the second half of the year? This is Shikata speaking. Cost increases for the second half of the year are within our expectations. Strengthening private brand products is particularly important. We are currently preparing new products, and our strategy is to increase the number of customers while maintaining gross profit by balancing red TOPVALU and yellow Best Price. We'll attract customers through price-sensitive private brand products and, in the latter half of the year, renew the red TOPVALU to improve gross profit. Given the disparity in the private brand composition within the group's GMS and supermarkets, raising this ratio is another crucial strategy for the second half of the year. Aeon Retail Company Limited's gross profit margin is flat year-on-year. While some companies saw a decrease in their gross profit margins in the first quarter, it seems that Aeon has managed to maintain its margin. Is the gross profit margin lower than planned due to the intensified point sales promotions? This is Egawa speaking. Aeon Retail did not increase its gross profit margin as much as anticipated. With costs expected to rise this fiscal year, our basic strategy is to raise the gross profit margin. We face challenges in achieving our annual target of a 0.5 percentage point increase in the first quarter. While point-of-sale promotions are crucial for boosting sales, they are challenging to manage as they directly impact the gross profit margin. We aim to attract customers and improve the gross profit margin by consistently implementing TOPVALU sales promotions and reducing costs. From the second quarter onward, will the main focus be on improving the product mix to ensure gross profits do not decline in both amount and rate?... while also strengthening the response to low prices? This is Egawa speaking. Our policy is not to lower gross profit, but to raise it. We'll employ various methods to improve gross profit, such as enhancing order accuracy and refraining from changing sales prices to sell out. Even under challenging circumstances, we aim to increase gross profit margins while promoting the use of functional companies that benefit from economies of scale. Could you tell us about the progress of SG&A expenses in the first quarter compared to the plan? Operating revenue increased, but I also noticed that SG&A expenses grew considerably on a consolidated basis. Although the impact of the wage increase was as expected, I feel that the increase in personnel expenses and sales promotion expenses is significant. General expenses have also increased. How does this compare to the plan? This is Egawa speaking. Major costs, such as labor and electricity, are under control as expected. The overall increase in costs is within our expectations, and we do not believe immediate action is necessary currently. We'll monitor costs closely as we proceed with the closing of accounts for the current fiscal year and firmly control those areas that can be managed. In the adjustment section of this segment information, is the JPY 2.8 billion decrease in operating profit from the previous year due to the return of profits from functional companies to the operating companies? Or is the decrease primarily due to the higher-than-expected increase in the cost of raw materials? This is Egawa speaking. In this quarter, the operating profit recorded in the adjustment section decreased because the profits of functional companies were returned to the operating companies. For the major companies included in the adjustment section, we expect a decrease of about JPY 8 billion for the full year, as the first quarter comparison showed a decrease of about JPY 2 billion. I'm concerned about TOPVALU strategy for the second half of the year. In the past, when you launched a strategy to expand TOPVALU, an unusually large number of TOPVALU products, including some unattractive ones, flooded store shelves and negatively impacted your sales and profits. Since then, the company has changed its policy, reforming and abolishing some products to strengthen the management of its brand lines. However, there is still concern about a repeat of past failures. This is Shikata speaking. We're developing TOPVALU with careful consideration of our past experiences. There was a period when almost everything became TOPVALU. We must deeply reflect on whether we were truly creating valuable products. In response to customer feedback that the distinction between yellow Best Price and red TOPVALU was unclear, we've changed our development direction to clarify the value each brand offers. With many events scheduled for the second half of the year, we're developing occasion-type products tailored to specific events. For example, during the Christmas season, we'll introduce oven-ready products that provide the value of enjoying a full-fledged Christmas party at home. For special occasions, we offer red TOPVALU, which is our mainstream. For daily shopping, we offer yellow Best Price products that emphasize price appeals. In fresh foods, we are also promoting TOPVALU GreenEye, which is an organic product series in the TOPVALU family, and the sales are growing. We aim to make the presence of TOPVALU a clear value for our customers.