As we explained in the recent earnings announcement, we are seeing unexpected positive progress compared to our initial projections.

  NEN’s situations with Walmart (please refer to Q. What are the latest trends in your North American operations?)

・The termination of some Walmart store contracts had progressed as planned prior to the M&A.

・Meanwhile, as the SWAP initiative led to significant performance improvements, NEN proactively reached out to Walmart for business development.

As a result, new store openings (seven stores) were realized with Walmart.

・A significant achievement is that these are lease agreements rather than the traditional revenue-share format.

　－A lease agreement format is a contract that secures a relatively large space and involves paying a fixed rent.

　－A revenue-share format primarily involves rent payments based on a percentage of sales, typically for smaller spaces like entrances of stores.

　－Considering the larger store area compared to the traditional revenue-share format, and the fixed-cost-like expenses that occur consistently regardless of store size, the upside is high.

・We plan to continuously introduce various Japanese anime IP prizes, including Sanrio and Godzilla, to capitalize on this opportunity.

　－If the results are positive, it could lead to further store expansion within other Walmart stores.

・New store openings at Walmart are happening for the first time in seven years, and these store openings at Walmart under lease agreements are groundbreaking cases, marking a first since our establishment.

The revenue increase achieved through SWAP has become a strong selling point to key business partners, expanding opportunities for new store openings in diverse locations, not just with Walmart.