Seven & I Holdings, the powerhouse behind the ubiquitous 7-Eleven stores, has recently disclosed a significant 24% decline in its quarterly operating profit, a figure that fell short of market expectations. The company, which is a staple in urban landscapes across Japan, recorded profits of 128 billion yen (approximately $809.41 million) for the quarter spanning September to November. This marks a downturn from the 169 billion yen reported in the same quarter of the previous year.
Analysts had anticipated a more robust performance, with consensus estimates predicting a profit of around $872 million, according to a survey conducted by LSEG involving seven financial experts.
This disappointing outcome has intensified the scrutiny on Seven & I, challenging the conglomerate to enhance its corporate value amidst the backdrop of a substantial $47-billion takeover bid from Canadian firm Alimentation Couche-Tard (ACT). In response, Seven & I has accelerated its strategy to concentrate on its primary convenience store operations by divesting from various non-essential assets, including a number of supermarket chains and specialty stores.
The decline in operating profit was particularly noticeable in both its domestic Japanese market and its North American operations, which represent the company’s largest revenue streams. Rising inflation has dampened consumer expenditure significantly, affecting sales and profitability across these regions.
Despite these challenges, Seven & I has maintained its profit forecast for the fiscal year ending in February at $2.5 billion. This projection is a downward revision from the previously estimated $3.4 billion, primarily due to the ongoing impact of inflation on consumer spending habits in North America, which has hit the convenience store segment particularly hard.
For the latest retailer news and information, check out the ServoPro website or to speak to us about how we can help your business contact us.