By Kosaku Narioka
Seven & i Holdings' quarterly net profit more than doubled, helped by an earnings boost from its international convenience-store business, as the 7-Eleven owner sharpened its focus on core operations amid a takeover attempt by the Canadian owner of Circle K.
The Japanese owner of 7-Eleven on Thursday said first-quarter operating profit for its overseas convenience-store business nearly doubled, supported by cost controls and an expansion of proprietary products in the U.S.
The company said that personal consumption in its North American market showed a tendency toward restraint--particularly among low-income households--due to concerns about rising prices stemming partly from tariff policies.
Seven & i's bottom line was also helped by special gains related to the sale of assets by its Japanese superstore unit.
Operating profit for its domestic convenience-store business fell, weighed by higher costs. The Japanese company attributed the cost increase partly to the installation of in-store cooking equipment as it stepped up its offerings of freshly made items such as bread and drinks.
The 7-Eleven owner is focusing on proprietary and freshly made goods as part of efforts to boost shareholder value, even as it considers a takeover offer from Canada's Alimentation Couche-Tard.
In June, Seven & i reduced its stake in its financial-services business amid a drive to focus on its core convenience-store operations.
The 7-Eleven owner said in March that it planned to list its North American convenience-store business by the end of 2026. The company also agreed to sell a group of superstores and other businesses to U.S. private-equity firm Bain Capital for $5.4 billion and said it would repurchase up to $13 billion of its shares, using proceeds from the sale of the businesses as well as from the initial public offering.
An acquisition by Couche-Tard is unlikely to be straightforward, given the antitrust and national-security issues involved. In September, the Japanese government classified Seven & i as a company that engages in businesses critical to national security.
Seven & i in September rejected an initial $39 billion buyout bid from Couche-Tard, saying the proposal underestimated the company's value. Couche-Tard later raised its offer to about $47 billion and in January submitted a revised, yen-denominated proposal at Seven & i's request.
The stock has underperformed Japan's benchmark Nikkei Stock Average this year, falling 13% year to date after a 33% rise in 2024.
The owner of 7-Eleven said Thursday that net profit for the three months ended May surged to 49.01 billion yen, equivalent to $334.9 million, from Y21.39 billion a year earlier. That beat the Y32.2 billion estimate in a poll of analysts by data provider Visible Alpha. Revenue increased 1.6% to Y2.777 trillion.
Operating profit for its overseas convenience-store business surged 94% to Y8.69 billion, while that of its domestic convenience-store business fell 11% to Y54.53 billion.
Seven & i maintained its top- and bottom-line forecasts for the fiscal year that began in March, expecting revenue to decline 10% to Y10.722 trillion and net profit to climb 47% to Y255.00 billion.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
July 10, 2025 06:05 ET (10:05 GMT)
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