JAPAN: Seven & I Reports Weak Q1 Figures

Seven & I Holdings has reported a weak set of results for its fiscal first quarter, hurt by currency fluctuations and investment on its omnichannel offer.

For the three months to 31 May, operating profit edged down 0.5% to 81.4bn yen, while net profit was up just 2% to 43.1bn yen, and sales grew by 0.6% to 2.56trn yen.  The group said it was hurt by lower fuel prices at its 7-Eleven stores in the US, as well as the strength of the yen, which hurt international results.

Sales at its overall convenience store operations grew by 3.8% to 606bn yen, sales at its supermarket banners edged up 0.4% to 516.7bn yen, its department stores recorded a 4% increase to 212.6bn yen, and its fledgling foodservice operations saw their sales grow by 1.6% to 21bn yen.

The core Seven-Eleven Japan unit saw sales grow by just 0.4% in the quarter, on like-for-like growth of 3.5%, mostly fuelled by demand for fresh food.  It was also helped by a 1.7% increase in customer traffic and 1.8% increase in the average ticket spend.  The Ito-Yokado banner also reported solid growth, with strong demand for household goods offsetting nearly flat growth in food and apparel, but the York-Benimaru banner once again reported a drop in sales.

NAM Implications:
  • The strengthening of the Yen is hopefully a temporary anomaly… ( a puzzle even to local analysts)
  • …allowing Seven & I to build on the strengths of the core  Seven-Eleven Japan…