Seven & i Holdings looking to grow its North American convenience business
Seven & i Holdings, parent company to Irving, Texas-based 7-Eleven Inc., with more than 15,000 stores in the United States, Canada and Mexico, announced its results for the fiscal year ended in February, reporting a 20% drop in net profit from a year earlier to 224.6 billion yen ($1.48 billion) on sales of 11.4 trillion yen, down 2.9%.
As a result of this, the Seven & I Holdings announced an “Update to the Medium-Term
Management Plan and the Results of the Group Strategy Re-evaluation” that was first proposed on March 9, 2023, and established the Strategy Committee composed of all the Group’s Independent Outside Directors, that was to focus on “maximizing corporate value and thus shareholder value in the medium- to long-term.”
In a letter published to coincide with the formal presentation of the Consolidated Financial Results for the Fiscal Year Ended February 29, 2024, the committee recommended three broad strategies:
formulation of concrete action plans to accelerate growth; changes to the Group structure that will enhance our long-term growth and enterprise value; and enhanced investor engagement to share our concrete strategies and plans, growth pathways and progress in execution.
READ: 7-Eleven International closes 7-Eleven Australia acquisition
One key area of investment is going to be North America. In the letter, it states that: “The North American CVS (SEI) business is and will continue to be a key driver of the Group’s growth. SEI has demonstrated its ability to integrate acquired assets and accelerate their sales and profitability, most recently with the acquisition of Speedway.”
Accordingly, the company plans to increase the pace of acquisition in North America and in a manner that “would be accretive to sales, profit and ROIC.” As part of the strategy, the company also plans to focus on expanding the variety and quality of its food offerings, and putting a greater focus on developing in-store food preparation capabilities. “We recommend the board consider
investing in food production capability whether owned, in-store or third party in order to accelerate this opportunity.”
Ryuichi Isaka, president and representative director at Seven & i Holdings Co., Ltd., told analysts during the presentation of the fiscal results spoke about the company’s plans and reiterated that it “plans to grow to become a world-class retail group centered around its “food.” I also mentioned how we intend to achieve this, through balancing the concentration of strategic investment toward CVS operations and shareholder returns, with a commitment to a total payout ratio of over 50%, which is our Group’s capital re-allocation policy . . .Going forward, the Seven & i Group will continue the execution of sustained efforts to further increase its cash generation capabilities - with a special focus on CVS operations - and the optimization of its business portfolio.”
