Seven & i Holdings misses analyst forecasts in uncertain consumer environment
Seven & i Holdings Co., parent company of the international 7-Eleven convenience store chain, posted lower than expected fourth-quarter profits, including a drop in performance in its 7-Eleven stores in the United States.
According to the financials released by the company today, Seven & i Holdings reported that while its operating profit rose in the 12 months ending in February 2025 rose 0.7% to ¥424 billion (US$2.9 billion) it was less than what analysts had forecast, ¥459.6 billion. During the same fiscal period, the Seven & i Holdings expected sales to be ¥10.76 trillion, a 10% fall from a year earlier.
In a statement accompanying the release of its fourth-quarter and year end financials, the company wrote that “there were signs of recovery in consumer spending as employment and income conditions improved although some areas remain stagnant. This has led to a clear divergence in consumption patterns, with incomes of the young and the elderly increasing due to rising wages and the extension of the retirement age, but also an emerging awareness of the need to protect livelihoods, especially among those responsible for child rearing.”
It said that in North America, the economy remained robust overall thanks to the consumption of high-income earners, despite a persistently inflationary, elevated interest rate and deteriorating employment environment.
Because of this, consumers were taking a more “prudent approach to consumption, in particular among middle- and low-income earners. In this environment, the Seven & i Group aims to be ‘a world-class retail group centered around its food that leads retail innovation through global growth strategies centered on the 7-Eleven business and proactive utilization of technology.’”
Seven & i Holdings reported that its overseas convenience store operations revenues came in at ¥9,170,782 million (107.7% year on year), and operating income amounted to ¥216,248 million (71.7% year on year).
READ: Seven & i says Couche-Tard understates antitrust risk in takeover proposal
“In North America, 7-Eleven, Inc. (SEI) is pursuing sustained business growth and enhanced capital efficiency in the context of a tough consumer spending environment, particularly among lower-and middle-income earners whose desire to save on food and other necessities has become even stronger,” the company reported. “Also, there is a growing polarization of consumption due to a decline in labor incomes, which is a result of challenging employment conditions, as well as inflationary pressures and high interest rates. To this end, SEI has promoted four measures: Enhance Proprietary Products (including value offers), Accelerate Digital & Delivery, Improve Efficiencies and Cost leadership, and Grow and Enhance Store Network.”
In regard to the ongoing takeover moves by Alimentation Couche-Tard, parent company of Circle K, Seven & i Holdings added no comment, only pointing its earlier Plan to Unlock Shareholder Value Through Leadership Changes and Transformational Capital and Business Initiatives that is released on March 6th of this year.
“These initiatives involve a series of measures designed to refine our management system, capital structure, and business operations. The primary objective of these measures is to further streamline our focus on the convenience store business, with a commitment to enhancing value for all shareholders. We will also continue to implement the business reform measures that have been announced to date and are currently underway.”
