Seven & i Holdings, the owner of 7-Eleven and other retail stores, has announced a decline in its first-half net profit, primarily attributed to weaknesses in its overseas 7-Eleven convenience stores and losses incurred from the sale of its department-store business.
Decrease in Net Profit
The net profit for the six months ended August fell by 41% from the previous year to 80.23 billion yen ($537.8 million), according to the company’s statement on Thursday.
Special Losses from Department-Store Business Sale
Seven & i Holdings recorded special losses amounting to 130.32 billion yen following the sale of its Sogo & Seibu department-store business to Fortress Investment Group.
Performance of Convenience Stores
Operating profit for the company’s overseas convenience-store business during the first half declined by 2.4% compared to the previous year, amounting to 112.83 billion yen. On the other hand, the domestic convenience-store business experienced an increase of 9.3% in operating profit, reaching 138.50 billion yen.
Despite the drop in net profit, Seven & i Holdings maintains its projection that net profit will decrease by 18% to 230.00 billion yen for the fiscal year ending in February 2024. Moreover, the company anticipates a 3.2% decline in revenue, totaling 11.432 trillion yen.
The second-quarter net profit was reported at 38.05 billion yen, lower than the first quarter’s net profit of 42.18 billion yen, as calculated by The Wall Street Journal. This figure fell short of the estimated 50.91 billion yen based on a poll of analysts conducted by FactSet.
Overall Revenue Decrease
First-half revenue showed a decrease of 1.8% compared to the previous year, amounting to 5.547 trillion yen.