7-Eleven Owner Seven & I's Profit Grows 43% on Founding Family's Donation
Stock Chart for Seven & I Holdings Co Ltd (3382)
Seven & I Holdings Co., owner of the 7-Eleven convenience-store brand, boosted first-half profit 43 percent after its founding family donated 7 billion yen ($85 million) to the company and one-time charges fell.
The cash donated by the Ito family to Japan’s biggest retailer will be used to build a training center, Nobuyuki Miyaji, a company spokesman, said at a briefing in Tokyo today. Seven & I also joins smaller rival Aeon Co. in reporting earnings that were boosted by Japan’s hottest summer in more than a century.
Seven & I had one-time charges, including losses from asset sales, of 12.7 billion yen in the first half, compared with 17.7 billion yen a year earlier, it said in the statement. The Tokyo- based retailer is forecasting its first profit increase in four years as it closes unprofitable stores and sells more of its own brand of groceries and clothes.
Revenue increased 0.5 percent to 2.56 trillion yen in the first half. Japan’s hottest summer on record helped boost profits at Seven & I’s convenience stores, Chief Operating Officer Noritoshi Murata told reporters today in Tokyo. The company’s Seven-Eleven Japan unit boosted operating profit 4 percent in the six-month period.
Aeon said yesterday increasing demand for drinks and underwear due to the heat wave helped sales of products under its Topvalu brand grow 1.2 percent in the first half.
Seven & I rose 3.9 percent to close at 2,051 yen in Tokyo trading before the earnings announcement. The benchmark Nikkei 225 Stock Average dropped 0.1 percent.
The company reiterated its full-year profit forecast of 100 billion yen for the period ending February 2011, more than double the net income earned last year, when it took a charge of about 40 billion yen for costs including store closures and asset writedowns at its department-store division.
Analysts forecast full-year profit of 102.2 billion yen and sales of 5.14 trillion yen, according to the average of 13 estimates compiled by Bloomberg.
Seven & I, which generates 70 percent of revenue in Japan, cut its full-year sales forecast 1.2 percent. Japan’s retail sales climbed 4.3 percent in August, less than economists had forecast, government data released Sept. 30 showed. Wages in Japan also stagnated in August, failing to rise for the first time in six months, the government said.
The company’s U.S. convenience-store chain unit is in talks to acquire Casey’s General Stores Inc., which has more than 1,500 outlets throughout the U.S. Midwest, Casey’s said Sept. 9. Alimentation Couche-Tard Inc. said Sept. 30 it will drop its $38.50-a-share bid for Casey’s after 7-Eleven offered $40 a share.
The outcome of the talks may not be known for “a while,” Murata told reporters today in Tokyo.
Seven & I opened its first outlet in Japan in 1974 and had 12,907 convenience stores in the nation as of Aug. 31.
To contact the editor responsible for this story: Frank Longid at firstname.lastname@example.org
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.