By Kosaku Narioka


Seven & i Holdings reported a drop in first-quarter net profit as its overseas convenience-store business deteriorated sharply, partly due to higher costs of products and labor in the U.S.

The Japanese owner of 7-Eleven and other retail stores said Thursday that net profit fell 49% from a year earlier to 21.39 billion yen ($132.2 million) for the three months ended May 31. That missed the estimate of Y41.73 billion in a poll of analysts by data provider Visible Alpha.

Revenue increased 3.2% to Y2.735 trillion.

Operating profit for its overseas convenience-store business fell 79% to Y4.47 billion. At its key North American operations, same-store sales dropped and profit margin deteriorated due to higher costs of products, labor, rents and other expenses. Seven & i said it is trying to boost sales by offering affordable private-label products and delivery services.

Operating profit for its domestic convenience-store business declined 4.4% to Y61.25 billion, and that for its supermarket business dropped 35% to Y2.15 billion.

Seven & i left its earnings forecasts unchanged for the year ending February 2025. It continues to expect net profit to climb 30% to Y293.00 billion and revenue to decline 2.0% to Y11.246 trillion.

Seven & i has been taking steps to focus on its convenience-store operations and restructure other businesses.

The 7-Eleven owner in April acquired most of U.S. fuel distributor Sunoco's convenience-store and gasoline retail businesses for $950 million in a bid to pursue growth in the North American market.

The company is considering an initial public offering for its supermarket business. Seven & i sold its Sogo & Seibu department-store business to Fortress Investment Group last year.


Write to Kosaku Narioka at kosaku.narioka@wsj.com


(END) Dow Jones Newswires

07-11-24 0445ET