By Sam Nussey
TOKYO (Reuters) -Japan’s Seven & i Holdings said on Thursday operating profit rose 9.7% in the March to May quarter, beating analysts’ estimates, helped by improved performance by its overseas convenience stores business.
The 7-Eleven operator is under pressure to improve its earnings in the face of a $47 billion takeover bid from Canada’s Alimentation Couche-Tard.
Profit in the first quarter was 65.1 billion yen ($445.19 million), compared to an estimate of 58 billion yen from six analysts polled by LSEG.
The Japanese retailing giant previously announced a share buyback, is selling off non-core assets and plans to list its North American convenience store business.
Profit fell at the company’s domestic convenience stores business while overall net profit was boosted by the sale of store assets by retailer Ito-Yokado.
In the U.S., Seven & i said gross profit margins improved due to the expansion of proprietary products and optimisation of labour costs.
“It’s a tough retail environment in the U.S.”, Stanley Reynolds, president of 7-Eleven, Inc., told an earnings briefing.
“The customer in the U.S. is really looking for value, so we are leaning in with value offers,” he said.
Seven & i shares closed down 1.6% ahead of the earnings report and have fallen 13% year-to-date.
The company had spent some 156 billion yen repurchasing shares by the end of last month.
The retailer maintained its earnings forecast.
($1 = 146.2300 yen)
(Reporting by Sam Nussey; Editing by Jacqueline Wong, Kate Mayberry and Louise Heavens)
