A man walks past the logo of 7-Eleven displayed at their convenience store in Tokyo, Japan March 6, 2025. Profit has fallen in recent quarters as domestic convenience store operations underperformed competitors and its North American arm suffered from lower consumer spending- - Reuters
TOKYO: Japanese retailer Seven & i Holdings is set to record a 24 per cent drop in quarterly profit on Wednesday (April 9) as underperformance of its convenience store business hampers its ability to fend off a takeover attempt by Canada's Alimentation Couche-Tard.
Seven & i is likely to book operating profit of 94.45 billion yen (US$639.52 million) for December-February, showed the average of eight analyst estimates compiled by LSEG. That would compare with 124.23 billion yen in the same period a year prior.
The 7-Eleven operator's profit has fallen in recent quarters as domestic convenience store operations underperformed competitors and its North American arm suffered from lower consumer spending against a backdrop of accelerating inflation.
At the same time, Seven & i has sought to bat away a US$47 billion bid from Circle-K operator Couche-Tard, arguing initiatives to overhaul its business will increase corporate value and that antitrust barriers in the US may nix any deal.
A management buyout led by Seven & i's founding family collapsed in February after failing to secure funding. The company has since turned to strategies including selling off non-core businesses and appointing Stephen Dacus as CEO.
In March it announced a US$2 billion share buyback and proposed listing its North American convenience store subsidiary by the second half of 2026.
Still, Seven & i's share price, which has traded between around 1,850 yen (US$12.53) and 2,250 yen (US$15.24) since the start of March, is far below Couche-Tard's offer of around 2,700 yen (US$18.28), indicating that investors are sceptical of Seven & i's plans, analysts said.
Last month Seven & i and Couche-Tard said they were working together to find buyers for around 2,000 of their convenience stores in the US, in their most concrete sign of engagement.
Seven & i has said a divestiture plan is necessary to pass a US Federal Trade Commission review. Sources have told Reuters that interested buyers are primarily private equity firms.
Investors and analysts now await the outcome of store-sale discussions and an update on the listing of Seven & i's North American subsidiary. - Reuters
