7-Eleven owner Seven & i Holdings reported first-quarter operating profit that beat market expectations, driven by stronger performance in its overseas convenience store segment.
The Japanese company posted operating profit of 65.1 billion yen for the April-June quarter, up 9.7% from a year earlier.
Seven & i’s overseas convenience store operations posted stronger-than-expected results. First-quarter fuel gross profit declined by $51.6 million year-on-year, but local currency operating profit rose 22.4%. Average daily sales per store came in at $5,229, and gross margins expanded 110 basis points to 33.1%, helped by increased sales of private-brand and fast food products.
Same-store sales in the overseas segment declined 1% year-on-year, continuing a gradual downward trend from previous quarters, though excluding cigarette sales the figure was flat.
Jefferies described its overall impression of the results as “neutral” and noted that June same-store sales at Seven-Eleven Japan rose 2% year-on-year. However, that growth lagged behind domestic rivals Lawson, which posted 7.7% growth, and FamilyMart at 4.4%.
The company kept its full-year guidance and all operating assumptions unchanged, including currency impacts, which added a modest 0.2 billion yen to quarterly profit.