Seven & i Holdings Co. announced on Thursday that it expects an operating profit of ¥404 billion for the fiscal year ending February 2026. This is a 4% decline compared with earlier projections. This marks a sharp reversal from its July forecast, when the company anticipated a modest 0.7% increase to ¥424 billion.
The revision reflects persistent weakness in the company’s domestic convenience store business, as Japanese consumers have become more price-sensitive amid rising living costs. President and CEO Stephen Hayes Dacus acknowledged at a press conference that the business environment remains challenging. Hayes emphasized the need to better address customer needs to sustain growth.
For the first half of the fiscal year through August, Seven & i Holdings reported operating revenue of ¥5.61 trillion, down 6.9% from the previous year. This related to weaker sales in its overseas convenience store operations following a decline in gasoline prices. However, net profit rose sharply by 130% to ¥121.8 billion. Subsidiary Ito-Yokado Co.’ supported this by its return to profitability.
Reasons and Competition
Despite some recovery in same-store sales, profitability in the domestic convenience store segment continues to lag. Operating profit for the division fell by 4.6%, driven by higher costs for ingredients like rice and coffee beans. As a result, the company cut its full-year profit outlook by an additional ¥30 billion.
The forecast downgrade follows months of strategic restructuring. After Canadian retail giant Alimentation Couche-Tard withdrew its acquisition proposal in July, Seven & i shifted its focus fully to strengthening its core convenience store operations. Its new mid-term plan through fiscal 2030 aims to expand its domestic 7-Eleven network by about 1,000 stores. Additionally, York Holdings Co., which manages non-convenience store businesses such as Ito-Yokado, was deconsolidated in September and became an equity-method affiliate.
Yet, the 7-Eleven brand continues to face challenges. Many consumers view its products as expensive compared to rivals, and its same-store sales growth remains below target. While 7-Eleven’s domestic sales increases have stayed under its 2.5% goal, competitors Lawson Inc. and FamilyMart Co. have achieved growth rates between 4% and 5%. FamilyMart even reported record first-half profits, buoyed by strong sales of onigiri rice balls and other popular items.
Seven & i Holdings now aims to revitalize customer interest through new products and enhanced services. Dacus reaffirmed the company’s commitment to creating offerings that “excite consumers” and strengthen its position in Japan’s increasingly competitive convenience store market.
Reference
平子. (2025, October 10). Japan’s Seven & i Forecasts 4% Drop in Operating Profit, Amid Sluggish Convenience Store Performance. The Japan News. https://japannews.yomiuri.co.jp/business/companies/20251010-285873/