Seven & i Holdings Co., Ltd.

For Q3 2024, revenues from operations were ¥9,065.5 billion, up 105.7% year over year; operating income was ¥315.4 billion, down 76.9% year over year but 102.3% of the revised plan; and net profit was ¥63.6 billion, or 34.9% of the prior year and 101% of the revised plan. Management said overseas CVS figures are after goodwill amortization. For special items, cumulative special losses in the first nine months were ¥178.9 billion, with ¥149.6 billion expected for the full year; one-off special gains are expected to total ¥114.3 billion. The company said its full-year 2024 profit forecast is unchanged, and it still expects to meet each profit line in the October outlook. For the Greater Tokyo superstore transformation, management reiterated fiscal 2025 targets of EBITDA above ¥55 billion and ROIC above 4%. Seven-Eleven U.S. gave 2025 targets of 1.5% same-store sales, 34.1% merchandise gross margin, and OSG&A at 16.4% of sales. It also said it is targeting a 90 basis point reduction in OSG&A as a percentage of sales in 2025 and a $500 million cost reduction by the end of 2024.

Yoshimichi Maruyama framed 2024 as a major transition year in which the company is cleaning up low-profit businesses and assets to build a stronger base for medium- and long-term growth. He said the initiatives launched under the April action plan should be completed within this fiscal year and are intended to support profit growth from 2025 onward. His tone was cautious but increasingly confident, emphasizing that the company is “close to a dawn” after repeated trial and error.

Fumihiko Nagamatsu focused on the scale and purpose of the special items. He said first-half special losses were ¥45.8 billion, third-quarter special losses were ¥56.7 billion, and total cumulative special losses for nine months reached ¥178.9 billion; foreseeable full-year special losses are expected to be ¥149.6 billion, while special gains are expected to total ¥114.3 billion, including sale-and-leaseback gains from SEI. He said these items are aimed at completing the liquidation of less profitable businesses and assets by fiscal year-end, and that the company still expects to achieve the full-year forecast without changes.

Analysts’ main concerns centered on weak U.S. convenience-store trends after the CrowdStrike outage, inflationary pressure on consumers, cigarette declines, and whether the company could offset those headwinds with traffic-driving offers and proprietary products. Management said U.S. sales trends are improving, November same-store sales were slightly positive, and December should be negative mainly because of calendarization, though December sales excluding cigarettes are projected to be positive. In Japan, management said the “pleasant value” campaign is working, especially with younger and price-sensitive customers, and in superstores they acknowledged gross profit pressure from rice and electricity costs plus weak fall-winter apparel demand.