April 5, 2012 / 8:59 AM / 5 years ago

UPDATE 2-Seven & I sees record profit on convenience stores

* FY 2012 op profit forecast to rise 7.9 pct to 315 bln yen

* Q4 op profit up 12 pct at 75.8 bln yen, caps record year

* Shares up more than 17 pct year to date, beat benchmark

* Seven & I looking to 'aggressively' expand in US - pres (Adds detail, quote, writes through)

By Chris Gallagher

TOKYO, April 5 (Reuters) - Japan's top general retailer Seven & I Holdings Co Ltd on Thursday forecast a second straight year of record profit as the company targets a broader demographic to drive domestic convenience-store sales and seeks acquisitions in the United States.

Seven & I's results will likely set the tone for similarly strong earnings due next week from other retailers such as Aeon Co Ltd, in contrast to heavy losses expected at electronics makers such as Sony Corp and Panasonic Corp .

Convenience store operators in particular, also including Lawson Inc and FamilyMart Co Ltd, increased sales last year as Japanese snapped up food and daily supplies in the aftermath of the earthquake and tsunami.

To keep these customers coming back, they expanded product lineups with new offerings such as cooking oil, fresh vegetables and rolled sponge cake, appealing to a wider range of customers than the young men who typically frequent convenience stores.

Seven & I President Noritoshi Murata told a briefing that it was important to continue developing new products to target changing Japanese demographics as the population ages and more people live in single- or two-person households.

"We want to expand aggressively in America including through M&A," he said, noting that Seven & I was looking to add more than 600 stores in the United States this financial year.

The owner of 7-Eleven, the world's largest convenience store chain, forecast a 7.9 percent rise in operating profit to 315 billion yen ($3.8 billion) for the year that began in March, slightly higher than the average projection for 308.4 billion yen from a poll of 17 analysts by Thomson Reuters I/B/E/S.

For the year to February, Seven & I booked a 20 percent rise in operating profit to 292.06 billion yen, the highest level since its establishment as a holding company in 2005. It set its previous record of 286.8 billion yen in 2006.

In the December-February quarter, operating profit clocked in at 75.84 billion yen, a 12 percent year-on-year rise.

Many Japanese retailers are poised to post record profits for the business year that just ended following higher demand for food and consumer goods, particularly higher-margin prepared meals and private-label products.

A Reuters poll showed that Japan's economy is expected to grow 1.9 percent in the fiscal year that began in April on a pickup in exports, boding well for further growth in retail sales.

Seven & I is among the first of Japan's blue-chip companies to give annual forecasts. Rivals such as top supermarket operator Aeon and convenience store chains Lawson and FamilyMart are scheduled to issue results next week.

Seven & I shares have risen more than 17 percent over the past year, outperforming a close to 1 percent gain in the benchmark Nikkei average.

Before the earnings announcement, shares of Seven & I ended 0.3 percent lower, against the Nikkei's 0.5 percent fall. (Additonal reporting by James Topham; Editing by Matt Driskill and Chris Lewis)

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