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UPDATE 1-Japan's Seven & i Q1 profit rises 3.3 pct, boosted by domestic convenience stores
July 6, 2017 / 6:37 AM / 3 months ago

UPDATE 1-Japan's Seven & i Q1 profit rises 3.3 pct, boosted by domestic convenience stores

* Q1 op profit Y84.1 bln, below estimates

* Keeps FY forecast at Y385.5 bln

* Announces business tie-up with mail-order firm Askul (Adds context)

TOKYO, July 6 (Reuters) - Japan’s Seven & i Holdings Co Ltd on Thursday said operating profit rose 3.3 percent in the three months through May, just shy of analyst estimates, boosted by strong demand for own-brand products at its domestic convenience stores.

Profit reached 84.1 billion yen ($743.66 million) for the first quarter. That compared with a 85.91 billion yen Thomson Reuters Starmine SmartEstimate, based on forecasts of three analysts.

The convenience store operator stuck with its 386.5 billion yen forecast for the year ending February, versus the 391.53 billion yen SmartEstimate of 19 analysts. SmartEstimates give greater weight to recent forecasts by top-rated analysts.

On Thursday, Seven & i also announced a business tie-up with mail order firm Askul Corp as it looks to drive more customers to its e-commerce platform.

Convenience store operators are looking to defend their central position in the daily lives of Japanese consumers as a wealth of new internet businesses emerge offering products delivered directly to shoppers’ homes.

The operator of Japan’s largest convenience store chain is expanding its network at home and in the United States, where it is spending $3.3 billion to acquire 1,100 convenience stores from Sunoco LP, bringing its total number of stores in the country close to the company’s 10,000 goal.

Operating profit at convenience stores abroad fell 31.5 percent in the first quarter.

At home, the opening of the first Seven-Eleven store in the southern island prefecture of Okinawa in 2019 will give the chain a presence in every prefecture in Japan, where convenience stores remain a bright spot in an overall sluggish retail landscape.

The retail industry is facing a shortage of labour, with Seven-Eleven Japan easing the financial burden on franchisees by cutting royalty fees from September and introducing labour-saving measures in stores.

$1 = 113.0900 yen Reporting by Sam Nussey; Editing by Christopher Cushing

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