(Adds comment from company president, detail on Speedway deal)
TOKYO, Oct 8 (Reuters) - Japan’s Seven & i Holdings lifted its outlook for the year amid signs of a recovery from the coronavirus pandemic, even as its 7-Eleven stores grapple with weak spending, high labour costs and pressure to ease their 24-hour opening policy.
The company, which in August announced a $21 billion acquisition of U.S. petrol station chain Speedway, said it expected operating profit of 340 billion yen ($3.21 billion) for the year through next February, up from a forecast of 322 billion.
The figure would still be down 20% from a year earlier, however, marking the end of a decade-long growth streak. For its fiscal first-half, operating profit fell 12% from a year earlier to 180 billion yen.
Its president, Ryuichi Isaka, emphasised that the unpredictable course of the novel coronavirus outbreak meant its forecast could change again.
“It is possible that there could be an upward revision, or a downward revision,” he said on a conference call with analysts and media.
In addition to the pandemic’s hit to consumption, the company faces long-term problems in its home market, including a shrinking work force and concern about market saturation.
A labour shortage has prompted franchise owners of its 7-Eleven convenience stores to urge a change in the policy of 24-hour opening, an adjustment backed by the government and a public increasingly sensitive to issues of overwork.
The company has pledged more support for franchise owners, which analysts say could weigh on the chain’s high margins, for years the envy of Japanese retailers struggling with deflation.
In the face of such domestic woes, 7-Eleven has sought growth overseas, and announced in August that it was buying Speedway petrol stations from Marathon Petroleum Corp.
The deal boosts 7-Eleven’s store count in the United States, where the brand originated.
The Japanese affiliate became far more successful than the U.S. business as its 24-hour opening policy and franchise system proved a perfect match with a dense population and late-night work culture.
“Overseas convenience stores are becoming an increasingly crucial segment,” he said.
Isaka said he still expected the deal to close in the first quarter of 2021, although the date may change depending on the timing of regulatory approval. ($1=106.0000 yen) (Reporting by Ritsuko Ando Editing by Clarence Fernandez, Robert Birsel)
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