July 5, 2018 / 6:20 AM / a year ago

Japan's Seven & i first-quarter profit rises on upbeat overseas sales

The logo of Seven & I Holdings is seen at its headquarters in Tokyo, Japan December 6, 2017. REUTERS/Toru Hanai

TOKYO (Reuters) - Japanese retail group Seven & i Holdings Co Ltd (3382.T) said on Thursday its operating profit rose 2.7 percent year-on-year in the three months through May, bolstered by strong sales at its overseas convenience stores.

Operating profit was 86.4 billion yen ($781.2 million) for the first quarter. That was slightly above the average 85 billion yen forecast by three analysts polled by Thomson Reuters I/B/E/S.

The company operates 7-Eleven convenience stores, the Ito-Yokado supermarket chain, as well as department shops. The 7-Eleven chain is Japan’s largest with more than 20,000 stores, and is the key driver for the group’s growth.

As Japan’s convenience store industry faces a slowdown and intense competition from discount drugstore chains, Seven & i Holdings is increasingly banking on overseas operations for growth.

The operating profit at its domestic 7-Eleven businesses declined 6.9 percent year-on-year to 55.4 billion yen. At its overseas convenience store business, which include around 9,500 stores in the United States and 10,500 stores in Thailand, sales surged 33 percent year-on-year to 9.4 billion yen, the company said.

According to a Reuters poll, Japan’s household spending is expected to fall for a fourth straight month in May, adding to worries about weak consumer expenditure that sent the economy into a first-quarter contraction.

The company maintained its forecast for full-year operating profit of 415 billion yen.

Reporting by Sam Nussey; Editing by Subhranshu Sahu and Sherry Jacob-Phillips

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