During this period (March to August 2023), operating revenue, equivalent to sales, amounted to 5,547 billion yen, a slight dip from the 5,651.5 billion yen recorded in the corresponding period last year. Operating income stood at 241.1 billion yen, demonstrating a notable increase from the 2,347 billion yen reported in the same period last year.
Notably, 7-Eleven, Inc. (SEI), responsible for the North American convenience store business and constituting 70% of the company’s consolidated sales, plays a pivotal role. SEI’s revenue heavily relies on gasoline sales, and the surge in gasoline prices in the prior fiscal year was projected to exert a negative impact in the current fiscal year.
Nevertheless, the company achieved a slender growth in operating profit, setting a new record. All sales and profits surpassed the forecasts announced on September 1st. This feat was underpinned by the domestic convenience store business, a cornerstone of the company’s profitability. In the first half, 7-Eleven Japan witnessed an unprecedented milestone, with average daily sales per store surpassing 700,000 yen for the first time, reaching 701,000 yen—an increase of 33,000 yen compared to the same period last year. This commendable performance more than compensated for the lag in North America.
Surprisingly, the market reception was lukewarm. Despite the stock price hovering around 5,800 yen until the financial results were disclosed, it experienced a precipitous drop on the 13th, the day after the announcement. At one juncture, the price plummeted to 5,451 yen, nearing its lowest point since the commencement of the year (5,430 yen).
This tepid response primarily stems from SEI’s decelerated growth momentum. While the decline in gasoline sales was anticipated from the outset of the fiscal year, the dip in non-gasoline product sales caught many off guard. CFO Yoshimichi Maruyama elaborated that the initial plan factored in an optimistic outlook, assuming that inflation in North America would subside in the latter half of the year, leading to a resurgence in consumption. However, with inflation showing no signs of abating, real wages and household spending propensity have waned. Consequently, the company had no choice but to substantially revise down its full-year same-store sales forecast to 1.3%. Simultaneously, the projection for the gross profit margin for products was adjusted downward from 34.9% to 34.4%.
