albert Chan
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Source: Company reports/Coresight Research[/caption]
9M19 Results
Japan-based retailer Seven & i reported net sales of ¥4,110.6 billion for the nine months ended November 30, 2018, up 15.8% year over year. Operating income came in at ¥304.3 billion, up 2.9% year over year. Gross margin on net sales decreased by 200 basis points to 19.6% and operating margin fell by 60 basis points to 6.0%. Diluted EPS was ¥176.53, up 4.7% year over year. Below, we outline the performance of convenience store operations, superstore Ito-Yokado, food supermarket York-Benimaru and department store Sogo & Seibu.
Convenience Store Operations
Seven-Eleven Japan (SEJ) recorded operating income of ¥185.4 billion, down 1.1% year over year due to the impact of reduced royalties. Same-store sales increased 1.5% year over year following growth in food items including sandwiches, noodles and delicatessen and health-oriented products. 7-Eleven, Inc. (SEI) which operates overseas convenience store business outside Japan recorded operating income of $752.6 million, up 15.7% year over year as a result of optimizing operating expenses. U.S. merchandise existing store sales increased 1.4% year, which the company attributes to the success of the 7 Rewards digital program in attracting repeat customers. Fresh foods tailored for specific U.S. cities and improved quality of private label 7-Select also drove sales growth.
Ito-Yokado
Superstore Ito-Yokado reduced its operating loss to ¥200 million from ¥2.5 billion over the same period last year due to the success of ongoing store restructuring and closure of unprofitable stores. Net sales decreased 0.3% year over year to ¥890.1 billion as a warmer winter slowed sales of apparel and winter merchandise.
York-Benimaru
Food supermarket York-Benimaru recorded operating income of ¥7,814 million, down 13.2% year over year. Net sales grew slowly, by 2.4% year over year to ¥324.3 billion and same-store sales fell slightly by 0.8% year over year.
Sogo & Seibu
Department store Sogo & Seibu’s operating loss increased to ¥937 million from ¥142 million over the same period last year due to increased expenses in system investments. Net sales fell 11.4% to ¥435.2 billion, although Tokyo area stores performed well.
Outlook
The company did not provide quantitative guidance for FY19.
Source: Company reports/Coresight Research[/caption]
9M19 Results
Japan-based retailer Seven & i reported net sales of ¥4,110.6 billion for the nine months ended November 30, 2018, up 15.8% year over year. Operating income came in at ¥304.3 billion, up 2.9% year over year. Gross margin on net sales decreased by 200 basis points to 19.6% and operating margin fell by 60 basis points to 6.0%. Diluted EPS was ¥176.53, up 4.7% year over year. Below, we outline the performance of convenience store operations, superstore Ito-Yokado, food supermarket York-Benimaru and department store Sogo & Seibu.
Convenience Store Operations
Seven-Eleven Japan (SEJ) recorded operating income of ¥185.4 billion, down 1.1% year over year due to the impact of reduced royalties. Same-store sales increased 1.5% year over year following growth in food items including sandwiches, noodles and delicatessen and health-oriented products. 7-Eleven, Inc. (SEI) which operates overseas convenience store business outside Japan recorded operating income of $752.6 million, up 15.7% year over year as a result of optimizing operating expenses. U.S. merchandise existing store sales increased 1.4% year, which the company attributes to the success of the 7 Rewards digital program in attracting repeat customers. Fresh foods tailored for specific U.S. cities and improved quality of private label 7-Select also drove sales growth.
Ito-Yokado
Superstore Ito-Yokado reduced its operating loss to ¥200 million from ¥2.5 billion over the same period last year due to the success of ongoing store restructuring and closure of unprofitable stores. Net sales decreased 0.3% year over year to ¥890.1 billion as a warmer winter slowed sales of apparel and winter merchandise.
York-Benimaru
Food supermarket York-Benimaru recorded operating income of ¥7,814 million, down 13.2% year over year. Net sales grew slowly, by 2.4% year over year to ¥324.3 billion and same-store sales fell slightly by 0.8% year over year.
Sogo & Seibu
Department store Sogo & Seibu’s operating loss increased to ¥937 million from ¥142 million over the same period last year due to increased expenses in system investments. Net sales fell 11.4% to ¥435.2 billion, although Tokyo area stores performed well.
Outlook
The company did not provide quantitative guidance for FY19.
- Seven-Eleven Japan plans to convert 2,000 domestic convenience stores with new store layouts featuring expanded counters and offerings in fast and frozen food, by the end of February 2019.
- Store restructuring and optimization of working hours of personnel will continue at superstore Ito-Yokado and department store Sogo & Seibu to maximize efficiency and cut operating expenses.