Seven & i Holdings Co., Ltd.

Business Details

Operates convenience stores through directly-managed and franchise formats, centered on Seven-Eleven Japan Co., Ltd. Handles a wide range of processed foods, fast food, daily delivered foods, and non-food items, with royalty income (charge income) from franchise stores as the main revenue source. Also promotes digital and new-format initiatives such as the delivery service "7NOW" and the new format "SIP Store".

Recent Overview

In FY2026 (ending February 2026), existing store sales exceeded the prior year, but the gross margin declined due to rising raw material costs, resulting in higher revenue but lower profit

Operating revenue for FY2026 (ending February 2026) increased slightly to ¥914,583 million (101.2% year on year), while operating profit declined to ¥222,521 million (95.3% year on year). Existing store sales exceeded the prior year, but the gross margin declined due to rising prices of raw materials such as rice, compounded by increased SG&A expenses stemming from inflation. Following the transition to a new management structure in May 2025, the company has been promoting "fresh food differentiation," "strengthening of the store network," "maximizing customer value through 7NOW," and "strengthening customer engagement" as key priority measures. Nationwide rollout of SEVEN CAFÉ Bakery and SEVEN CAFÉ Tea was carried out. Chain-wide store sales were ¥5,469,315 million (101.9% year on year).

Key Products

Growth Drivers

• Existing store sales exceeding the prior period (success of customer base expansion and visit frequency improvement measures)
• Fresh food differentiation through nationwide rollout of SEVEN CAFÉ Bakery and Tea
• Capturing digital demand through expansion of the 7NOW delivery service
• Strengthening the store network with a target of a net increase of 1,000 stores from FY2025 to FY2030 (small urban stores, satellite-format openings, etc.)
• Strengthening engagement through co-creative marketing and SNS/mass media-linked initiatives

Risks

• Downward pressure on gross margin due to rising raw material prices such as rice
• Increased SG&A expenses (labor costs, utility costs, etc.) accompanying price inflation
• Impact on customer count and average spend from polarization of consumption and weakening consumer sentiment
• Structural shrinkage of the domestic market due to declining birthrate, aging population, and population decline
• Intensifying competition with other companies in the ready-to-eat and fresh food markets

Business Details

Comprised of 7-Eleven, Inc. (North America), 7-Eleven International LLC (international expansion), 7-Eleven Australia (Australia), and others. Operates convenience stores through directly-managed and franchise formats, with merchandise sales, gasoline sales, and franchise charge income as revenue sources. This segment accounted for approximately 89.8% of consolidated operating revenue in the first quarter of FY2027 (ending February 2027), maintaining its position as the largest segment in the group.

Recent Overview

Overseas CVS operating profit recovered sharply to 755% year on year, with the effects of structural reforms becoming visible

Operating profit for the Overseas Convenience Store Business in the first quarter of FY2027 (ending February 2027) increased significantly to ¥65,592 million (755.0% year on year). In North America, existing store merchandise sales in the U.S. exceeded the prior year on a dollar basis, and gasoline revenue also benefited from market price fluctuations. Thorough cost management through value chain redesign was successful. Due to foreign exchange effects (U.S.$1 = ¥156.96), operating revenue increased by ¥1.8 billion year on year. The full-year operating revenue forecast was revised upward by ¥960,000 million from the previous forecast to ¥9,426,000 million.

Key Products

Growth Drivers

• Improved gross margin and higher average customer spend through expansion of original products and fresh food
• Establishment of new revenue sources through expansion of the 7NOW delivery service
• Improved asset efficiency and advancement of the store network through accelerated franchising of directly-managed stores
• Strengthened earnings structure through value chain redesign and thorough cost management
• Promotion of transformation into a "food convenience store" tailored to each market's characteristics by 7-Eleven International LLC
• Existing store sales growth in Australia through expansion of Japan-related products and strengthened fresh food offerings

Risks

• Impact on existing store merchandise sales from continued thrift-conscious and reduced consumption trends, particularly among low- to middle-income consumers in North America
• Rising raw material prices due to growing concerns over price inflation amid prolonged geopolitical risks
• SG&A expenses trending slightly above the prior year, requiring continued cost management
• Impact on yen-converted results from foreign exchange fluctuations (yen appreciation)
• Instability of fuel retail revenue due to gasoline market price fluctuations
• Risk of additional impairment losses arising from closure of unprofitable stores

Business Details

Operates the GMS (General Merchandise Store) Business and Supermarket Business, centered on Ito-Yokado Co., Ltd. and York-Benimaru Co., Ltd. A retail business that comprehensively provides daily necessities such as food and daily goods. As of September 1, 2025, the absorption-type company split to Bain Capital was completed, and the business transitioned under BCJ-95 Co., Ltd. (an equity-method affiliate, with a 35.07% ownership stake held by the Company). For FY2026 (ending February 2026), only results through the first half (interim consolidated accounting period) are recorded on a consolidated basis.

Recent Overview

Business separation to Bain Capital completed in September 2025, leading to deconsolidation

As of September 1, 2025, 21 subsidiaries under York Holdings Co., Ltd. were excluded from the scope of consolidation, and BCJ-95 Co., Ltd. became an equity-method affiliate. Operating revenue for FY2026 (ending February 2026) was ¥689,478 million (48.1% year on year), and operating profit was ¥17,515 million (168.2% year on year). Revenue decreased significantly because only the first half was recorded, but a gain on change in equity interest of ¥26,946 million associated with the business separation was recorded as extraordinary income. For the separated business, the portion recorded in the current period was operating revenue of ¥837,994 million and operating profit of ¥23,032 million.

Key Products

Growth Drivers

• Sustainable growth utilizing Bain Capital's retail and consumer goods industry expertise and financial strength (post-deconsolidation)
• Reduced SG&A expenses and improved profitability through fundamental transformation, including store closures, at Ito-Yokado
• Rollout of the "YORK DELI" prepared foods brand utilizing strategic investment infrastructure such as process centers and central kitchens
• Increased existing store sales at York-Benimaru through successful sales promotion measures

Risks

• Significant year-on-year decline in revenue (operating revenue at 48.1% year on year) since only the first half of FY2026 (ending February 2026) is recorded on a consolidated basis
• Limited contribution to the group after deconsolidation, as results are now reflected through the equity method as an affiliate (BCJ-95)
• Profit pressure on York-Benimaru due to rising raw material prices (FY2025 (ending February 2025) operating profit at 89.9% year on year)
• Risk of declining existing store sales at Ito-Yokado due to reduction of directly-operated sales floor space
• History of recording a large impairment loss of ¥40,095 million in the prior period (FY2025 (ending February 2025)) (reduced to ¥1,201 million in the current period)

Business Details

As of June 24, 2025, Seven Bank, Ltd. and its 9 subsidiaries were excluded from the scope of consolidation and transitioned to equity-method affiliates. In the first quarter of FY2027 (ending February 2027), Seven Bank and BCJ-95 Co., Ltd. are reflected in consolidated results as equity-method affiliates. The Financial Services Business is categorized together with the Superstore Business and others under the "Other Businesses" segment, and is not disclosed as an independent segment.

Recent Overview

Deconsolidation of Seven Bank caused the scale of "Other Businesses" to shrink sharply to approximately 3.5% of the prior year level

As a result of the exclusion of Seven Bank and its 9 subsidiaries from the scope of consolidation as of June 24, 2025, and the exclusion of subsidiaries under York Holdings as of September 1, 2025, operating revenue for "Other Businesses" in the first quarter of FY2027 (ending February 2027) was only ¥16,237 million (3.5% year on year), and operating profit was ¥1,507 million (7.7% year on year). Meanwhile, Seven Bank and BCJ-95 are recorded as equity-method affiliates, and investment gain on equity method in the consolidated statement of income was ¥3,435 million.

Key Products

Growth Drivers

• Improved earnings at Seven Bank, now an equity-method affiliate, contributing to consolidated results through equity-method investment gains
• Maintenance of Seven Bank's fee income through sustained high levels of cash charge transactions at ATMs amid the spread of cashless payments
• Continued financial and retail synergies through linkage of the group's common ID "7iD" with Seven Bank accounts

Risks

• Since results of the Financial Services Business are now reflected only through equity-method gains or losses following Seven Bank's deconsolidation, the Company's management involvement and ability to control results are limited
• Long-term risk of declining demand for ATM cash withdrawals due to the progress of cashless payments
• Pressure on fee income due to stricter financial regulations and intensifying competition with rival ATM operators
• Reduced transparency for investors due to the loss of independent disclosure of Financial Services Business results after integration into the "Other Businesses" segment

Business Details

A business segment not included in the reportable segments; from the first quarter of FY2027 (ending February 2027), its composition was changed to include the Financial Services Business and others. As of June 24, 2025, Seven Bank, Ltd. and its 9 subsidiaries, and as of September 1, 2025, subsidiaries under York Holdings Co., Ltd., were excluded from the scope of consolidation, resulting in a significant reduction in segment scale. Currently, Seven Bank, Ltd. and BCJ-95 Co., Ltd. are recorded as equity-method affiliates.

Recent Overview

Segment scale contracted sharply due to the effects of deconsolidation, shifting toward a composition centered on the Financial Services Business

Due to the exclusion of Seven Bank and its 9 subsidiaries from the scope of consolidation as of June 24, 2025, and the exclusion of subsidiaries under York Holdings as of September 1, 2025, operating revenue for the first quarter of FY2027 (ending February 2027) contracted significantly to ¥16,237 million (3.5% year on year), and operating profit was ¥1,507 million (7.7% year on year). On the other hand, although the absolute amount is small, the operating profit margin improved to 9.3% from 4.2% in the prior-year period. The full-year forecast is operating revenue of ¥76,000 million and operating profit of ¥4,900 million.

Key Products

Growth Drivers

• Contribution from equity-method investment gains from Seven Bank and BCJ-95 (reflected in consolidated results)
• Improved earnings structure in the remaining businesses following the reorganization of the business portfolio

Risks

• Risk that the significant reduction in segment scale due to deconsolidation will result in an extremely limited contribution to overall group performance
• Risk that fluctuations in the performance of equity-method affiliates (Seven Bank and BCJ-95) will directly affect segment profit and loss
• Risk that comparability with the prior-year period has been lost due to segment reorganization (changes in the categorization of the Superstore Business and Financial Services Business)
• Risk of high uncertainty in future earnings forecasts due to ongoing changes in segment composition