SEVEN & I Stock: Profits Tumble Amid Takeover Battle

Seven & i Holdings, the Japanese retail conglomerate that operates 7-Eleven stores, reported a significant 23 percent decline in net profit to 173.1 billion yen for the past fiscal year, despite achieving a 4.4 percent revenue increase to 11.97 trillion yen. Earnings per share fell from 84.87 yen to 66.61 yen. The fourth quarter proved particularly challenging, with operating profit dropping by 15 percent to 105.6 billion yen, marking the fourth consecutive quarterly decline. While this slightly exceeded analyst expectations of 94.5 billion yen, investors remain concerned as inflation continues to dampen consumer spending in both Japan and North America. The company's domestic convenience store business has underperformed as price-conscious customers increasingly turn to more affordable competitors.

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The profit downturn complicates Seven & i's resistance to Canadian rival Alimentation Couche-Tard's 47 billion dollar takeover bid. Following the failure of a management buyout by the founding family in February, the company has implemented several measures to boost its valuation, including a 2 trillion yen share repurchase program, divesting non-core businesses, appointing Stephen Dacus as CEO, and planning to list its North American convenience store subsidiary by late 2026. Despite these initiatives, Seven & i's stock price remains between 1,850 and 2,250 yen, significantly below Couche-Tard's approximate 2,700 yen per share offer. Both companies are currently working to identify buyers for around 2,000 U.S. convenience stores to address potential antitrust concerns.