Seven & i lifts FY'21 earnings forecast despite 23% drop in 9-month net income

Seven & i Holdings Co. Ltd. on Jan. 12 raised its earnings forecast for fiscal 2021, noting signs of recovery amid the coronavirus pandemic, despite posting a 22.9% drop in net income for the first nine months of the year.

For the nine-month period ended Nov. 30, 2020, the Japanese convenience store operator reported that net income attributable to owners of the parent fell to ¥130.99 billion from ¥169.97 billion a year ago.

Diluted EPS amounted to ¥148.35, down from ¥192.23 in the prior-year period.

Revenue from operations slumped 14% year over year to ¥4.277 trillion from ¥4.976 trillion, driven by declines across all of the company's business units. Meanwhile, total group sales also decreased 8.3% to ¥8.266 trillion from ¥9.019 trillion.

Across Seven & i's business segments, revenue declined 5.3% to ¥694.50 billion in its domestic convenience store operations, and dropped 21% in its overseas convenience store unit to ¥1.640 trillion.

The food retailer said nine-month revenue of its superstore operations decreased 2.6% to ¥1.330 trillion, while revenue of its department store division fell 28.6% to ¥300.25 billion. Revenue also declined by 7.5% in its financial services arm to ¥150.74 billion, 23.3% in its specialty store segment to ¥194.30 billion, and 17.4% to ¥16.10 billion in its other businesses.

Operating income shrank 10.5% to ¥285.63 billion year over year, while comprehensive income dropped 26% to ¥120.59 billion.

Seven & i raised its attributable net income outlook for the year ending Feb. 28 to ¥144.50 billion, or ¥163.66 per share, from its prior forecast of ¥138.50 billion, or ¥156.86 per share.

However, it lowered its full-year revenue guidance to ¥5.718 trillion from ¥5.759 trillion.

"The revised forecasts reflect our assumption that the impact made by people adopting new lifestyles will remain until fiscal year-end at the earliest, and may change depending on when the situation returns to normal," the food retailer said.

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As of Jan. 11, US$1 was equivalent to ¥104.20.