Segment Information

Last update: January 13, 2023

Results for the Third Quarter of FY2022 (Year Ending February 28, 2023)

Fiscal years are indicated by the year in which that fiscal year begins, starting from the first quarter of the fiscal year ending February 28, 2023.

In Domestic convenience store operations, revenues from operations amounted to ¥671,602 million (101.5% year on year), and operating income amounted to ¥185,345 million (104.6% year on year).
The impact of COVID-19 has caused commercial areas to shrink in size and highlighted growing differences in customer needs among individual stores. In this environment, SEVEN-ELEVEN JAPAN CO., LTD. continued to implement activities that integrate three initiatives, specifically expanding its assortment of high-value-added merchandise, changing store layouts as part of efforts to increase the number of items carried and conducting sales promotions that produce an event-like sense of excitement. The goal of these initiatives is to increase the number of customers visiting 7-Eleven stores to find the merchandise they seek. To address growing demand for delivery services, SEVEN-ELEVEN JAPAN CO., LTD. has been strengthening its initiative “7NOW,” a service that allows customers to order items via smartphone for delivery to a designated location in as little as 30 minutes. We will continue to open the next door of convenience by constantly providing new experiences and values, from the customer’s point of view, and continue working to realize sustainable growth throughout the value chain, including franchisees and business partners.
For the nine months ended November 30, 2022, we benefited from factors including an increase in the number of stores carrying new fast food and DAISO merchandise to broaden the customer base and from the success of proactive sales promotion initiatives such as various fair events, as well as a recovery in customer traffic and favorable weather. As a result, existing store sales increased year on year. Operating income increased to ¥185,649 million (104.8% year on year), despite a continued increase in utilities costs resulting from much higher fuel cost adjustment rates. Moreover, total store sales (the sum of sales from directly operated stores and franchisees) amounted to ¥3,883,460 million (103.8% year on year).

In Overseas convenience store operations, revenues from operations amounted to ¥6,628,271 million (188.3% year on year), and operating income amounted to ¥227,539 million (182.3% year on year).
In North America, 7-Eleven, Inc. strove for stable store management even as certain problems emerged, such as labor shortages and supply constraints caused by logistics disruptions in the U.S. market. It continued to implement measures such as expanding its assortment of exclusive merchandise including high quality and highly profitable fresh food and proprietary beverages, and stepping up efforts focused on the “7NOW” delivery service, which is available at approximately 5,000 stores.
For the nine months ended November 30, 2022, despite signs of consumer spending restraint due to surging prices, merchandise sales at existing stores in the U.S. increased year on year in U.S. dollars. In yen terms, operating income amounted to ¥305,765 million (182.9% year on year). Moreover, total store sales (the sum of sales from directly operated stores and franchisees) amounted to ¥7,796,587 million (174.7% year on year). In addition, the Cost Leadership Committee has been established and the cost structure is being drastically revised. Efforts will be made to improve profitability even further by implementing measures such as developing appropriate decision-making frameworks and changing attitudes toward cost control.
Currently, the integration process with the Speedway business acquired in May 2021 is proceeding smoothly and moving at a pace that will greatly outperform the synergies amounting to U.S.$450 million expected to be generated in the fiscal year ending December 31, 2022.
Moreover, 7-Eleven International LLC, which was established through a joint investment by SEVEN-ELEVEN JAPAN CO., LTD. and 7-Eleven, Inc., will strengthen the co-creation of value through collaboration between the 7-Eleven businesses in Japan and the U.S. under the company’s direction, with a view to accelerate its global strategy. By the fiscal year ending December 31, 2025, 7-Eleven International LLC plans to establish a store network of 50,000 stores in areas outside Japan and North America. By the fiscal year ending December 31, 2030, it plans to open stores in 30 countries and regions worldwide, including Japan and North America. With these plans in mind, 7-Eleven International LLC is now formulating a more finely tuned strategic roadmap.

In Superstore operations, revenues from operations amounted to ¥1,064,876 million (79.6% year on year), and operating income amounted to ¥1,295 million (12.8% year on year).
Ito-Yokado Co., Ltd., an operator of general merchandise stores, will continue to promote its regrowth strategy to achieve, including further differentiation and monetization. This will be accomplished by completing business structural reforms by the end of the fiscal year ending February 28, 2023, transforming Ito-Yokado's Net Supermarket (online supermarkets) service into large-scale centers, concentrating on the metropolitan area and other major cities, and converting food to an SPA (Specialty Retailer of Private Label Apparel)-like business model with vertically integrated operations from planning to production and sales.
For the nine months ended November 30, 2022, existing store sales (including tenants) rose year on year mainly due to a recovery in customer traffic, and the rebound from the previous year’s shortened opening hours and limited number of visitors. However, operating loss amounted to ¥5,617 million (in contrast to an operating loss of ¥2,465 million for the same period of the previous year) mainly due to deterioration in the food gross profit margin and an increase in utilities costs and other expenses due to much higher fuel cost adjustment rates.
In addition, existing store sales at York-Benimaru Co., Ltd., a food supermarket operator, declined year on year, primarily due to a downturn in food sales, which had been firm since the start of the COVID-19 pandemic. However, the merchandise gross profit margin improved mainly owing to the effects of its merger on March 1, 2022 with Life Foods Co., Ltd., which had been making and selling side dishes at York-Benimaru stores. York-Benimaru’s operating income amounted to ¥11,999 million (112.7% year on year). York-Benimaru will continue enhancing its high-growth integrated delicatessen production and sales business model, and to target sustainable growth as a supermarket operator that proposes lifestyle solutions.
The Group companies in Superstore operations, centered on Ito-Yokado Co., Ltd., have expansive procurement capabilities spanning fresh food, processed food and other items, a wide range of knowledge, information gathering capacity and relationships of trust with suppliers that have been fostered over many years. Meanwhile, SEVEN-ELEVEN JAPAN CO., LTD. possesses a merchandise development process created independently and dominant sales capabilities. By integrating these strengths, we will continue to expand sales from competitive private brands and implement last mile initiatives, and thereby promote our Group food strategy.

In Department and specialty store operations, revenues from operations amounted to ¥337,369 million (66.1% year on year), and operating loss amounted to ¥794 million. (in contrast to an operating loss of ¥10,217 million for the same period of the previous year).
In Department store operations, existing store sales increased year on year, primarily due to a recovery in mainstay apparel sales and solid sales of luxury brands. However, this was unable to offset the increase in selling, general and administrative expenses such as utilities costs, resulting in an operating loss. In restaurant operations, performance was not profitable despite an improving trend due to a rebound from shortened operating hours and restrictions on the serving of alcoholic beverages, along with a recovery in demand for eating out.
In addition, based on the approach to the business portfolio, we have entered into an agreement to transfer all shares outstanding of Sogo & Seibu Co., Ltd. held by the Company to Sugi Godo Kaisha, a special purpose company which is a related entity of Fortress Investment Group LLC, and are holding discussions to execute the agreement.

In Financial services, revenues from operations amounted to ¥145,700 million (99.8% year on year), and operating income amounted to ¥29,952 million (98.9% year on year).
As of November 30, 2022, the number of domestic ATMs operated by Seven Bank, Ltd. stood at 26,660, up 466 from the previous fiscal year-end. The average number of transactions per day per ATM amounted to 100.4 (up 4.1 year on year), owing to continued growth in the number of cash charge transactions at ATMs as consumers opted for various cashless payments, as well as improvement in the number of transactions at deposit-taking financial institutions. As a result, total transactions of Seven Bank’s ATMs during the nine months ended November 30, 2022 increased year on year. As of November 30, 2022, Seven Bank had cash and deposits (including cash for ATM loading) of ¥895.5 billion.
Under the Group financial strategy, we seek to develop distinctive financial services based on 7iD, an ID that customers can use across the Group, and to provide new experiences and values that span retailing and finance. Currently, the Financial Business Strategy Office is taking the lead in considering specific strategies.

Geographic Area Segments

(Fiscal years ended February 28 or 29.)

Business Segments

Revenues from Operations

Domestic convenience store operations

Overseas convenience store operations

Superstore operations

Department and Specialty Store Operations

Financial services

Others

Eliminations/Corporate

(¥ Billion)

(Millions of yen)

For the fiscal year 2017 2018 2019 2020 2021
Domestic convenience store operations 928,649 955,443 971,236 920,832 873,239
Overseas convenience store operations 1,981,533 2,821,053 2,739,833 2,191,383 5,194,327
Superstore operations 1,901,164 1,902,507 1,849,121 1,810,884 1,810,728
Department and Specialty Store Operations - - 912,060 684,660 712,282
Financial services 202,942 215,007 217,367 198,927 194,399
Others 23,533 23,720 25,202 22,011 20,340
Eliminations/Corporate (74,510) (74,093) (75,695) (66,277) (55,567)
Total 6,037,815 6,791,215 6,644,359 5,766,718 8,749,752

Operating Income

Domestic convenience store operations

Overseas convenience store operations

Superstore operations

Department and Specialty Store Operations

Financial services

Others

Eliminations/Corporate

(¥ Billion)

(Millions of yen)

For the fiscal year 2017 2018 2019 2020 2021
Domestic convenience store operations 245,249 246,721 256,601 234,258 223,396
Overseas convenience store operations 79,078 92,266 102,001 98,097 159,866
Superstore operations 21,260 21,173 21,307 29,683 18,791
Department and Specialty Store Operations - - 8,279 (17,444) (8,153)
Financial services 49,713 52,874 53,610 48,077 37,549
Others 3,670 2,659 1,554 1,944 (115)
Eliminations/Corporate (13,120) (14,515) (16,296) (25,911) (43,681)
Total 391,657 411,596 424,266 366,329 387,653

Assets (at fiscal year-end)

Domestic convenience store operations

Overseas convenience store operations

Superstore operations

Department and Specialty Store Operations

Financial services

Others

Eliminations/Corporate

(¥ Billion)

Assets (at fiscal year-end)

(Millions of yen)

For the fiscal year-end 2017 2018 2019 2020 2021
Domestic convenience store operations 1,127,614 1,147,777 1,224,157 1,252,296 1,182,328
Overseas convenience store operations 1,179,292 1,371,383 1,401,418 2,284,682 4,126,637
Superstore operations 969,037 945,406 959,853 963,545 972,803
Department and Specialty Store Operations - - - 566,491 531,990
Financial services 1,434,793 1,514,897 1,666,038 1,788,607 1,711,943
Others 156,221 159,168 160,882 156,651 36,070
Eliminations/Corporate 123,741 194,920 138,909 51,850 177,506
Total 5,494,630 5,795,065 5,996,887 6,946,832 8,739,279

(Notes) "Partial Amendments to the Accounting Standard for Tax Effect Accounting" (ASBJ No.28; February 16, 2018), etc. have been applied from the beginning of the first quarter of the fiscal year ended February 29, 2020, and results for the fiscal year ended February 28, 2018 and February 28, 2019 are those after retrospective application.

Capital Expenditures

Domestic convenience store operations

Overseas convenience store operations

Superstore operations

Department and Specialty Store Operations

Financial services

Others

Eliminations/Corporate

(¥ Billion)

(Millions of yen)

For the fiscal year 2017 2018 2019 2020 2021
Domestic convenience store operations 140,333 115,525 104,226 129,028 99,801
Overseas convenience store operations 94,285 288,221 134,684 145,170 178,435
Superstore operations 37,821 61,462 47,310 48,411 62,139
Department and Specialty Store Operations - - 22,398 26,160 15,090
Financial services 38,803 34,918 36,099 39,328 37,323
Others 3,723 2,931 2,798 1,760 2,323
Eliminations/Corporate 10,532 10,157 14,127 (11,771) 44,516
Total 347,374 539,328 360,909 377,299 439,630

(Notes) Capital expenditures include long-term leasehold deposits and advances for store construction.

Depreciation and Amortization

Domestic convenience store operations

Overseas convenience store operations

Superstore operations

Department and Specialty Store Operations

Financial services

Others

Eliminations/Corporate

(¥ Billion)

(Millions of yen)

For the fiscal year 2017 2018 2019 2020 2021
Domestic convenience store operations 66,500 72,717 76,519 79,856 80,781
Overseas convenience store operations 69,582 76,141 77,204 81,299 127,193
Superstore operations 23,893 24,475 26,071 26,929 28,600
Department and Specialty Store Operations - - 14,335 14,598 14,460
Financial services 28,926 31,072 29,031 28,766 31,783
Others 2,257 2,267 2,447 2,269 877
Eliminations/Corporate 6,691 1,651 2,238 3,038 8,865
Total 213,167 221,133 226,475 235,504 292,561

Geographic Area Segments

Revenues from Operations

Japan

North America

Others

(¥ Billion)

(Millions of yen)

For the fiscal year 2017 2018 2019 2020 2021
Japan 3,907,835 3,812,200 3,745,475 3,435,146 3,468,840
North America 2,017,092 2,862,627 2,782,055 2,232,234 5,170,053
Others 113,992 117,555 118,118 100,707 112,500
Eliminations (1,104) (1,167) (1,289) (1,371) (1,642)
Total 6,037,815 6,791,215 6,644,359 5,766,718 8,749,752

Operating Income

Japan

North America

Others

(¥ Billion)

(Millions of yen)

For the fiscal year 2017 2018 2019 2020 2021
Japan 314,700 319,613 321,441 266,096 227,174
North America 75,626 90,411 101,777 99,582 159,507
Others 1,320 1,562 1,199 805 1,029
Eliminations 10 9 (152) (154) (58)
Total 391,657 411,596 424,266 366,329 387,653

(Note) "Others" consists of the business results in China, etc.