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Investing.com -- Seven & i Holdings reported first-quarter operating profit (OP) of ¥65.1 billion, a 9.7% year-over-year increase, which was in line with Jefferies estimates and beat the consensus 6.5%.
In a note following the results, Jefferies analysts maintained a neutral view and said attention now turns to a strategic update expected in August.
“No update was given on the acquisition offer, and we await the new strategy announcement in August,” Jefferies wrote, noting that further details may emerge during a sell-side meeting on July 11.
Segment results were mixed. Domestic convenience store (CVS) performance came in below Jefferies estimates.
“Domestic CVS: OP totaled ¥54.5bn (-11% YoY) vs. Jefe ¥62.6bn,” with same-store sales growth (SSSg) at +0.6%, driven by a 1.3% increase in average spend but a 0.7% decline in traffic.
“Gross margins of 31.7% (-0.6ppt YoY) missed Jefe 32.3% due to difficult rice products and counter FF items,” analysts added.
In contrast, overseas CVS operations showed stronger-than-expected results. “Fuel GP decreased by $51.6m YoY and local currency OP rose 22.4% vs. Jefe +13%, largely due to better GPM.”
Gross margin expanded to 33.1%, beating expectations, while average daily sales per store reached $5,229, slightly above Jefferies’ forecast.
Although June SSSg at Seven-Eleven Japan rose 2% year-over-year, Jefferies noted the result “still lagged behind Lawson at +7.7% and FamilyMart at +4.4%.”
Overall, Jefferies said the Q1 print was “neutral” and that the focus now shifts to August’s strategy update, which could provide key insight into the company’s longer-term plans.