TOKYO -- Seven & i Holdings, the Japanese parent of the 7-Eleven convenience store chain, looks to have secured record operating profit for the six months ending August, Nikkei has learned.
The 1% growth in operating profit to about 200 billion yen ($1.8 billion) comes as a relief to the company and its investors, after the disastrous debut of its 7Pay mobile payment platform in July, which was quickly hacked and forced the group to discontinue the service a month after its launch.
Seven-Eleven Japan paid for its July hack by having to report its first year-on-year decline in monthly chain-wide sales in more than nine years that month.
Having to pay out higher wages to secure staff amid a labor shortage, the group trimmed down its cost structure, particularly in advertisements. Any money left over was spent refurbishing existing stores that were experiencing slower growth.
The cost cutting looks to have worked. This will mark the seventh consecutive year of operating profit growth for Seven & i.
A rise in the number of convenience stores, both in Japan and overseas, also helped bolster earnings. In Japan, the group has 21,030 stores as of August. The group added 160 stores in the past half-year and 440 for the full year, including its first ever in the southern island prefecture of Okinawa.
The hot August weather in Japan helped sales of cold noodles and beverages.
In the U.S., convenience store sales grew thanks to growth in foods such as pizza. The stronger dollar and the weaker yen also benefited the Tokyo-based group.
The company plans to announce its half-year earnings on Oct 10. The group expects a 2% growth in operating profit to about 420 billion yen for the full year ending February 2020.