Earnings Call: Q4 2026

Apr 9, 2026

Good evening, everyone. Thank you for joining us today. Let me start by framing the environment in which we operate. I shared this perspective back in October, and it remains unchanged. We're operating in an industry that is undergoing profound structural change. There are three shifts that are defining the future of convenience. First, customers are becoming more value-conscious. Second, expectations for food quality and freshness continue to rise. Third, convenience itself is being redefined as customers shift across channels and engage more through digital platforms and delivery. These are not short-term trends. They are reshaping the industry. In addition, in North America, we are seeing continued declines in fuel volumes and increased volatility in oil prices. As this volatility continues, we may begin to see impacts in consumer sentiment across markets. Now, against this backdrop, our ambition is clear: to remain the first choice for convenience, globally. To do that, our advantage starts with merchandising. We stay close to our customers, and we focus relentlessly on what matters to them. We develop differentiated products that stay ahead of their needs, and we deliver them with superior quality at compelling value. That is how we win. We combine this with our proven framework for store operations, tailoring product offerings and store formats to each local customer base. Our merchandising and operational excellence are supported by a strong, integrated value chain, helping us move faster and execute better and deliver consistently. Now, all of this is powered by our unmatched global store network of more than 85,000 locations, as well as our franchise model, which makes this network even stronger. Each franchise owner is an entrepreneur with real ownership and accountability. This local entrepreneurship keeps us close to our local customers every day. In addition, 7NOW is a critical driver of our advantage. It is more than a delivery platform. It turns our stores into a true on-demand network. It allows us to meet customers wherever they are, whenever they need us. In the current environment, where higher fuel prices are potentially impacting customer driving habits, 7NOW brings our offering directly to the customer. These advantages form a powerful platform. We outsell our peers in merchandise sales per store by approximately 20% in Japan. In North America, we outperform the average of our listed competitors by about 10%. On top of all that, in those two geographies, we serve more than 30 million customers every single day. All of this gives us scale, it gives us reach, and it allows us to move fast. Importantly, this platform that I just spoke of is gaining momentum. Now, since becoming CEO, my focus has been clear. I've said this many times, disciplined execution. That has been my priority from day one, and we are seeing the impact. Across the group, we are more connected globally and with stronger alignment, clear accountability, and a shared focus on delivering value for our customers. We said we would focus on execution. We are executing, and we are delivering. As a result, in 2025, we have regained momentum. Execution is improving, customer engagement is strengthening, and our performance is now reflecting that. Looking ahead to 2026, we will build on this momentum. We will accelerate our transformation while strengthening our fundamentals. We are doubling down on a competitive edge. We are sharpening our merchandising and strengthening our value chain to deliver better products at even better value. We are elevating operational excellence and investing in our unmatched store network to elevate our customer experience. 2026 will be a year of acceleration and execution. From 2027 onward, we will see accelerating financial impact as the transformation continues to deliver tangible results. Now let me look back at our performance in 2025. Despite a challenging market environment, we delivered record net income and record earnings per share. That is the result of disciplined execution, and it reflects the tangible progress that we have made. 2025 made two things very clear. First is the resilience of our business model, and second, the value that we can unlock through sharper execution. Together, these position us well for the next phase of growth. Also, importantly, we completed a major structural transformation. By deconsolidating York Holdings and Seven Bank, we are now a pure-play convenience store business. That means greater focus, greater clarity, stronger capital discipline, and enhanced profitability. For our shareholders, we continue to deliver on our commitment to enhance returns. We completed this first JPY 600 billion tranche of our JPY 2 trillion share repurchase program through 2030, and we remain fully committed to the remainder of that program, along with progressive dividends. Now let me turn to 2026. We will build on this momentum and accelerate. Excluding the impact of the deconsolidation of York Holdings and Seven Bank, we expect solid growth in merchandise store revenue, operating profit, and EBITDA for 2026. We are already seeing encouraging signs in our first quarter. The momentum that began in late 2025 is continuing into 2026. Our focus is clear, to elevate customer experience for sustainable growth. It is built on quality and value, executed with greater speed and discipline. To support this, we are executing our plan to invest up to JPY 3.2 trillion through 2030 to strengthen quality, deliver value, and build a stronger foundation for sustainable growth. We are investing with intent to strengthen our stores and drive organic growth because store quality matters. It shapes the customer experience, it builds the brand, and it drives long-term growth. 2026 will be a pivotal year for us. Let me begin by outlining some of the specifics, beginning with SEJ. Under new leadership, SEJ is improving customer engagement, stabilizing performance, and restoring operational discipline. These actions are now translating into stronger sales momentum. SEJ is now entering the next phase of its structural transformation. We are strengthening our franchisee partnerships, tightening our cost disciplines, and optimizing the value chain. This will take time, but the direction is clear and momentum is building. You should expect steady progress over the next year with more meaningful financial impact over a 2-year horizon. Now let me turn to SEI. Our largest growth opportunity lies in North America. We are taking decisive action to evolve our approach. SEI has defined its North Star, a clear vision for 2030. Importantly, this is being driven by our teams on the ground. Based on this North Star, organic growth will be our priority. To enhance customer experience, we are prioritizing store renovations to elevate store quality and strengthen our brand equity. Now, this all goes beyond just physical upgrades. We are elevating every element of the customer experience from safety and cleanliness to product quality and excitement. We will share more details on this at our upcoming IR Day. At the same time, we will continue to expand our store network with discipline, and cost discipline remains fundamental. SEI is evolving its value chain and logistics network to optimize our distribution centers and improve price competitiveness. At the same time, 7NOW remains a core pillar of our growth. Convenience is evolving rapidly. 7NOW allows us to meet customers wherever they are, whenever they need us. 7NOW has grown at a compound annual growth rate of 25% over the last four years and is now about $1 billion in revenue, and it has significantly expanded our customer reach. Here, let me briefly address leadership at SEI. We are continuing our search for the next CEO of SEI, but in the meantime, we have two highly capable interim co-CEOs leading the business. I feel very fortunate to have Stan Reynolds and Doug Rosencrans leading our team in North America. They are working closely together, delivering steady performance and advancing our strategy. We will provide an update as soon as we have new information to share. Now, I'd also like to address the proposed IPO for SEI. The first thing I want to say is that our objective is clear. It is to unlock the intrinsic value of our North American business, position SEI for accelerated growth, and improve shareholder value. At the same time, we are ensuring that the business is fully prepared. We are strengthening leadership, executing the transformation program, and continuing to deliver strong performance. Our approach is and will remain disciplined. The timing of any IPO will be driven strictly by value. We will proceed only when SEI is ready and when market conditions appropriately reflect its strength and potential. That discipline matters even more as we navigate uncertainty in the market and shifts in customer behavior. In this environment, more than ever, we remain focused on being here for our customers. As a result, the earliest timing we are targeting for an IPO is fiscal year 2027. Now, at the same time, let me reiterate, Seven & i remains fully committed to completing the JPY 2 trillion share repurchase program that we previously announced through 2030. Now, beyond Japan and North America, we continue to pursue opportunities globally. We will focus on markets where we believe our value proposition can win. We will refine and strengthen our winning formula, leveraging the lessons from our successful investment in Australia as we expand into new geographies. Let me close with this. The convenience industry is changing fast, and we intend to lead that change. We will stay ahead of our customers. We will remain their first choice for convenience. We will continue to surprise and delight them with better stores, better products, and better service. By doing that, we will create sustainable long-term value for customers, franchisees, shareholders, and all of our stakeholders. In 2026, we will stay on this course and accelerate. We expect continued improvement in same-store sales, margin, and operational performance. We will remain disciplined on costs while continuing to invest for growth. 2026 will be a defining year for us, setting us up for tangible, accelerating profit growth from 2027 onward. Our targets are clear. On an organic basis, we will drive compound annual growth in merchandise sales per store of between 2.5%-3% for SEJ and 3%-5% for SEI through 2030, while delivering 7% compound annual growth in consolidated EBITDA. I am confident that we will deliver on these targets and stay on our growth trajectory. To deliver on this, we will stay agile in how we respond to rapid industry change and in how we lead it. We will continue to review and refine our strategy to ensure that it remains aligned with long-term value creation. I look forward to sharing more on all of this, including the details at our upcoming Investor Day, where we will explain the initiatives in a fair bit of detail, as well as the updates to our transformation plan. Thank you all for your attention. Now let me hand over to Kominami-san to walk us through the results. Good evening, everyone. This is Yoshimichi Kominami from Seven & i Holdings. I will be covering our full year results for fiscal year 2025, as well as our financial forecast for fiscal year 2026. Let me begin with our results for fiscal year 2025. Please look at page 10. These are the highlights of our consolidated results for FY 2025. Group's total sales amounted to JPY 16,992 billion, corresponding to 2092.1% of the previous year and 99.5% of the revised plan. EBITDA was JPY 942.8 billion, representing 94.7% of the previous year and 102.2% of the revised plan. Operating income was JPY 422.9 billion, representing 100.5% of the previous year and 104.7% of the revised plan. Net income was JPY 292.7 billion, representing 169.2% of the previous year and 108.4% of the revised plan. As these figures show, while we recorded a decline in Group's total sales, we achieved profit growth at the operating income level and below. Following the completion of the deconsolidation of York Holdings and 7-PAK last year, Group's total sales and EBITDA fell below the previous year's levels. However, profits at the operating income level and below increased, and we successfully achieved a plan which had incorporated these impacts. Net income exceeded the revised plan target due to the improvement in special gains and losses. Furthermore, aided by the completion by February of share repurchases totaling approximately JPY 600 billion, EPS grew significantly to 178.3% on a year-over-year basis, exceeding the plan target. Additionally, foreign exchange effects had a negative impact of JPY 3.1 billion at operating income. Please take a look at page 11. The chart on the left shows the change in operating income by segment on a year-over-year basis. Operating income for domestic convenience stores, CVS operations, decreased by JPY 11 billion, while overseas CVS operations saw an increase of JPY 5.9 billion. I will go over the results of SEJ and SEI later in the presentation. For the superstore operations, financial services, and others, because operating income through the first half of FY 2025 for companies subject to deconsolidation was included in the consolidated results, there are some irregularities when comparing with the full year results for FY 2024. However, if you look at the results versus the plan, you can see that performance was largely in line with the plan. Eliminations and corporate recorded an increase in profit, mainly due to a review of IT and DX-related developments. As a result, consolidated operating income increased by JPY 2 billion. The chart on the right shows operating income by segment versus the plan. The overperformance of the domestic CVS operations and the upside in the corporate eliminations, partly because of the assumed risk buffer was not needed, largely offset the downside in the overseas CVS operations, where fuel market conditions stabilized in the second half of the fiscal year, and gross profit fell below assumptions, resulting in an outperformance versus the plan of JPY 18.9 billion. Please turn to page 12. I will explain the primary factors behind the significant increase in consolidated net income. This slide shows the year-over-year changes in special gains and losses broken down by factor. The chart on the left shows the change in special gains. Special gains increased by JPY 27.2 billion, primarily driven by gains associated with the deconsolidation of York Holdings. Meanwhile, as shown in the chart on the right, special losses decreased by JPY 135.1 billion, thanks to the completion of the group's structural reforms in fiscal year 2024. Please look at page 13. Now I will explain the results of our major operating companies, starting with SEJ. The chart on the left shows a breakdown of the year-over-year changes in operating income by factor. The chart on the right shows the trend in same-store sales growth. Since May, SEJ has been driving various transformations under the leadership of our new president, Mr. Akutsu. The effects of these initiatives started to bear fruit in the second half of the year. As you see in the chart on the right, our sales momentum has steadily increased. However, SG&A expenses increased by JPY 24.7 billion. This was primarily due to higher cost associated with initiatives to strengthen customer engagement through the strategic launch of new promotions. We also saw an increase in expenses related to the next-generation store system, which is essential for our sustained business growth going forward. As a result, operating income decreased by JPY 13.5 billion on a year-over-year basis. Please refer to page 14. This page shows the results of SEJ's key initiatives for fiscal year 2025. Regarding our fresh food differentiation, the rollout of SEVEN CAFÉ Bakery and SEVEN CAFÉ Tea proceeded as planned. By strengthening the appeal of our just-made counter merchandise in conjunction with promotions, APSD grew by 8.3%. As for our store plan, we strategically leveled out the concentration of new store openings towards the end of the fiscal year, shifting some of them to the first quarter of fiscal year 2026. However, having reviewed our plans for fiscal year 2026 and beyond, we will achieve our target of a net increase of over 1,000 stores by fiscal year 2030. SEJ's transformation plan has finally entered the execution phase. I will explain this in more detail later in the presentation. Please look at page 15. Next, I will explain SEI's performance. As with the SEJ performance slide, the left side breaks down the factors behind the change in operating profit, and the right shows the trend in same-store sales growth rate. Operating profit decreased by $29 million due to merchandise, et cetera. However, as we are optimizing our store network, excluding the impact of strategically executed store closures, merchandise actually increased profit by $42 million. In addition, SG&A contributed a $97 million increase in profit, reflecting the effects of our ongoing cost leadership initiatives. As a result, operating profit increased by $48 million to $2,221,000,000. As shown in the chart on the right, amid the change in consumer environment in North America, the trend is improving, supported by continued promotional initiatives and product promotions that respond to customer preferences. To build on this momentum, we will further accelerate our efforts in FY 2026. Please look at page 16. These are the results of SEI's key initiatives for FY 2025. To differentiate our fresh food offering, we have been expanding the rollout of QSRs and introducing private brand products. We are also moving forward with new store openings, including our new standard store format that enables us to offer these higher value-added products, thereby further strengthening our store network. In addition, 7NOW, which responds to changing consumer behavior in North America, has also been performing steadily. Next, I will explain the financial forecast for fiscal year 2026. Please note that the situation in Iran, geopolitical risks, the impact to our business, there are some uncertainties, and please note that our full-year financial forecasts do not incorporate the potential impact of geopolitical risks on our business, as there is currently a high degree of uncertainty. We will continue to closely monitor the situation and provide updates in a timely manner. Please look at page 18. First, I will explain our consolidated financial forecast for fiscal year 2026. Before going into the numbers, however, allow me to explain two key assumptions underlying the figures I'm about to present. First, with the deconsolidation of York Holdings and Seven Bank completed during fiscal year 2025, fiscal year 2026 will mark our first full fiscal year as a pure convenience store business group. To help you accurately understand the true state of the financial forecasts of our convenience store business group, when explaining the FY 2026 plan, we have presented the FY 2025 actual figures on a like-for-like basis, excluding the impact of deconsolidation. That is, as like-for-like adjusted comparisons, meaning that York Holdings and Seven Bank are regarded as an equity method, so such adjustments are made and a comparison is presented. Second, starting in fiscal year 2026, we will disclose the total merchandise sales of the group's convenience operations as Convenience Store Group Merchandise Sales. The reason why we will disclose the Convenience Store Group Merchandise Sales is because the revenue of 7-Eleven, how you define it will vary the revenue, and it may not reflect the reality. In order to accurately reflect the reality, we need to include the revenue of the franchise and also the group convenience store, the entire merchandise, and the sales to be compared. That is the reason why. In this way, we will be providing the figures for a better understanding. Based on these assumptions, I will now go over the highlights of our consolidated financial forecast for fiscal year 2026. Convenience Store Group Merchandise Sales are projected at JPY 10,030 billion, corresponding to 102.7% of previous year. EBITDA is projected at JPY 891 billion, 102.8% of the previous year. Operating income is projected at JPY 405 billion, 105.3% of the previous year. Net income is projected at JPY 270 billion, 105.9% of the previous year. EPS is projected at 117.42 yen, 113.5% of the previous year. As you can see, we are planning an increase in both sales and profits. Later on, we will walk you through the business strategies for SEJ and SEI. Next is page 19. First, I would like to explain SEJ's profit plan and key initiatives. We will further accelerate our Co-creation Marketing, an initiative we have strengthened since fiscal year 2025, to build ever greater momentum. As explained earlier by Mr. Dacus, to this end, we will proceed with our initiatives by making quality and value our top priorities. We will roll out Just-made products centered around SEVEN CAFÉ Bakery and SEVEN CAFÉ Tea under the Live Meal brand to further enhance their appeal to customers. Additionally, as part of our category strategy, we will strengthen our product proposals tailored to the diversifying lifestyles of our customers. To strengthen our earnings structure. We will structurally transform the value chain that has been built over more than 50 years to achieve further sustainable growth. For cost structure, the business process will be revised and reviewed. Please turn to page 20. I'll repeat in saying we believe that it is essential to further strengthen our management foundation to respond to various changes in the business environment and achieve sustainable profit growth forward. Starting March, we entered the execution phase of the transformation plan, and the effects will begin to materialize. At the core of this plan is a value chain reform, where we will drive fundamental structural reforms across the board, from procurement to manufacturing and logistics. We expect this will increase in flexibility in merchandise development and improve our gross profit margin, while also enhancing our competitiveness in pricing. In addition, we will build store operations that elevate the quality of customer service and strengthen our services and entertainment offerings, thereby achieving growth in sales and gross profit. Regarding SG&A expenses, we will review our management structure from a zero-based perspective, including headquarters and IT-related costs, and vigorously push forward with initiatives aimed at optimization. Please take a look at page 21. Next, I will explain SEI's profit plan and key initiatives. Supported in part by the impact of the key initiatives we have been implementing in 2025, momentum in merchandise is on a recovering trend. In FY 2026, with the aim of further growing merchandise sales and expanding gross profit amounts, we will continue to elevate the customer experience by expanding our proprietary product lineup and upgrading existing stores. We will also accelerate franchising while advancing the modernization of our store network. At the same time, we will strengthen cost control and steadily deliver profit growth. We are currently updating the transformation plan. In doing so, we will directly address the fundamental challenges SEI is facing and incorporate initiatives aimed at resolving them so that we can better reap the benefits of transformation. We will face the issues that SEI is facing, and we will make progress to reap the benefits. This is an initiative that will significantly change customers' perception of 7-Eleven in North America, and we'll explain the details at IR Day on April 23rd. Please take a look at page 22. This page outlines our approach to shareholder return. As Mr. Dacus mentioned in his opening remarks, while the IPO of SEI has been postponed, our shareholder return policy remains completely unchanged. Under our progressive dividend policy, we plan to increase the annual dividend by JPY 10 to JPY 60 per share for fiscal year 2026. Regarding the total JPY 2 trillion share repurchase program through fiscal year 2030, we have JPY 1.4 trillion remaining after executing JPY 600 billion last fiscal year. We are currently finalizing the details for this fiscal year's repurchases, and we will disclose the information as soon as it is decided. Please turn to page 23. Including the initiative discussed today, we will pursue sustainable EPS growth and the creation of shareholder value through the solid business growth, the execution of fundamental transformation, and disciplined capital allocation. Following today's presentation at our IR Day, scheduled for April 23rd, our business leaders will explain their specific strategies in more detail from a medium to long-term perspective. We look forward to continuing our constructive dialogue with all of you. This concludes our presentation for today. Thank you for your time.