UPDATE 1-Japan’s Seven & I forecasts modest profit recovery

* Forecasts op profit up 6 pct at 240 bln yen for 2010/11

* Op profit falls 20 pct to 226.7 bln yen in 2009/10

* Seven & I shares end down 1.7 pct before results
(Recasts, adds details)

By Taiga Uranaka

TOKYO, April 8 (BestGrowthStock) – Seven & I Holdings (3382.T: ) on
Thursday forecast 6 percent growth in operating profit for the
year started in March as Japan’s largest retailer slashes costs
and hopes for a recovery in consumer spending.

The firm is among the first major retailers to report annual
results for a year marked by sliding sales and a fierce price
war.

Market participants are closely watching for signs that Seven
& I and its rivals are over the worst of the retail slump and
that a recent export-led economic recovery in Japan will
eventually trickle down to most consumers.

Seven & I, which runs over 12,000 Seven-Eleven convenience
stores in Japan and thousands more overseas, said operating
profit fell 20 percent to 226.7 billion yen ($2.4 billion) for
the year just ended in February.

Early last month, the firm flagged that it would likely
report weaker earnings than it had previously estimated, saying
cost-cutting efforts had failed to offset sales falls.

Seven & I suffered as thrifty consumers shied away from
designer clothes at department stores, hunted for bargains at
supermarkets and were less inclined to make impulse purchases at
convenience stores.

The company forecast an operating profit of 240 billion yen
for the year just began, slightly below a mean estimate of 246.1
billion yen in a poll of 15 analysts by Thomson Reuters I/B/E/S.

Before the results, shares of Seven & I closed down 1.7
percent at 2,314 yen. The stock is up 2 percent over the past
year, underperforming a 30 percent rise in the benchmark Nikkei
average (.N225: ).

Stock Report

(Reporting by Taiga Uranaka; Editing by Valerie Lee)

UPDATE 1-Japan’s Seven & I forecasts modest profit recovery