Seven & i Holdings, the owner of 7-Eleven, sold 110 billion yen of unsecured domestic bonds on Oct. 23, paying as much as 3.568% a year for 10-year money, according to a company filing. The deal comes after a first half in which the group's North American stores lifted profit while its home convenience-store chain went backward.

For investors in Asia, the bond terms are a useful price check on what a highly rated Japanese consumer company now pays to borrow at home. Seven & i's three-year tranche carries a 2.435% coupon, and with the Bank of Japan holding its policy rate at 1.25%, the cost of funding a retail empire in yen has risen.

Seven & i bond terms

The filing shows three tranches, all sold by public subscription and paid on Oct. 29:

• 40 billion yen due October 2029 at 2.435%
• 50 billion yen due October 2031 at 2.848%
• 20 billion yen due October 2036 at 3.568%

Seven & i said it will use the money to redeem bonds, repay bank loans and fund working capital. Rating and Investment Information rates the notes AA-, and Japan Credit Rating Agency rates them AA. Nomura Securities, SMBC Nikko Securities, Mitsubishi UFJ Morgan Stanley Securities and Mizuho Securities underwrote the sale. The board approved the issue on Oct. 8, the same day the company reported first-half results.

The balance sheet has been busy. In the six months to Aug. 31, Seven & i bought back 400 billion yen of its own shares and issued 300 billion yen of new shares through a third-party allotment, a net repurchase of 100 billion yen, according to its results release. It said cumulative buybacks since the 2025 fiscal year have reached 700 billion yen, part of a plan to repurchase 2 trillion yen of stock by 2030.

7-Eleven profit shifts to North America

On a like-for-like basis, which strips out the deconsolidated York Holdings supermarket businesses and Seven Bank, first-half operating income rose 36.6% to 232.2 billion yen. Net income attributable to shareholders climbed 17.8% to 124.4 billion yen, and revenue from operations rose 16.3% to 5.46 trillion yen.

The gain came almost entirely from abroad. Operating income at 7-Eleven Inc., the North American arm, rose 45.8% to $1.32 billion, which the company credited to favorable fuel market conditions and progress in vertical integration. U.S. same-store merchandise sales rose 0.6%, and merchandise gross margin widened 0.3 percentage point to 33.5%. Sales at 7NOW, the delivery service, grew 15.6% to $550 million, putting it ahead of a $1.1 billion full-year target.

Chief Financial Officer Tetsuya Takagi said upgraded open-air cases and more hot food were lifting basket sizes, according to C-Store Dive. U.S. same-store fresh-food sales fell 0.3% in the second quarter, an improvement from a 3.9% drop in the first, citing the earnings presentation. It said 7-Eleven had closed 162 stores and opened 69 so far this fiscal year, against a plan to close 200 and open 205.

Japan was weaker. Seven-Eleven Japan's same-store sales rose 1.1%, with freshly prepared counter food contributing 0.9 percentage point, but its operating income fell 9.3% to 110.2 billion yen. The company pointed to higher system-related costs, advertising and other expenses, and said the impact of higher system-related expenses should moderate from the fourth quarter onward. Merchandise gross margin was flat at 31.8%.

The quarterly split is starker. In the June to August quarter, domestic convenience-store operating income fell 14.3% from a year earlier to 57.7 billion yen, while the overseas business rose 18.7% to 84.8 billion yen, the company's data book showed. Group operating income for the quarter was 127.2 billion yen, 11.2% below the reported figure a year earlier but 3.6% higher on the adjusted basis.

Seven & i forecast and what comes next

Seven & i kept its full-year guidance: operating income of 425 billion yen, net income of 278 billion yen and revenue from operations of 10.43 trillion yen for the year ending Feb. 28, 2027. First-half operating income covers about 55% of that target. President and Chief Executive Stephen Dacus said in the release that the company is holding its outlook and will focus on executing its transformation plan.

The next leg depends on Japan. The company has signed partnerships with SoftBank, PayPay, LY Corp. and Sumitomo Mitsui Card, and Takagi said promotions start in the second half, with customer ID integration and a store loyalty program planned for the next fiscal year. The group says it serves about 20 million customer visits a day across more than 20,000 stores. Japanese household spending is a headwind: retail sales fell for a second month in September.

Shareholders are due an interim dividend of 30 yen, with a planned year-end payment of 30 yen for an annual total of 60 yen.