Japan’s Seven & I Holdings, the world’s largest convenience store operator, reported a nearly 20 per cent fall in first-quarter operating profit on Thursday.

Profit fell to US$590.70 million for the three months ended May 31 from $739.4 million in same period a year earlier.

The company, which owns the 7-Eleven convenience-store brand worldwide, maintained its full-year profit forecast at $3.7 billion for the year ending February 2024, compared with an average estimate of $3.7 billion, based on a Refinitiv poll of 16 analysts.

Seven & I said its May-quarter profit fell due to a rebound from historically high fuel profits at its Speedway gas station business in the US, which it acquired in 2021. The company had booked record profits in the year ended February 2023.

However, activist investors have called for overhauling its conglomerate structure, which, they argue, has depressed its share price.

Investment fund ValueAct Capital, which bought a 4.4 per cent stake in Seven & I in 2021, proposed a spin-off of the 7-Eleven chain in January and later recommended the replacement of four directors, including president Ryuichi Isaka.

Seven & I’s management has resisted these calls until now.

Mio Kato, the founder of LightStream Research, said it is very difficult for activists to force change before management is ready and that Seven & I has steadily improved its governance and efficiency.

“It doesn’t mean that there’s no change, just that the pace of change is different,” he said.

Seven & I shares have gained 64 per cent since the start of 2021 but have lagged the benchmark Nikkei 225 in 2023, rising 9.1 per cent compared with the index’s 22.4 per cent climb.

• Reporting by Anton Bridge; Editing by Tom Hogue and Janane Venkatraman, of Reuters.