Seven & I H1 profit falls 20 pct, keeps outlook

TOKYO Oct 1 (Reuters) - Japan's largest retailer Seven & I Holdings (3382.T) posted a 20 percent drop in first-half operating profit on Thursday as it struggles with a sharp sales decline amid weak consumption and kept a recently revised-down forecast.

It is the first to report earnings among Japan's major retailers, which remain in a slump even as the country's economy crawls out of recession, with record deflation and rising job losses dampening hopes for a speedy recovery.

The company, which has over 12,000 Seven-Eleven convenience stores in Japan and runs or licenses out thousands more overseas, said March-August operating profit was 118.14 billion yen ($1.3 billion), down from 148.01 billion yen a year earlier.

Seven & I supermarkets and department stores remained a drag on the retail conglomerate, suffering as a growing number of thrifty consumers cut back spending on non-daily items such as clothes or seek out bargains instead.

For the full-year ending in February, the company kept its forecast of a 250 billion yen operating profit, down 11 percent from a year earlier and in line with a mean forecast of 249 billion yen in a poll of 17 analysts by Thomson Reuters I/B/E/S.

Last month, the company cut its full-year operating profit forecast by 12 percent. [ID:nT74966]

Seven & I shares have about tumbled 30 percent this year, underperforming a 15 percent rise in the Nikkei average .N225. (Reporting by Taiga Uranaka; Editing by Dhara Ranasinghe)