* Q3 operating profit rises 4.8 pct to 69.2 bln yen
* Keeps annual op profit outlook at record 308 bln yen
* Shares jump 14 pct in 2012 vs. 23 pct benchmark surge
By James Topham
TOKYO, Jan 8 (Reuters) - Seven & I Holdings Co's quarterly operating profit rose 4.8 percent as higher profits from its core 7-Eleven stores were supported by stronger income figures at other retail formats, leading the Japanese firm to maintain its record annual outlook.
The parent company for the world's largest convenience store chain saw its revenue rise for the first time in nine quarters, behind efforts to cut costs and expand its convenience store network, in addition to its efforts to boost its appeal to new customer demographics in Japan.
Japanese convenience stores are increasing the variety of their merchandise, including adding cooking oils, fresh vegetables and lower-priced, private-brand items to shelves as they work to attract non-traditional customers like women and the elderly.
But the change in buying patterns has weighed on operators of general merchandise stores and supermarkets, forcing them to cut operating costs and lower prices as persistent deflation saps profits and a falling population shrinks the pool of customers.
Seven & I reported a September-November operating profit of 69.2 billion yen ($789 million) on Tuesday, its first quarterly rise in three quarters, as higher profits from convenience stores were supported Ito-Yokado general merchandise stores and York-Benimaru supermarkets, which both swung to profit for the quarter.
Improvements in profit margins and increased apparel sales lifted quarterly profits at Ito-Yokado, while York-Benimaru benefited from lower base-year levels for the quarter than the first half of the business year, which had been inflated by the 2011 earthquake and tsunami in northern Japan, where the chain is based, a Seven & I spokesman said.
The merchant also lifted its annual dividend forecast to 64 yen for the year to March 2013 from its earlier estimate of 62 yen as part of its target to increase consolidated payout ratio in lines with profit growth.
Seven & I, which competes at home with Aeon Co and Seiyu Group, the Japanese arm of Wal-Mart Stores, maintained its record 308 billion yen operating profit forecast for the year to February, which is in-line with analyst views for Japan's largest general retailer in terms of market capitalization.
In the near term, falling wages, employment worries, and a mild recession in Japan are expected to continue limiting sales growth and pricing power for merchants in the world's second-largest retail market.
Emphasising the low level of growth at home, Japanese retail sales ticked up 1.3 percent year-on-year in November, the highest percentage gain in six months, government data showed late last month.
To offset this Seven & I is working to expand its U.S. convenience store network, including via acquisitions, and is looking to add more than 600 stores in the world's biggest consumer market this financial year.
Last year, Seven & I, which gets nearly a quarter of its group revenue from its North American business, acquired the assets of San Antonio, Texas-based gas station operator Tetco as well as 55 Sam's Mart stores in North and South Carolina.
In addition, Japanese retailers have increased their offerings of higher profit margin and lower priced private-label goods to offset Japan's demographic changes.
Last month, Seven & I announced plans to boost house-brand goods sales to 1 trillion yen by it 2015 business year, about 50 percent higher from its target for the current business year.
Seven & I is among the first of Japan's blue-chip companies to give annual forecasts. Other major retailers slated to issue results later this week are top supermarket operator Aeon and Uniqlo-owner Fast Retailing Co.
Familymart Co, Japan's No.3 convenience store chain, also said on Tuesday operating profit for the September-November quarter dipped 2.6 percent to 10.2 billion yen.
Seven & I shares jumped 14 percent in the 2012 calendar year, against a 23 percent surge in the benchmark Nikkei average . Before the earnings announcement, shares of Seven & I closed down 0.6 percent compared to the Nikkei's 0.9 percent fall.