Japanese retail giant Ito-Yokado has reduced its interim group net profit forecasts by 59%.

Ito-Yokado, which runs the 5,800-strong US convenience store chain 7-Eleven and operates more than 9,000 7-Eleven stores at home in Japan, said it now expects to report group net profit of ¥7bn (US$57m) for the half year to 31 August. This is a significant downtrend from the ¥17bn forecast as recently as May, and the ¥35.6bn profit posted last year.

The company blames the downturn on higher than expected costs from upgrading stores as its overhaul project ran ahead of schedule. Ito-Yokado planned to renovate 40 outlets during the current year ending in February, but it completed 36 of those projects in the March to August period.

The strength of the yen has also impacted sales generated by the group’s US arm. The revision is Ito-Yokado’s second in three months after it cut half-year and full-year estimates in May to account for a one-time loss related to the sale of troubled bulk-goods discount unit Daikuma, reported Reuters.