* Sept-Nov operating profit up 7.4 pct at 56.4 bln yen
* Keeps 2010/11 outlook at Y240 bln, in line with consensus
* Pressure mounting for shake-up of supermarket operations
* Shares on Thursday rise to highest in more than 7 months (Adds analysts' comments, details)
By James Topham
TOKYO, Jan 6 (Reuters) - Seven & I Holdings, Japan's top retailer, posted a 7.4 percent rise in quarterly operating profit, helped by higher revenue from its core convenience store segment, and kept its annual outlook unchanged, as expected.
The company is under pressure, however, to close underperforming supermarkets, which have reaped few benefits from a pick-up in consumer spending, and investors are now focusing on quick progress by the company to boost its profit growth.
Pent-up demand from shoppers who made sharp spending cuts against a weak economic backdrop is expected to have boosted retailers' profits in the latter part of 2010. Cost-cutting measures have also helped, analysts say.
Seven & I, which operates, franchises or licenses about 39,000 convenience store outlets worldwide, including Japan's No.1 chain, Seven-Eleven, reported a September-November operating profit of 56.4 billion yen ($677.5 million).
But with weak performing general merchandise stores dragging on its results, industry watchers are looking towards an analyst briefing on Thursday for comments on plans to shut supermarkets following a media report last month that it would cut the number of stores in half.
"If it really halves the number, for instance within three years, I would review my 'neutral' rating for the company's stock for possible upgrading," said Naozumi Nishimura, a retail-sector analyst at research firm TIW in Tokyo.
"If the timeframe is five to seven years, it would be a different story."
RISING PRICES
Seven & I, which competes with retail conglomerate Aeon Co Ltd, kept its operating profit forecast for the business year to February 2011 at 240 billion yen. This is in line with the average forecast in a survey of 17 analysts by Thomson Reuters I/B/E/S.
Japan's retailers have been grappling with weak economic growth, falling consumer prices and an ageing and declining population, and now rising worldwide prices of food and commodities look to hit margins further.
"Seven & I and Aeon are both trying to lower costs of buying materials (for their shops), but with the current situation it doesn't look like it's going to be an easy task for them," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
Still, there are some positive signs and the Bank of Japan expects economic growth to pick up modestly this year.
Stronger economic sentiment in Japan and efficiency enhancements at its key convenience stores should lift operating profit at least 10 percent in 2011, the Seven & I's president told Reuters in an interview last month.
Seven & I shares rose to their highest level in more than seven months ahead of the earnings report and settled 1.9 percent higher against a 1.4 percent rise in the broader market.
They rose 14 percent last year, outperforming a 3 percent decline in the benchmark Nikkei average. ($1=83.24 Yen) (Additional reporting by Antoni Slodkowski and Yumiko Nishitani in Tokyo and Arada Kultawanich in Bangkok; Editing by Dhara Ranasinghe and Edmund Klamann)