GS Retail Completes Transformation... Convenience Stores and Supermarkets Drive Growth [Click e Stock]

Eugene Investment & Securities stated on July 22 that a turnaround in performance is expected for GS Retail, maintaining a target price of 34,000 won and a "Buy" investment rating.

In a report issued that day, Haeni Lee, an analyst at Eugene Investment & Securities, estimated that GS Retail’s consolidated sales for the second quarter of this year would reach 3.1267 trillion won, up 4.9% from the same period last year, and operating profit would rise 19.4% to 100.9 billion won. She noted, "Domestic consumption stimulus and increased inbound demand are expected to create sales leverage effects. Combined with a low base effect, strong growth is anticipated."

By business division, convenience store sales are expected to increase by 4.9% year-on-year to 2.3351 trillion won, with operating profit rising 8.0% to 63.7 billion won. The analyst explained, "The improvement in same-store sales growth is due to last year's restructuring of many underperforming stores in the first and second quarters," adding that "sales from newly opened stores are solid, which should reduce the burden of fixed costs."

The supermarket division is forecast to see sales rise 9.6% year-on-year to 468 billion won, and operating profit surge 53.4% to 8.3 billion won. The analyst stated, "Indicators such as customer traffic and average transaction value are all responding positively, reflecting the benefits of Homeplus closures and enhanced promotional activities."

For the home shopping division, both sales and operating profit are expected to increase by 1.8% year-on-year, with sales at 270.8 billion won and operating profit at 25.7 billion won. Profitability is expected to be defended through a focus on high-margin products.

The analyst concluded, "With the domestic consumption environment improving and underperforming stores and deficit-generating divisions being addressed, the trend of performance improvement is expected to continue."

This content was produced with the assistance of AI translation services.