GS Retail Reports Record Q3 Operating Profit of 132.1 Billion Won Driven by SSM and Home Shopping

GS Retail reported an operating profit of 132.1 billion won for the third quarter of this year, marking the highest quarterly performance in its history. Although the operating profit from its core convenience store business declined, the corporate supermarket (SSM) and home shopping segments achieved double-digit profit growth, boosting overall results.
 
On November 4, GS Retail announced that its consolidated operating profit for the third quarter reached 132.1 billion won, an 18.9% increase compared to the same period last year. This figure represents the largest quarterly operating profit to date. Revenue rose to 3.33 trillion won, up 3.4% year-on-year, while net profit fell 44.7% to 49.9 billion won.
 
The improvement in performance was driven by SSM GS The Fresh and home shopping GS Shop. GS The Fresh reported third-quarter sales of 527.7 billion won, a 14.9% increase from the previous year. Its operating profit soared to 23.9 billion won, a remarkable 159.8% increase. Both sales and operating profit set new quarterly records.
 
This growth is attributed to the simultaneous expansion of store numbers and increased sales at existing locations. As of the end of September, the number of GS The Fresh stores reached 608, an increase of 27 from the previous year. Same-store sales also grew by 10.7%. Notably, quick commerce sales surged by 52.2%, accounting for 10.1% of total sales for the first time.
 
Home shopping GS Shop also saw significant profitability improvements. Third-quarter sales reached 253.2 billion won, a 2.3% increase from the same period last year, while operating profit jumped 108.6% to 24.2 billion won. This marks the fourth consecutive quarter of performance improvement since the fourth quarter of last year.
 
Sales of exclusive beauty products like 'Tone28' and fashion brands such as 'Core Authentic' and 'Jason Wu' performed well, leading to a 17% increase in sales of exclusive items. The company is also expanding its sales strategy that integrates TV, mobile, and social media, along with enhancing AI-based shopping services.
 
In contrast, the convenience store segment GS25 experienced a decline in operating profit despite revenue growth. Third-quarter sales reached 2.47 trillion won, a 1.1% increase year-on-year, marking a record high for the quarter. However, operating profit fell by 8.1% to 78.2 billion won.
 
Same-store daily sales increased by 2.3%. GS Retail attributed revenue growth to its 'scrap and build' strategy, which involves relocating stores to prime locations or expanding store sizes, as well as strengthening fresh food sales.
 
As of the end of September, the number of fresh-focused stores increased to 1,074. Sales of fresh produce rose by 66.4%, while meat sales increased by 29.9%. Revenue from foreign tourists also surged by 69.4%, and quick commerce sales grew by 86.9%.
 
GS Retail views the expansion of its profit-generating structure beyond convenience stores to include supermarkets and home shopping as a key achievement of this performance. However, the decline in convenience store operating profit remains a challenge for restoring profitability in its core business.
 
A GS Retail representative stated, "We have achieved a transformation that broadens our profit structure by enhancing competitiveness across convenience stores, supermarkets, and home shopping through differentiated products and services centered on customer needs, as well as operational innovations. We will continue to strengthen our core competitiveness and pursue growth."