IBK Securities announced on August 11 that GS Retail has met market expectations for its second-quarter performance and is expected to continue its growth into the third quarter. As a result, the firm has raised its target price for GS Retail to 35,000 won while maintaining a 'buy' rating.
Nam Seong-hyun, a researcher at IBK Securities, stated in a report that "GS Retail's positive performance is attributed to improvements across all business divisions."
In the convenience store segment, GS Retail reported a same-store sales growth rate of 7.5% and an operating profit of 71.4 billion won, marking a 12.4% increase compared to the same period last year. Nam explained that the improvement in performance is due to enhanced efficiency from store scrapping, increased sales of seasonal products, and a rise in foreign customer sales.
Additionally, the supermarket division recorded a same-store sales growth rate of 5.2%, with both customer traffic and average transaction value increasing. Analysts noted that the stable growth was supported by the opening of new stores and an expanded share of online and offline purchases centered around quick commerce.
Nam projected that while the same-store sales growth rate for convenience stores may decline in the third quarter compared to the second quarter, the increase in foreign demand and continued operational efficiency will sustain profit growth. He forecasts that GS Retail will achieve sales of 3.3084 trillion won (up 3.2% year-on-year) and an operating profit of 119.5 billion won (up 7.5% year-on-year).
* This article has been translated by AI.
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