[Edaily Reporter KIM YOON-JEONG ] KIWOOM Securities assessed that GS Retail(007070)is seeing continued earnings improvements across all business divisions—including convenience stores, supermarkets, and home shopping—driven by the recovery in domestic consumer spending. The firm raised its target price to 35,000 won, up from the previous level.

On the 10th, Park Sang-jun, an analyst at KIWOOM Securities, stated, “Strong domestic consumer sentiment has sustained robust sales across major business segments, and subsidiaries such as GS Networks have also shown steady performance improvements.” He added, “While there are short-term concerns about a decline in foot traffic due to the heat wave, we believe that visibility for performance improvement is improving in the medium term as threats from competing business models ease.”
GS Retail’s second-quarter consolidated operating profit reached 109.4 billion won, a 27.5% increase year-over-year, slightly exceeding market consensus.
In the convenience store segment, operating profit rose 21% year-over-year, driven by growth in same-store sales and an improved product mix. Same-store sales increased by 7.5% overall and by 9.2% when excluding tobacco products.
In the supermarket segment, operating profit increased as same-store sales rose by 5.2% and the impact of new store openings was factored in. In the home shopping segment, although total sales volume decreased, both net sales and operating profit increased year-over-year as the proportion of high-margin physical goods sold expanded. The Common and Other segment also returned to profitability, driven by improved performance from subsidiaries such as GS Holdings and the Development Business Division.
KIWOOM Securities forecasts that consolidated operating profit for the third quarter will reach 120.9 billion won, a 9% increase year-over-year.
Analyst Park stated, “Considering the strong sales in the second quarter, same-store growth for convenience stores is expected to remain solid at around 3% in the third quarter as well,” but added, “Since there are concerns about a decline in foot traffic due to the heat wave in August, we need to closely monitor the short-term impact of the weather on performance.”
He added, “The strengthening market positions of the top one or two players in the convenience store sector and the slowing growth in the number of competing retail formats within local commercial districts are positive factors for medium- to long-term profitability.”
KIWOOM Securities also forecast that supermarkets and home shopping channels are expected to see sales growth driven by strong domestic consumer sentiment, and that the performance of subsidiaries—led by GS Holdings—will continue to improve.