[Edaily Reporter Kim Hyung-il ] NH INVESTMENT & SECURITIES maintained its “Buy” (BUY) rating and target price of 180,000 won for BGF Retail(282330), noting that while revenue growth slowed in the third quarter of this year due to base effects from the distribution of consumer coupons aimed at economic recovery, the company continued to show a steady increase in operating profit. The firm forecast that revenue growth and profit improvement would accelerate again starting in the fourth quarter as the base effects subside.

On the 6th, Joo Young-hoon, an analyst at NH INVESTMENT & SECURITIES, reported that BGF Retail’s third-quarter consolidated revenue and operating profit were 2.5152 trillion won and 100.8 billion won, respectively, representing year-over-year increases of 2.1% and 3.2%. Both figures were in line with previous estimates.

Same-store sales growth for the third quarter stood at 0.9%. General merchandise sales rose 1%, while tobacco sales increased 0.6%. Same-store sales growth had temporarily slowed due to a combination of the base effect from the distribution of “Livelihood Recovery” consumption coupons in the same period last year and unfavorable weather conditions. Since these coupons could only be used at convenience stores among major retail formats, they acted as a relatively significant base effect on this year’s performance.

However, analysts assess that this is unlikely to be attributed to issues with consumer demand or business fundamentals. Since the base effect from the distribution of the consumption coupons will disappear starting in the fourth quarter, same-store sales growth is expected to recover.

Cost efficiency was also viewed positively. Although the burden of increased depreciation expenses resulting from the completion of the Busan logistics center was partially reflected, cost improvements outweighed this impact. The average gross profit margin also improved by 0.4 percentage points compared to the same period last year. This was because sales growth was higher for general merchandise—which is more profitable—than for cigarettes, which have relatively lower margins.

Analyst Ju projected that BGF Retail’s consolidated operating profit for 2026 would reach 294.5 billion won, a 15.9% increase year-over-year. He noted that it is significant that operating profit, which had stagnated over the past four years, is set to return to a growth trajectory starting this year.

Analyst Ju stated, “As the growth momentum in earnings has begun to reaffirm itself, the downward pressure on valuations—which had intensified due to past concerns over slowing growth—is expected to ease,” adding, “The improvement in profits is expected to be driven by a recovery in same-store sales and reduced pressure from rising depreciation expenses.”