IBK Securities said on the 19th that GS Retail's fourth-quarter results are expected to improve on the back of growth in its convenience store division. It kept its Buy rating and raised its target price to 27,000 won from 23,000 won. GS Retail's previous trading day closing price was 21,850 won.
Nam Seong-hyeon, an analyst at IBK Securities, said GS Retail is likely to post strong fourth-quarter results, citing the impact of consumer coupons and last year's low base, fixed-cost savings from closing unprofitable stores, and growth in the supermarket business due to the different timing of the Chuseok holiday.
Nam estimated GS Retail's fourth-quarter consolidated revenue at 3.0233 trillion won and operating profit at 52.9 billion won. That would be up 2.1% and 90.5%, respectively, from a year earlier.
However, new store openings are expected to be limited. Nam said, "With sluggish consumer sentiment and worsening franchisee profitability, improving operating efficiency is not easy," adding, "Rather than expanding openings, the situation leaves no choice but to focus on improving store efficiency."
Store rationalization is expected to continue through the first half of next year. Nam added, "Thanks to the store adjustment effect, profit growth in the convenience store division will continue through the first half of 2026," but "it is inevitable to grapple with a mid- to long-term growth strategy."