Kyobo Securities said on the 28th that E-MART(139480)'s operating profit in the second quarter this year will miss market expectations due to the fallout from weak earnings at its subsidiary Starbucks. It maintained a "buy" investment opinion but lowered the target price to 110,000 won from 130,000 won.
According to Kyobo Securities, E-MART's consolidated sales in the second quarter of 2026 are estimated at 682.97 billion won, down 3.0% from a year earlier, and operating profit at 19.6 billion won (operating margin 0.3%), down 9.2%. This is below the market consensus of 56.3 billion won (FnGuide).
Jang Min-ji, an analyst at Kyobo Securities, said, "The main reason for the shortfall versus market expectations is attributable to weak earnings at Starbucks," adding, "Starbucks is expected to post second-quarter sales of 687.5 billion won, down 13.6% from a year earlier, and swing to an operating loss of 12.8 billion won due to slower customer traffic stemming from marketing issues and the cancellation of the previously scheduled 'Summer e-Frequency' promotion."
However, E-MART's standalone core business fundamentals are assessed to be holding steady. In the second quarter this year, E-MART's standalone total sales are projected at 4.4425 trillion won, up 3.5% from a year earlier, with operating profit surging 98.8% to 31 billion won. Comparable sales grew across all channels—discount stores (3.8%), Traders (4.7%), and Everyday (10.6%). Strong appliance sales, improvements in the food segment, and a recovery in customer numbers drove the results.
Kyobo Securities projected that earnings momentum will strengthen again starting in the third quarter this year.
Jang said, "The target price cut is due to lowered earnings estimates for Starbucks, but earnings momentum will strengthen again from the third quarter," adding, "With the Chuseok holiday moved up to September this year, the holiday effect will be fully reflected in third-quarter results, and the recovery in customer numbers from easing competition will also continue."
Jang added, "Most of the base effects related to the Starbucks frequency event are likely to dissipate in July, so if a recovery in Starbucks sales is confirmed, concurrent improvements in the core business and subsidiaries are expected."