[Click eStock] "GS Retail Expected to Perform Relatively Well in Q1 Due to Expansion of Nearby Purchases"

[Asia Economy Reporter Eunmo Koo] Ebest Investment & Securities expects GS Retail's first-quarter performance stability to be relatively highlighted this year as local purchasing expands due to the novel coronavirus disease (COVID-19) issue.

On the 26th, Orin Ah, a researcher at Ebest Investment & Securities, estimated in a report that GS Retail's K-IFRS consolidated sales for the first quarter of this year would increase by 2.5% year-on-year to KRW 2.1338 trillion, and operating profit would increase by 12.7% to KRW 24.1 billion. Researcher Oh analyzed, "The convenience store sector is believed to have experienced an increase in unit price driven by mask demand due to COVID-19 in January and February this year, which likely somewhat offset the decline in customer numbers." Accordingly, it is diagnosed that the same-store sales growth rate for January and February was around 0 to 1%.

Furthermore, although March is estimated to have a decline in customer numbers compared to January and February due to a decrease in floating population, a gradual recovery is expected mainly in stores located in residential and office areas. Researcher Oh said, "This year, the convenience store openings aim for a net increase of about 800 stores, and the net increase in the first quarter is planned according to existing store opening demand, so it is judged to be proceeding as scheduled despite the impact of COVID-19."

Due to panic buying caused by COVID-19 and preference for local shopping, supermarket performance in the first quarter is expected to improve. Researcher Oh predicted, "GS Retail has continued to close underperforming stores and restructure store operations to reorganize the supermarket sector, and combined with this effect, the same-store sales growth rate in the first quarter of this year is expected to record a positive figure."

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