GS Home Shopping, 2Q Earnings Surprise... Strong Sales of Health Supplements and Air Conditioners

Cost Reduction Amid Changing COVID-19 Situation
Overall Product Handling Volume Also Increases

[Asia Economy Reporter Minyoung Cha] GS Home Shopping posted operating profit at an earnings surprise level through cost-cutting strategies amid the COVID-19 pandemic in the second quarter. Sales of certain products such as health functional foods and air conditioners also increased, boosting transaction volume.

GS Home Shopping announced on the 6th that its operating profit for the second quarter of this year reached 41.5 billion KRW, up 27.3% compared to the same period last year. Although sales decreased by 2.0% to 304.3 billion KRW, net profit for the period increased by 11.5% to 30.4 billion KRW.

The increase in operating profit was largely due to reduced operating expenses from cuts in marketing costs and external expenditures. This result exceeded the initial securities market consensus (average estimate) by 18.6%, marking a performance beyond expectations.

Transaction volume also rose by 1.3% year-on-year to 1.1341 trillion KRW. Amid increased sales of health foods due to COVID-19, household products such as window-type air conditioners gained popularity during the heatwave in June. On the other hand, the main sectors of beauty and fashion accessories underperformed as customer consumption patterns changed due to the pandemic.

By channel, growth centered on mobile continued. Mobile shopping transaction volume recorded 644.5 billion KRW, up 8.9% year-on-year, accounting for 56.8% of the total. Meanwhile, TV shopping transaction volume fell 6.2% to 391.2 billion KRW due to mobile shopping and cannibalization effects.

Meanwhile, GS Home Shopping is strengthening its data-driven customer analysis capabilities. As of the second quarter, the number of mobile shopping app downloads surpassed 37.2 million excluding duplicates. Additionally, the company plans to enhance its venture network to seize opportunities for mergers and acquisitions (M&A) and new technology acquisition, and to discover and nurture new business models with growth potential.

This content was produced with the assistance of AI translation services.