[Click eStock] "BGF Retail, Upcoming Peak Season... 2Q Earnings Estimates Slightly Exceeded"

[Asia Economy Reporter Lee Jung-yoon] Korea Investment & Securities maintained a buy rating and a target price of 235,000 KRW for BGF Retail on the 20th, stating that the recovery of the ready-to-eat food category will accelerate alongside an increase in foot traffic.

BGF Retail's sales for the second quarter of this year are estimated at 1.9005 trillion KRW, up 11.8% year-on-year, and operating profit is expected to reach 75.6 billion KRW, up 28.8%. Both sales and operating profit slightly exceeded market expectations. Although the effect of diagnostic kits sold at convenience stores has disappeared, the impact of product price increases and increased foot traffic was observed.

With the normalization of school attendance starting in March and the outdoor mask mandate lifted from May, the convenience store industry in the second and third quarters is expected to experience a peak season similar to the pre-COVID-19 period. Kim Myung-joo, a researcher at Korea Investment & Securities, explained, "The decline in customer numbers in the convenience store industry during the COVID-19 period was driven by students' remote classes and reduced foot traffic due to social distancing regulations, which led to a decrease in customer visits."

He added, "From May, all factors that caused the decline in customer numbers in the convenience store industry have disappeared. Recently, with the full reopening, outings and leisure activities have increased significantly. Although the growth in alcoholic beverage sales, which benefited from COVID-19, will slow down, the increase in sales of ready-to-eat foods and beverages will more than offset this."

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