Withdrawal from Underperforming Business a 'Masterstroke'... GS Retail Smiles with Last Year's Performance

Operating Profit Up 12.4% Year-on-Year
Non-Core Businesses Like GS Fresh Mall and Tenbyten Streamlined
GS25 Convenience Store Operating Profit Jumps 22%

GS Retail's operating profit last year improved as its core businesses, including convenience stores and supermarkets, showed strong performance.

GS Retail announced on the 6th that its consolidated operating profit for last year was tentatively estimated at 405.014 billion KRW, up 12.4% from the previous year. During the same period, sales grew 5.3% to 11.6125 trillion KRW, while net profit decreased by 48.1% to 24.703 billion KRW.

GS Retail CI. [Image provided by GS Retail]

In the fourth quarter of last year, GS Retail's operating profit was 91.416 billion KRW, down 13.7% compared to the same period last year. Sales during the same period reached 2.9317 trillion KRW, up 2.9%. Net loss for the period was 118.614 billion KRW.

Regarding the fourth-quarter results, GS Retail explained, "Sales and operating profit of core businesses such as convenience stores and supermarkets both increased," adding, "The withdrawal from non-core businesses like GS Fresh Mall and 10x10 strengthened the stability and fundamentals of our main operations."

By business segment, profits increased in core divisions such as convenience store GS25 and supermarket GS The Fresh. When combining the results of GS25 and GS The Fresh, sales increased by 97.6 billion KRW compared to the same period last year, and operating profit improved by approximately 11.4 billion KRW.

GS25 saw an increase in the number of stores as well as sales of differentiated products. GS25's sales in the fourth quarter of last year rose 3.9% year-on-year to 2.0662 trillion KRW, and operating profit increased 22.5% to 52.9 billion KRW. GS The Fresh achieved industry-leading results in both store count and sales. GS The Fresh's sales in the fourth quarter of last year were 358.6 billion KRW, up 5.7% from the same period last year. Operating profit also rose 42.5% year-on-year to 5.7 billion KRW.

However, the performance of home shopping GS Shop declined somewhat. GS Shop's sales in the fourth quarter of last year fell 8% year-on-year to 294.9 billion KRW, and operating profit decreased 35.5% to 37.7 billion KRW. The hotel division posted sales of 135.4 billion KRW, up 11.2% from the same period last year, driven by increased sales from Nine Tree and Jeju hotels. However, operating profit declined 12.5% to 26.7 billion KRW.

In the development business, sales dropped 17.5% to 12.6 billion KRW due to the absence of advisory fees from existing development sites and the reflection of one-time costs. The development division recorded an operating loss of 10.9 billion KRW.

Additionally, the withdrawal from non-core businesses and equity sales contributed to improved performance. ▲The withdrawal from the online grocery platform GS Fresh Mall ▲The sale of shares in the design specialty shopping mall 10x10 ▲Cost efficiency efforts in subsidiaries such as Cookat and About Pet reduced losses by 36.8%. Sales in other divisions for the fourth quarter of last year were 63.9 billion KRW, with an operating loss of 20.8 billion KRW. Furthermore, a fair value loss of 196.2 billion KRW related to the equity investment in Yogiyo was reflected as a non-operating loss in the fourth-quarter results.

GS Retail plans to continue focusing on profitability this year. A GS Retail official stated, "Through customer-centric business structure innovation, we were able to achieve strong results in core businesses such as convenience stores and supermarkets. Despite a challenging business environment, home shopping achieved top industry performance by strengthening mobile capabilities. GS Retail will make its best efforts to enhance shareholder value through profitability-focused management and strengthening fundamentals for sustainable growth."