Convenience Stores and Supermarkets Performed Well, but GS Retail's 2Q Operating Profit Declined

Despite Growth and Maintenance Trends in Core Business Profits,
Decline Due to Tenbyten Stake Sale and Others

GS Retail announced on the 7th that its consolidated operating profit for the second quarter of this year was tentatively estimated at 81 billion KRW, down 9.4% compared to the same period last year.

Sales increased by 123.9 billion KRW (4.4%) compared to the previous year, reaching 2.9371 trillion KRW. Considering that the market had estimated sales and operating profit at 3.092 trillion KRW and 110.1 billion KRW respectively, the results were analyzed to be below expectations. The company explained that while the profits from core businesses such as supermarkets, convenience stores, and home shopping showed growth and maintenance trends, the decline in profits from subsidiaries was reflected.

Sales were driven by the core offline businesses of convenience stores and supermarkets. Convenience store sales reached 2.1938 trillion KRW, and supermarkets 394.1 billion KRW, increasing by 4.9% and 10.3% respectively. In the case of convenience stores, sales growth was influenced by the opening of new stores. GS Retail operates the convenience store GS25, which increased its nationwide store count from 16,448 in 2022 to 17,390 last year. The company stated that store openings are continuing this year as well. Supermarkets also boosted sales by continuously opening franchise stores. The number of supermarket franchises increased from 316 last year to 377 as of the second quarter of this year.

Convenience stores and supermarkets, along with home shopping, also played a driving role in increasing operating profit. During the same period, convenience stores recorded 64.9 billion KRW, supermarkets 6.5 billion KRW, and home shopping 27.2 billion KRW, totaling 98.6 billion KRW in operating profit. However, the overall operating profit declined due to the withdrawal from the GS Fresh Mall business and the sale of shares in TenbyTen last year, as well as the reclassification of related gains and losses as discontinued operations following the spin-off of Parnas Hotel and Fresh Meat in the second quarter of this year.

A GS Retail official stated, "Despite the challenging distribution environment, we are focusing on strengthening internal efficiency," adding, "This led to results such as achieving around 100 billion KRW in operating profit from the three core businesses in the second quarter."