[Click e-Stock] "Emart: Same-Store Sales Growth Still Expected to Rise"

On May 13, Kiwoom Securities analyzed that as political uncertainty eases and consumer sentiment rebounds, and considering the increase in indirect benefits due to the weakening business capabilities of major competitors, the same-store sales growth rate for discount stores is expected to gradually rise. The firm maintained its "Buy" investment rating and a target price of 130,000 won for Emart.

Emart's consolidated operating profit for the first quarter was 159.3 billion won (up 238% year-on-year), exceeding market expectations. However, due to the sluggish same-store sales growth rate for discount stores in April, the stock price closed down 7% on the day of the earnings announcement.

Park Sangjun, a researcher at Kiwoom Securities, explained, "The same-store sales growth rate for discount stores in April was -2.6%, falling short of market expectations. This was because, during the earnings conference call, the company commented that, unlike its competitors, it has not yet benefited significantly from the Homeplus issue."

However, expectations for an increase in the same-store sales growth rate for discount stores remain valid. Park stated, "While April was affected by having one less holiday, in May, the early-month holiday effect is likely to lead to a rebound in the same-store sales growth rate. In addition, the overall rebound in consumer sentiment due to the easing of political uncertainty is also a positive factor. Considering that the business capabilities of the main competitor (Homeplus) are gradually weakening, the indirect benefits centered on competing stores are expected to become stronger over time."