[Click e-Stock] "GS Retail: Time to Present Growth Strategies for 2026"

On November 7, IBK Investment & Securities raised its target price for GS Retail from 21,000 won to 23,000 won, stating that the solid earnings growth seen in the third quarter is expected to continue into the fourth quarter. The investment opinion was maintained as 'Buy'.

In the third quarter, GS Retail reported consolidated sales of 3.2054 trillion won (up 5.3% year-on-year) and operating profit of 111.1 billion won (up 31.6% year-on-year), delivering a surprise performance.

Nam Sung-hyun, a researcher at IBK Investment & Securities, identified the following as the main drivers behind the strong results: recovery in existing store traffic due to consumer coupon distribution; improved profitability from closing unprofitable stores; increased sales at new stores through a selective expansion strategy; a base effect from last year's provision for bad debts in the development business division; and profit improvements at major subsidiaries such as GS Networks.

However, Nam explained, "In the case of supermarkets, the growth in sales was driven by an increased proportion of franchise store openings, but store traffic decreased as the use of consumer coupons was restricted." He added, "Home shopping also saw a 3.8% year-on-year decline in transaction volume due to sluggish economic conditions and a slowdown in sales of food and home appliance categories."

This third-quarter performance has been evaluated as evidence of GS Retail's efforts to reduce selling and administrative expenses. However, there is also analysis suggesting that, given the structural weakness in the self-employed market, per-store sales may slow, making it necessary to develop strategies to drive growth in the convenience store division.

Nam stated, "In the third quarter, the convenience store business recorded high growth rates thanks to the closure of unprofitable stores and policy subsidies, but considering the domestic market environment, it will be difficult to sustain this trend over the long term. In 2026, it will be time to present strategies for growth."