BGF Retail Co., Ltd. posts first quarterly operating profit above 100 billion won

[Financial News] BGF Retail Co., Ltd.'s quarterly operating profit topped 100 billion won for the first time. Higher average spending per customer and foreign demand supported both revenue and earnings.
Eugene Investment & Securities said on the 6th that BGF Retail Co., Ltd. posted third-quarter consolidated revenue of 2.5152 trillion won and operating profit of 100.8 billion won.
Lee Hae-ni, a researcher at Eugene Investment & Securities, explained, "Same-store growth was flat in July and August, as a high base from the previous year's consumer vouchers coincided with frequent rainfall and heat waves. In September, it grew to 2.7% on an increase in foreign customer traffic and strong sales of IP-differentiated products such as RESCENE." She added, "Daily sales at new stores reached 98.3% of the level at existing stores, up 4.7 percentage points year on year."
Foreign-customer sales at BGF Retail Co., Ltd. rose 66.8% year on year in the third quarter, lifting their share of total sales to 2.5%. Including estimated cash payments, the actual share is around 3%. Foreign demand accounted for about 35% of third-quarter revenue growth, making a substantial contribution. Foreign customers mainly purchased processed foods (63% of their purchases), and their average spend per customer was about 7% higher than that of domestic customers.
The researcher said, "Year-on-year same-store growth in October and November is at a low-single-digit level, so it is not high. However, the effects of product price increases, a greater share of general merchandise and a smaller share of tobacco are lifting average spending per customer. The benefits of this improved category mix are expected to accumulate toward year-end." She added, "With selling, general and administrative expenses rising—including oil costs and logistics center depreciation—the improvement in operating profit is unlikely to fully reflect the increase in average spending per customer."

[email protected] Kang Gu-gwi Reporter