BGF Retail (282330) Q1 2024 earnings summary

Executive summary

• Q1 2024 consolidated revenue rose 5.6% YoY to ₩1,953,820 million; operating income fell 11.9% to ₩32,626 million and net income fell 15.5% to ₩23,402 million.

• Store expansion-related fixed costs weighed on profit despite sales growth; a logistics operating loss also affected segment results.

Financial highlights

• Consolidated gross profit rose 7.8% YoY to ₩361,137 million; pretax income fell 14.4% to ₩30,943 million.

• Q1 FY24 SG&A was ₩328.5 billion, versus ₩298.0 billion in Q1 FY23.

• Standalone revenue was ₩1,949,979 million, operating income ₩33,381 million, and net income ₩24,828 million; standalone net income was ₩30,351 million in Q1 2023.

Outlook and guidance

• Priorities include CVS market-share gains, cost-competitive fresh-food manufacturing, stronger product lines, and hit products developed with major manufacturers including CJ and Nongshim.

• SSSG was 0.0% in Q1 FY24 after 0.6% in Q4 FY23; recovery was expected as unfavorable base effects eased.

• Store expansion strategy focuses on profitability, franchisee economics, and locations suited to local customer needs; highway rest-stop tenders remain under consideration, subject to site reviews and outcomes.

• A technology-enabled mobile sales model is planned for a one-site test from Q3 2024; broader commercialization plans remain limited to a test.