KOSPIRetail & Consumer007070

GS Retail

₩22,150▲ 0.23%2026-10-02 close

Market Cap

₩1.9T

Turnover

₩1.5B

Volume

70,000 shares

Shares out.

83.6M

PER

16.4×

PBR

0.6×

EPS

₩1,551

Dividend Yield

2.36%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩600 per share · Prices as of the 2026-10-02 close

Report overview

Profit Recovery Driven by Convenience-Store Quality Growth

GS Retail, having shifted its focus from store-count expansion to store efficiency, grew first-half 2026 operating profit at a double-digit pace, yet revenue has been stuck in the KRW 11-12 trillion range for four years and net profit still swings sharply by quarter on non-operating items.

1
Second-quarter 2026 revenue was KRW 3,175.1 billion and operating profit KRW 109.4 billion, up 6.8% and 26.9% respectively from KRW 2,973.8 billion and KRW 86.2 billion a year earlier, based on confirmed filings.
2
GS25 same-store daily sales growth reached 7.5% in the second quarter of 2026, the highest since the COVID-19 period, while fresh-food-focused stores expanded to 955 as of end-June.
3
In August 2026 the company disclosed its 2026 Corporate Value Enhancement Plan, targeting KRW 380 billion of operating profit in 2028 and the disposal of non-core investment assets and inefficient store assets.
4
The annual operating margin rose from 2.2% in 2022 to 3.4% in 2023, fell to 2.1% in 2024 and recovered to 2.4% in 2025, underscoring a structurally thin-margin business.
5
Korea's convenience-store market is effectively mature: GS25 led on first-half sales while CU led on operating profit, and CU is ahead in overseas store count.

Business structure

GS Retail is a domestic-demand retailer centered on the GS25 convenience-store chain, alongside the GS The Fresh supermarket chain and the GS Shop TV and mobile home-shopping business.

Of the KRW 3,175.1 billion in second-quarter 2026 group revenue, GS25 accounted for KRW 2,384.4 billion, or roughly three quarters of the total, with segment operating profit of KRW 71.4 billion. In the same quarter GS The Fresh posted revenue of KRW 469.8 billion and operating profit of KRW 9.3 billion.

Convenience stores and supermarkets earn mainly from merchandise sales and franchise fees, leaving a group operating margin in the 2% range, so per-store sales productivity and cost structure largely determine profit.

GS25 has concentrated on expanding fresh-food-enhanced stores, which reached 955 at the end of the first half, up from 773 at the end of 2025. In the second quarter of 2026, grocery-basket product sales rose 49.6% and sales to foreign customers, measured by foreign payment methods, rose 67.2%.

Quick commerce extends customer reach from a walking radius of roughly 200 meters to about 1 kilometer for delivery and about 500 meters for pickup, and the company says the average quick-commerce ticket is around five times that of offline stores.

On competition, first-half 2026 GS25 revenue was KRW 4,470.7 billion with operating profit of KRW 92.7 billion, ahead of CU on sales but behind on profit, as CU posted KRW 4,442.4 billion of revenue and KRW 114.7 billion of operating profit on a standalone basis.

The home-shopping arm is being run for profitability rather than scale, through exclusive merchandise and synergy across TV, mobile and social channels.

Earnings trend

Quarterly revenue · Operating profit

₩3T₩86.2B25Q2₩3.2T₩113.9B25Q3₩3T₩53.3B25Q4₩2.9T₩58.3B26Q1₩3.2T₩109.4B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩11.2T₩245.1B2022₩11.6T₩394B2023₩11.6T₩239.1B2024₩12T₩292.1B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩3T	₩86.2B	2.9%
2025Q3	₩3.2T	₩113.9B	3.6%
2025Q4	₩3T	₩53.3B	1.8%
2026Q1	₩2.9T	₩58.3B	2.0%
2026Q2	₩3.2T	₩109.4B	3.4%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩11.2T	₩245.1B	₩47.6B	2.2%	1.2%	122.5%
2023	₩11.6T	₩394B	₩17.7B	3.4%	0.4%	126.5%
2024	₩11.6T	₩239.1B	₩2.5B	2.1%	0.1%	138.3%
2025	₩12T	₩292.1B	₩43.4B	2.4%	1.3%	128.4%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

On confirmed annual figures, revenue was KRW 11,226.4 billion in 2022, KRW 11,612.5 billion in 2023, KRW 11,626.9 billion in 2024 and KRW 11,957.4 billion in 2025, implying low single-digit growth over four years.

Operating profit, by contrast, swung widely: KRW 245.1 billion in 2022 (2.2% margin), KRW 394.0 billion in 2023 (3.4%), KRW 239.1 billion in 2024 (2.1%) and KRW 292.1 billion in 2025 (2.4%).

Net profit attributable to owners was KRW 47.6 billion in 2022, KRW 17.7 billion in 2023, KRW 2.5 billion in 2024 and KRW 43.4 billion in 2025, diverging widely from operating profit; for 2024 in particular, a March 2026 report noted that the GS P&L spin-off generated non-cash items such as discontinued-operation losses that sharply compressed book profit.

Total equity also fell from KRW 4,433.7 billion in 2023 to KRW 3,181.5 billion in 2024, with non-controlling interests swinging from KRW 375.4 billion to negative, showing that portfolio restructuring reshaped the balance sheet itself.

The quarterly trend is clearly improving: operating profit rose 26.9% from KRW 86.2 billion in the second quarter of 2025 to KRW 109.4 billion in the second quarter of 2026, and first-half 2026 operating profit totals KRW 167.7 billion including KRW 58.3 billion in the first quarter.

Net profit volatility persists, however: attributable net profit of KRW 94.5 billion in the third quarter of 2025 came close to that quarter's KRW 113.9 billion operating profit, while the fourth quarter of 2025 produced an attributable net loss of KRW 73.1 billion despite KRW 53.3 billion of operating profit, meaning non-operating items dominated the outcome.

Cash flow has been comparatively steady, with operating cash flow easing from KRW 712.5 billion in 2022 to KRW 660.2 billion in 2024 before rising to KRW 938.6 billion in 2025, while the debt-to-equity ratio declined from 138.3% in 2024 to 128.4% in 2025.

Summing the four quarters from the third quarter of 2025 through the second quarter of 2026 gives operating profit in the KRW 330 billion range and attributable net profit of KRW 129.7 billion, a stronger earnings base than the recent annual figures.

Industry analysis

Korea's convenience-store industry has entered a mature phase. The number of domestic convenience stores has risen to a level similar to Japan (57,019 stores), a country with roughly twice the population, leading analysts to conclude that pure store-count competition has hit its limits.

Rival CU's annual net store additions fell from 975 in 2023 to 253 in 2025, yet its same-store sales growth rebounded from -2.1% in the second quarter of 2025 to 4.2% in the second quarter of 2026. The merchandise mix is also shifting.

Cigarettes accounted for 35.9% of CU's second-quarter 2026 sales, down 1.2 percentage points year on year, and observers attribute the change to high inflation and the rise of single-person households turning convenience stores into neighborhood grocery channels.

In other words, a structural shift away from low-margin tobacco toward fresh and ready-meal categories is reshaping industry margins.

In the second quarter of 2026 GS25 led on sales and same-store growth, CU on operating profit and exclusive products, while Seven Eleven turned profitable and Emart24 narrowed its losses, making ticket size, product mix and cost control the decisive variables.

Overseas, the gap has widened: as of the end of June 2026 CU operated 855 overseas stores versus 742 for GS25, a gap of 113, whereas both stood at 609 at the end of 2024. GS25 treats Vietnam as its largest overseas market, where stores represent 59.7% of its total overseas network.

Outlook

Management's medium-term target is explicit. On August 7, 2026 GS Retail disclosed its 2026 Corporate Value Enhancement Plan, built on improving core retail profitability and asset efficiency, and set a 2028 operating profit target of KRW 380 billion, more than 30% above the 2025 level.

To that end it plans to sell non-core equity investments and funds and monetize inefficient store assets in stages through 2028, with the proceeds considered over the long term for new investment and shareholder returns.

By business, GS25 will expand fresh-enhanced stores, strengthen differentiated private-brand and fresh-food line-ups and widen overseas operations, while home shopping shifts toward a profitability-centered structure through exclusive products and channel synergy.

The company said it has appointed a director responsible for shareholder communication and will continue to review and share progress on the plan.

Cost dynamics also matter for earnings: in a June 2026 report, Hana Securities noted that the convenience-store business pivoted to a profitability-first strategy from the first quarter of 2025, that depreciation began falling from the first quarter of 2026 as new openings slowed, and that rent declined as closures outpaced openings while labor costs eased after the prior year's voluntary retirement program.

The same report described the wind-down of underperforming units including AboutPet, the Indonesian supermarket business and Fursf as being in its final stage.

That said, a November 2025 report pointed out that earlier goals of KRW 25 trillion in 2025 revenue, 500 stores in Mongolia and a profit turnaround at the Vietnam entity were not met, with Mongolian stores at about 275 and losses widening in Vietnam, so execution against targets warrants continued monitoring.

On the brokerage side, Shinhan Investment Corp., as reported in August 2026, projected operating profit rising from KRW 365.9 billion in 2026 to KRW 398.4 billion in 2027 and KRW 424.7 billion in 2028.

Valuation

PER

16.4×

PBR

0.6×

ROE

4.0%

EPS

₩1,551

BPS

₩40,121

Dividend per share

₩600

Valuation here hinges less on the direction of profit than on how one treats its volatility. The shares trade below book value per share, implying a discounted multiple against net assets, while earnings-based multiples have been normalizing relative to the period when 2024 net profit all but disappeared.

Still, non-operating swings are large, as shown by attributable net profit moving from a fourth-quarter 2025 loss back to first-half 2026 profit, so earnings multiples themselves can shift materially quarter to quarter.

Dividends are paid once a year on a fiscal-year basis, and over the past four years (2022-2025) the cash payout ratio swung from 108.7% to 292.6%, 1,640.1% and 115.4% while the total cash dividend amount also fluctuated, a pattern driven by unstable net profit that makes payout-ratio metrics hard to read.

On brokerage views, Hanwha Investment & Securities maintained a Buy rating and a target price of KRW 32,000 in its July 3, 2026 report, and Daishin Securities said in August 2026 that it kept a Buy rating and raised its target price from KRW 30,000 to KRW 33,000. These are those firms' views; this report offers no opinion of its own.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Same-store rebound plus cost-structure improvement

GS25's same-store daily sales growth rose from 0.1% in the second quarter of 2025 to 4.7% in the first quarter of 2026 and 7.5% in the second quarter. The company is closing low-profitability stores and reorganizing its network around competitive locations to lower fixed-cost burdens.

Confirmed figures show first-half 2026 operating profit of KRW 167.7 billion (KRW 58.3 billion in the first quarter plus KRW 109.4 billion in the second), a stronger earnings base than a year earlier. It is a case where room to improve operating margin, rather than revenue growth, lifted results.

Fresh and grocery categories plus foreign demand

Second-quarter 2026 grocery-basket sales rose 49.6% and sales to foreign customers, measured by foreign payment methods, rose 67.2%. Fresh-enhanced stores reached 955 at the end of the first half, up from 773 at the end of 2025.

Industry observers note that prolonged heat waves can lift demand for seasonal items such as beverages and ice cream, and that foreign tourists increasingly use convenience stores as a primary shopping channel. Whether the mix shift away from tobacco dependence continues is the key thing to watch.

Value-up plan and asset monetization

On August 7, 2026 the company disclosed a corporate value enhancement plan with a medium-term operating profit target of KRW 380 billion for 2028, more than 30% above the 2025 level. The plan also covers phased disposals of non-core equity investments and funds and monetization of inefficient store assets through 2028.

On dividend policy, a company official said in March 2026 that the dividend per share had been raised from the prior year. In confirmed financials, 2025 operating cash flow of KRW 938.6 billion, up from KRW 660.2 billion, is a relevant fact when assessing funding for that plan.

Bear factors

Stalled top line

On confirmed financials, revenue rose only from KRW 11,226.4 billion in 2022 to KRW 11,957.4 billion in 2025, an average annual increase in the low single digits. A November 2025 report noted that revenue has been stuck in the KRW 11 trillion range since 2022 with no clear growth trend.

Given analysis that the domestic store count has approached Japan's level, leaving little room for pure expansion competition, growing the top line from the domestic market alone looks difficult. The fact that profit gains rely heavily on cost cuts and store restructuring is a durability concern.

High net-profit volatility

On confirmed data, attributable net profit all but vanished at KRW 2.5 billion in 2024 before recovering to KRW 43.4 billion in 2025, and quarterly it swung from a KRW 94.5 billion profit in the third quarter of 2025 to a KRW 73.1 billion loss in the fourth.

Operating profit over the same span only fell from KRW 113.9 billion to KRW 53.3 billion, suggesting much of the net swing came from outside operations. For 2024, analysis attributed the collapse in book profit to non-cash items such as discontinued-operation losses tied to the GS P&L spin-off. The difficulty of reading net-profit-based metrics from any single quarter is an inconvenience for investors.

Trailing peers on profit and overseas expansion

In the first half of 2026, GS25's operating profit of KRW 92.7 billion trailed CU's standalone KRW 114.7 billion by KRW 22.0 billion, even as its revenue led by KRW 28.3 billion. For the second quarter alone, GS25 led on revenue by KRW 11.7 billion while CU led on operating profit by KRW 9.3 billion.

Overseas, CU had 855 stores versus 742 for GS25 at the end of June 2026, a gap of 113, and net additions since end-2024 were 246 for CU against 133 for GS25. The company has not secured the top position on either domestic profitability or overseas expansion pace.

Risk factors

Consumption and policy variables

Favorable weather, government support payments tied to high fuel costs and rising foreign tourist numbers were cited as drivers of second-quarter 2026 sales growth. Such factors are largely temporary and could become a drag once base effects rise the following year.

If policy-driven consumption stimulus such as regional vouchers is scaled back, same-store growth could slow. Conversely, a sustained consumption recovery would ease the pressure, so both policy and weather variables should be treated as preconditions when reading quarterly results.

Financial structure and asset restructuring

On confirmed data the debt-to-equity ratio moved from 122.5% in 2022 to 126.5% in 2023, 138.3% in 2024 and 128.4% in 2025, staying well above 100%, with total liabilities of KRW 4,207.0 billion at end-2025.

The company said it will pursue disposals of non-core equity investments and funds and monetization of inefficient store assets through 2028, and will consider using the proceeds for new investment and shareholder returns.

Asset sales can create one-off gains or losses that amplify net-profit volatility, with outcomes depending on price and timing. Execution and terms need to be verified through individual disclosures.

Overseas business profitability

When GS Retail opened its first franchised store in Vietnam in June 2022 it targeted a profit turnaround by 2025, but a November 2025 report noted that losses at the Vietnam entity had instead widened and that Mongolian stores stood at around 275.

Assessments also suggest that market saturation and cost-efficiency limits make aggressive store expansion in Mongolia difficult. The company has stated plans to expand in northern Hanoi in Vietnam, to cities beyond Ulaanbaatar in Mongolia, and to explore additional countries.

The overseas segment remains small in scale, but whether its profitability improves could influence delivery of the value-up target.

What to watch next

Late October to early November 2026
Third-quarter 2026 results. Key items are whether convenience-store same-store growth, which reached 7.5% in the second quarter of 2026, holds up once heat-wave and tourism effects fade, and whether the operating margin exceeds the third-quarter 2025 level (operating profit of KRW 113.9 billion).
Fourth quarter of 2026
Pace of fresh-enhanced store expansion and quick-commerce metrics. How far the fresh-enhanced store count grows by year-end from 955 at the end of the first half is a practical gauge of whether per-store sales productivity gains are sustainable.
January to February 2027
Full-year 2026 results and the year-end dividend decision. Watch how far annual operating profit exceeds the KRW 292.1 billion recorded in 2025, and at what level the cash payout ratio, which has swung widely year to year, is set.
Second half of 2026 through 2027
Value-up execution disclosures. Actual progress on disposing of non-core equity investments and funds and monetizing inefficient store assets, along with the progress updates the company pledged to share, will determine the credibility of the KRW 380 billion 2028 operating profit target.
First half of 2027
Overseas net store additions and profit at the Vietnam and Mongolia units. Watch whether the overseas store gap of 742 for GS25 versus 855 for CU as of end-June 2026 narrows, and whether loss reduction in Vietnam shows up in reported figures.

Overall view

GS Retail's recent trajectory can be summed up as flat top line with recovering profit.

On confirmed financials, revenue crept from KRW 11,226.4 billion in 2022 to KRW 11,957.4 billion in 2025, while operating profit recovered from KRW 239.1 billion in 2024 to KRW 292.1 billion in 2025 and reached KRW 167.7 billion in the first half of 2026.

The recovery has come from store efficiency, mix improvement and cost reduction rather than new openings, supported by same-store daily sales growth rising from 0.1% in the second quarter of 2025 to 7.5% in the second quarter of 2026.

On the other side sit a domestic convenience-store market that has entered maturity, competition with CU, which leads on operating profit, delayed profit improvement overseas, and net-profit volatility stemming from asset restructuring and discontinued-operation items.

Since the company laid out a 2028 operating profit target of KRW 380 billion along with asset monetization and stronger shareholder returns in its August 2026 value enhancement plan, the practical approach is to track both execution pace and the quality of quarterly profit. This report is for informational purposes only and contains no buy or sell opinion or target price.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.