1. BGF Retail Q1 2025 Earnings Analysis

BGF Retail reported revenue of KRW 2.29 trillion, operating profit of KRW 69.4 billion, and net income of KRW 52.8 billion in Q1 2025. While revenue was in line with market expectations, operating profit fell short by 4.4%, painting a somewhat lackluster picture.

2. Dissecting the Underperformance: Expectations vs. Reality

Although the convenience store segment maintained solid growth, the sluggish profitability of the logistics and food businesses impacted the overall operating profit decline. Furthermore, the positive impact from the incorporation of the advertising/delivery/e-commerce subsidiary is expected to materialize from Q3 onwards, and therefore wasn’t reflected in the Q1 results.

3. Future Outlook and Investment Strategy: Opportunities and Threats

The growth of the convenience store market and the potential for overseas expansion are expected to be key drivers for BGF Retail’s mid-to-long-term growth. However, investors should also consider risk factors such as the need for improved profitability in other business segments, intensifying competition, and rising interest rates. The current investment recommendation is ‘Hold,’ and close monitoring of Q2 earnings and improvements in other business segments will be crucial.

4. Action Plan for Investors: The Importance of Information Gathering and Analysis

  • Short-term investors: Maintain a cautious investment stance, paying close attention to operating profit trends and stock price volatility.
  • Long-term investors: Continuously monitor the convenience store market growth, overseas market performance, and profitability improvements in new businesses.