GS Retail (007070.KS) posted improved first-quarter earnings, driven by broad-based growth across its convenience store, supermarket, and home shopping divisions. Analysts attribute the gains to the company's strategy of strengthening fresh food offerings, expanding differentiated products, and growing its quick commerce business.
The company reported first-quarter revenue of 2.85 trillion won ($2.1 billion), up 3.8% from a year earlier, according to a regulatory filing Wednesday. Operating profit rose 39.4% to 58.3 billion won.
The convenience store arm GS25 recorded first-quarter revenue of 2.09 trillion won and operating profit of 21.3 billion won, up 3.7% and 23.8% year-on-year, respectively. Fresh-food-enhanced stores led the earnings improvement. Daily average sales at these outlets reached 1.6 times those of regular stores, with the number of such stores expanding to 836.
The differentiated product strategy also delivered results. GS25 produced multiple million-sellers through intellectual property (IP) collaboration products and in-house planned items. The "Culinary Class Wars 2 Ready-to-Eat Series" sold 5 million units. Collaboration products with virtual idol group PLAVE sold 1.2 million units, while the "Big Eater Series" and "Hyeja-roun Bread Series," developed with creator Tzuyang, each sold more than 1 million units.
GS The Fresh, the supermarket business, saw significant earnings improvement driven by new store openings and quick commerce growth. First-quarter revenue rose 9.0% to 453.4 billion won, while operating profit surged 55.1% to 12.1 billion won. The store count expanded to 589. Quick commerce growth was particularly notable, with GS The Fresh's first-quarter quick commerce sales rising 32.8%, now accounting for nearly 10% of total sales.
GS Shop, the home shopping business, also improved profitability on the back of strengthened fashion and beauty product competitiveness. First-quarter revenue rose 1.6% to 262 billion won, while operating profit jumped 32.6% to 29.7 billion won.
Private label-centered fashion led the growth. GS Shop expanded its first-quarter new product lineup by 34% year-on-year to 141 items. Fashion revenue grew 7%, driven by the growth of in-house fashion brands Core Authentic and Rene Crew.
An integrated sales strategy combining TV, mobile, and social media also delivered results. GS Shop operated pre-planned integrated sales programs for about 90 brands, with transaction volume from these programs rising 32% year-on-year. Artificial intelligence (AI)-based content production also increased 40% from a year earlier.
"The first-quarter strong results reflect company-wide efforts over the past year to build a foundation for substantive growth centered on our core business, from a customer-first perspective," a GS Retail official said. "We will continue efforts to strengthen our business fundamentals to achieve stable growth over the medium to long term."
