Company Update / Consumer Discretionary / IJ / Click here for full PDF version
Author(s): Lukito Supriadi ;Andrianto Saputra
- 's 1Q24 net profit of Rp414bn (+5.9% yoy), came in-line with consensus/ our estimate at 18% vs. 5-yr average of 16%.
- Sales were also in-line with 18% yoy growth despite 1Q23's high base driven by new stores opening.
- We fine-tune our FY24/25F forecast by +2/+3%. Maintain Buy for now with slightly higher TP of Rp2,600/sh (from Rp2,550).
1Q24 results: in-line profits despite 1Q23 high base effect
booked 1Q24 net profit of Rp414bn (+5.9% yoy), which was in-line with ours/consensus estimate at 18% (vs. 5-yr average ex- covid period of 16%). Revenue came at Rp8.8tr (+17.8% yoy) and in-line with ours/consensus expectations, but slightly below company guidance of FY24F sales growth >20%. Notably,1Q23 represents a high base effect with pent-up demand during the pandemic and endemic transition - recall that 's SSSG stood at 18.7% in 1Q23. Hence, we view that the sales driver for 1Q24 came from new store opening over SSSG , which is similar to 4Q23's trend. GPM declined to 42.6% (vs. 1Q23's 44.3%) dragged by active segment's GPM (1Q24: 47.9% vs. 1Q23's 49.2%), whileopex/sales was actually kept under control at 34.5% vs. 1Q23's 35.4% with salary/sales ratio declining 93bps - contrary to investors' concern on opex overrun. Inventory days rose to 158 days (vs. 1Q23: 132 days) from increase in store openings.
Segmental driver still comes from specialty stores
Segmentally, 1Q24 specialty stores delivered the highest sales growth at 26.3% yoy (: 35.6% yoy). On the other hand, F&B registered -17.7% yoy sales drop amid the boycott impact. As F&B's opex are largely fixed in nature, the sales decline translated to negative operating leverage with EBIT margin of -3.4% (vs. 1Q23/4Q23's 3.3/-0.9%). Overseas sales contribution continue to climb with 1Q24's 16.4% of sales coming from abroad (vs. 1Q23/4Q23's 9.9/16.2%) as allocates c.25% of store expansion for overseas (c.40% of 's). For FY24F, aims to open 650 stores (400 active; 250 for fashion, F&B and others).
Maintain Buy with TP of Rp2,600
Accounting for 1Q24 results, we fine tune our FY24/25F forecast by +1.5/+2.6%. Management has revised 's sales growth guidance to 20% (from previously 25%) on more conservative store opening target this year. We maintain our BUY rating with slightly higher TP of Rp2,600/sh based on 18.0x FY24F P/E (+1s.d. from its 5yr avg). As recently discussed (link), 's COGS exposure to US$ is estimated at 70%, but we view they shall be able to pass on the higher costs to the mid-high end customers. Key risk is over expansion and cost overrun.
Sumber : IPS