According to a recent analysis from Bualuang Securities (BLS), Thailand’s retail sector continued to face headwinds in June, with average same-store sales (SSS) among stocks under the analyst’s coverage declining by 4% year-on-year, similar to the trend seen in May.
The sector was pressured by broader macroeconomic factors and a sharp 15% year-on-year drop in international tourist arrivals. In the first half of 2025, a total of 16.7 million foreign tourists visited Thailand, down 5% compared to the previous year.
Within the sector, essential goods retailers remained resilient, recording just a 1% year-on-year SSS drop, supported by strong fresh food sales and robust growth in online channels. Department stores, such as Central Retail Corporation (SET: CRC), saw SSS fall 4% year-on-year, squeezed by weaker demand for luxury items and a stronger Thai baht relative to the Vietnamese dong and the euro.
The Home Décor & Construction (HD&C) segment performed the worst, with SSS down 6% year-on-year in June—a slight improvement from the 9% drop in May—as sales began to stabilize after being hit by unfavorable weather in April and May.
Breaking down performance by company, CP Axtra Public Company Limited (SET: CPAXT), operator of Makro and Lotus’s, reported flat SSS in June thanks to stable food service demand and growth in its overseas business, making it the best performer among stocks under BLS’ coverage.
In contrast, Dohome Public Company Limited (SET: DOHOME) experienced the steepest SSS decline of 11% due to shortages in steel products, significantly impacting sales among project contractors and trade shops, with SSS in this segment plunging by 16-17%.
Looking forward, BLS expects the average SSS decline for stocks under its coverage in July will likely ease from the 4% drop in June, supported by government tourism stimulus measures. Essential goods retailers are expected to return to sales growth, while the HD&C segment may see softer declines as DOHOME’s steel supply issues are expected to be resolved.
For the second quarter of 2025, the core profit across stocks under BLS’ coverage is expected to slow year-on-year, mirroring the drop in SSS. However, expansion in profit margins—driven by a higher share of high-margin products, lower energy costs, and falling interest rates—is seen as the key growth catalyst.
Essential goods retailers remain the standout performers in adapting to market challenges, while HD&C is likely to report the steepest declines in both year-on-year and quarter-on-quarter profit due to continued SSS weakness.
As a result, Bualuang Securities has assigned a ‘Neutral’ rating to the Thai retail sector, reflecting mixed prospects across key players in the industry. The firm recommends a ‘BUY’ on CPALL with a target price of 70.00 baht, CPAXT at 32.00 baht, and CPN at 55.00 baht. BJC is rated ‘HOLD’ with a target of 23.00 baht. On the downside, BLS recommends ‘SELL’ on CRC at 16.50 baht, DOHOME at 2.60 baht, GLOBAL at 4.00 baht, HMPRO at 5.35 baht, and ILM at 11.50 baht.
