According to an analysis by KGI Securities, Central Retail Corporation (SET: CRC) is bracing for another challenging quarter as weak consumer spending, fewer tourist arrivals, and seasonal weather effects continue to suppress retail activity across its key markets.
The company is expected to face broad-based contractions in same-store sales in 3Q25, putting further pressure on earnings and profitability despite ongoing efforts at cost control.
KGI forecasts CRC to post a normalized profit of THB 1.6 billion for 3Q25, representing a decline of 3% year-on-year but up 18% quarter-on-quarter. This brings normalized profit for the first nine months of 2025 to THB 5.4 billion, down 4% year-on-year and forming 66% of the analyst’s full-year estimate.
Ongoing weak consumer demand, a heavier rainy season, and fewer tourist arrivals are expected to weigh on same-store sales (SSS), which should contract across all regions and business units in the low- to mid-single-digit range.
By region, Thailand is expected to exhibit the best performance, though still in negative territory at low-single-digit SSS declines, followed by Italy (negative low- to mid-single-digit) and Vietnam (negative high-single-digit). By segment, hardline is expected to record the smallest SSS decline, with fashion and food segments also facing negative trends.
With store expansion, through Tops and Go Wholesale, revenue from sales is projected at THB 57.4 billion in 3Q25, a 3% increase both year-on-year and quarter-on-quarter, taking 9M25 revenue to THB 175.3 billion, representing a 2% surge year-on-year.
CRC’s profitability is expected to be squeezed by subdued consumer spending, with its 3Q25 gross margin from sales forecast at 24.9%, down 80 basis points both year-on-year and quarter-on-quarter. The 9M25 gross margin from sales is projected at 25.1%, a decline of 50 basis points year-on-year, primarily due to increased marketing activities and a higher contribution from the lower-margin Go Wholesale platform.
Total gross margin, including rental and services, is estimated at 26.9%. The company is expected to continue rigorous cost controls, with the selling, general, and administrative expenses to sales ratio at 29%.
While earnings are likely to improve sequentially in 4Q25 due to seasonal factors, year-on-year growth will remain a challenge. KGI highlights a significant downside risk of approximately 10% to 2026 earnings from the planned Italy business divestment, pending shareholder approval and completion by the end of 2025.
Following these, KGI reiterates a ‘Neutral’ rating on CRC. With the PER unchanged, the brokerage firm sees downside risk to CRC’s target price and has applied a 5% discount to THB 20.40 per share. This partially reflects the potential impact of the Italy divestment, offset by an expected special dividend.
