KGI Securities (Thailand) expects the normalized profit of Central Retail Corporation Public Company Limited (SET: CRC) in 2Q26 to be THB 1.4 billion, which is flat compared to the same period last year but a 54% drop from the previous quarter. This was due to a decline in sales and gross profit margin compared to the same period last year, following the divestment of its business in Italy.
However, if the effects from the divestment are excluded (profit sharing from the Italian business was THB 406 million in 2Q25), the normalized profit in 2Q26 would increase by 43% from the same period last year, as financial costs decreased from lower interest rates. KGI projected that normalized profit for the first half of the year will be THB 4.2 billion, up 11% from the same period last year, accounting for 54% of the full-year profit estimate.
Meanwhile, same-store sales growth (SSSG) in 2Q26 is expected to be in the low single digits higher (after being in the low-to-mid negative single digits in both 2Q25 and 1Q26). This is mainly supported by the food segment in Thailand, which benefited from stockpiling trends that boosted demand, resulting in mid-single-digit SSSG for Thailand’s food segment, performing better than other segments.
Taking into account the impact from the sale of its Italian business and the divestment of the hardline business in Vietnam (NKT), total sales in 2Q26 are projected at THB 52.7 billion, down 6% from the same period last year but up 12% from the previous quarter.
Despite overall demand trends remaining challenging, KGI expected that CRC’s performance will bottom out in 2Q26 before rebounding in the second half of the year due to:
- Lower financial costs driven by falling interest rates—about 72% of total debt is floating rate, and each 0.25% decrease in borrowing cost should increase net profit by approximately THB 100 million per year.
- Cessation of losses from the NKT, after CRC divested its subsidiary on April 23, 2026, whereas in 2025, the share of NKT’s losses was around THB 250 million baht.
- Profit sharing from JD Sports (THB 100 million per year).
- Internal management initiatives, including cost reductions through inventory management, waste reduction, and ongoing focus on house-brand strategies, with the share of house-brand sales for the fashion, food, and hardline segments at 3%, 12%, and 16%, respectively.
KGI maintains a “Buy” recommendation for CRC, with a target price for the first half of 2027 at THB 23.80 per share, based on a weighted average price to earnings ratio (PER) of 17.7 times, comparable to the fashion group at 15 times, food group at 19.5 times, and hardline group at 17 times.
