{"id":330119,"date":"2024-10-29T01:30:24","date_gmt":"2024-10-28T17:30:24","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=330119"},"modified":"2024-10-29T01:30:28","modified_gmt":"2024-10-28T17:30:28","slug":"stock-in-focus-robinsons-retail-holdings-inc-rrhi-29-oct-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-robinsons-retail-holdings-inc-rrhi-29-oct-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Robinsons Retail Holdings Inc. (RRHI) – 29 Oct 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>RRHI<\/td><\/tr>
Company Name<\/strong><\/td>Robinsons Retail Holdings Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>29 Oct 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 62.06<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Despite the earnings miss, we continue to see RRHI as a primary beneficiary of the upcoming pick-up in consumer demand for both the consumer staples and discretionary segments on the back of moderating inflation and positive real wage growth, which we think will eventually translate a boost in the company\u2019s earnings as early as the next quarter. We therefore maintain our BUY rating on RRHI based on the consensus Target Price of P62.06.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Earnings trail estimates<\/strong><\/p>\n\n\n\n

RRHI posted core earnings of P1.43-Billion and P4.07-Billion for 3rd Quarter 2024 and 9-months 2024, trailing estimates of P1.65-Billion and P4.58-Billion by 13.4% and 11% respectively. A summary of their segments show us that Food and Drugstores continue to be the growth drivers as consumers continued prioritizing essentials while Department Stores, DIY stores, and Specialty Stores continued to post declines as the recovery in discretionary spending has yet to be seen. Given this, management pushed back their guidance for discretionary segment recovery to 2025.<\/p>\n\n\n\n

Staples buoy revenues<\/strong><\/p>\n\n\n\n

As expected, the Food and Drugstore segments continued to prop up revenues amidst the broader weakness in discretionary spending. The two segments posted growth rates of 4.8% and 9.0% respectively for 3Q 2024 respectively. Looking at supermarkets specifically, SSSG for 9M 2024 grew by 1.4% while 3Q 2024 posted 2.1% growth, which is the segment\u2019s highest quarterly SSSG this year. Additionally, basket size has shifted towards positive growth vs the declines posted in the previous quarters.<\/p>\n\n\n\n

Some color for the underperformers<\/strong><\/p>\n\n\n\n

RRHI provided several reasons as to why several of their segment\u2019s revenues continued to decline. The moving of the school year to August from July led to a decline in the earnings for their Department Stores, which was slightly offset by the launch of their luxury segment Spatio store in Opus on September 5. <\/p>\n\n\n\n

For the DIY segment, RRHI noted intense competition which led to the closure of 7 underperforming stores as the primary driver for the decline in sales. Lastly, the decline in their Specialty segment\u2019s revenues were partially attributable to lower movie releases, which led to a decline in demand for their Toys R’ Us sub-segment.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>