Maguro Group hinted at an increase in sales and profit in Q3 of 2024 after both existing brand and new brand of restaurants are completely packed, while the cost of salmon has shrunk down, supporting a stable growth in sales and profit.
MAGURO plans to open six more stores for both existing and new brands, ensuring a 30% surge in sales. Analysts suggest buying at THB22.00 per share, as profit from the Q3 of 2024 is expected to gain a significant boost.
Mr. Eakkalurk Sangsareedumrong CEO and founder of MAGURO Group Public Company Limited (mai: MAGURO) revealed to “Kaohoon” that the company should post a satisfying earnings results for the third quarter of 2024, even though it is considered to be “low season” for the restaurant business. According to experts, July-August has seen same-store sales growth from Q2 of 2024 due to a constant stream of customers in both the current brand and the newly opened brand.
Recently MAGURO has been on a spree, opening new branches left and right for both existing and new brands. Additionally, expenses (mainly salmon) have decreased quite substantially, which would reflect positively on the 3Q24 performance to be more profitable than the previous quarter and possibly more than the first quarter of this year. Still, the CEO noted that it remains to be seen how the last month of the third quarter will play out.
During the first eight months of 2024 (January-August) there are 32 restaurants under MAGURO Group, including MAGURO, SSAMTHING TOGETHER, HITORI SHABU, and HITORI SUKIYAKI (newest brand), which can be categorized as 25 existing restaurants and 7 restaurants opened this year, and in the last 4 month of 2024 (September-December) there is a plan to open 2 additional restaurants under 4 brand, 2 for existing one and 2 for a new brand, any further progress is to be announced in the future.
Finansia Syrus Securities (FSS) has given a “BUY” recommendation on MAGURO at a target price of THB22.00 per share, expecting 3Q24 results to outperform despite being a low season for its business with a slight contraction in SSSG by 2-3%, which is better than its peers.
The expansion should accelerate its sales and enable the store to break even faster, coupled with lower cost for salmon by around 30%. The securities firm concluded that MAGURO should report a promising profit in the third quarter. Meanwhile, the overall outlook for 2024 is expected to see an increase by 17% in net profit at 84 million baht, which will continue to accelerate to 121 million baht in the following year following the economic stimulus plan from the government that should boost the overall spending.
