[Click eStock] "Hyundai Department Store Shows Signs of Recovery Despite Weak Q1"

Yuanta Securities Issues 'Buy' Investment Opinion and Sets Target Price at 105,000 Won... Closing Price on 7th at 70,900 Won

Hyundai Department Store Apgujeong Main Branch (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Boryeong] Although Hyundai Department Store's first-quarter performance was sluggish, an analysis suggests that a recovery trend is emerging.

According to Yuanta Securities on the 8th, Hyundai Department Store recorded total sales of 1.3837 trillion KRW and an operating profit of 14.9 billion KRW in the first quarter of this year. Compared to the previous year, total sales decreased by 12.6%, while operating profit increased by 7%. However, the operating profit fell significantly short of the consensus estimate (50.1 billion KRW).

Both the department store and duty-free shop were directly hit by the impact of COVID-19, but the duty-free shop relatively held up well by successfully defending profitability. The department store posted net sales of 392.6 billion KRW and an operating profit of 34.2 billion KRW, down 17.7% and 65.3% respectively from the previous year. The duty-free shop recorded an operating loss of 19.4 billion KRW but reduced the deficit by 4.2 billion KRW compared to the previous year.

Lee Jin-hyeop, a researcher at Yuanta Securities, said, "The department store's same-store sales growth rate was about minus 10% until last month, showing sluggish performance, but meaningful sales recovery appeared during the holidays from the end of last month to early this month. We need to observe a bit more, but the direction of recovery is clear." He added, "Although the visibility of recovery in the duty-free sector itself is low, the Korea Customs Service's allowance of domestic distribution and third-party overseas return of inventory duty-free goods indicates that the worst phase is passing. It is entering a recovery cycle."

Hyundai Department Store will begin its store opening cycle in earnest starting mid-next month with the Daejeon Premium Outlet, followed by the Incheon Airport Terminal 1 Duty-Free Shop in September, Namyangju Premium Outlet in November, and Park One Department Store in January next year.

Yuanta Securities gave Hyundai Department Store a 'Buy' investment rating with a target price of 105,000 KRW. The closing price on the 7th was 70,900 KRW.

This content was produced with the assistance of AI translation services.