[Click eStock] "Hyundai Department Store, Expected Q2 Slump... Hopes for Improvement in Second Half"

[Asia Economy Reporter Park Jihwan] Shinhan Financial Investment evaluated Hyundai Department Store on the 14th, stating that it recorded the expected sluggish performance in the second quarter of this year, but improvement is anticipated in the second half. Accordingly, the investment opinion 'Buy' and the target stock price of 90,000 KRW were maintained.

Researcher Park Heejin of Shinhan Financial Investment stated, "The consolidated operating profit for the second quarter was 8.1 billion KRW, a decrease of 83.9% compared to the previous year," and added, "The profits from the department store and duty-free shop were 26.2 billion KRW and 18 billion KRW, respectively." The duty-free shop's profit was at the expected level and improved by more than 1 billion KRW compared to the previous quarter, but the department store's profit fell short of estimates. This was due to a decline in profit margin caused by high growth in low-margin product categories.

Gradual improvement is expected in the second half. The consolidated profit for the third quarter is forecasted to increase by 11.5% compared to last year. Although the erosion of profit margin due to the growth of low-margin products is regrettable, sales of the existing high-margin product category, general apparel, are also gradually improving.

Researcher Park Heejin said, "Cost improvements in the division are being confirmed," and "the upward trend in average daily sales in the third quarter is also ongoing."

He added, "Although the department store's profit is disappointing, the positive outlook for gradual improvement in the second half remains valid," and "the positive outlook for the Guri Premium Outlet opening in November, as well as the completion of renovations at Apgujeong in July and Jungdong store in November, is also valid."

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