Revenge Spending Confirmed by Performance... Department Stores Smiled in Q1
[Asia Economy Reporter Kim Yuri] The wave of 'revenge consumption' heading to department stores was confirmed in the first-quarter results.
On the 11th, Lotte Shopping announced that its operating profit for the first quarter increased by 18.5% year-on-year to 61.8 billion KRW. During the same period, sales slightly decreased by 4.8% to 3.88 trillion KRW, but the department store segment showed a remarkable improvement. Lotte Department Store recorded sales of 676 billion KRW and an operating profit of 103 billion KRW during this period, marking an 11.5% and 261.3% improvement respectively compared to the same period last year. Analysts attribute these results to the base effect and the recovery of suppressed consumer sentiment, which is being called 'revenge consumption' this year.
On the 6th, Hyundai Department Store also announced strong results led by improved department store performance. Hyundai Department Store's consolidated sales and operating profit were 683.2 billion KRW and 65 billion KRW respectively, up 52.0% and 336.3% year-on-year. The department store division's net sales increased by 26.7% to 497.4 billion KRW. Operating profit reached 76 billion KRW, a 122.3% increase. A Hyundai Department Store official explained, "This is due to the opening of new stores such as The Hyundai Seoul and Hyundai Premium Outlet Space One, as well as the recovery in consumption of fashion product categories."
Shinsegae, which will announce its results on the 12th, is also forecasting improved performance. According to FnGuide, Shinsegae's first-quarter operating profit consensus estimate is 89.2 billion KRW, expected to increase by 2603.0% compared to 3.3 billion KRW in the same period last year.
Hot Picks Today
"Samsung and Hynix Were Once for the Underachievers"... Hyundai Motor Employee's Lament
- "Sold Everything Fearing Bankruptcy, Then It Soared 3,900 Times: How a Stock Once Feared for Delisting Became an AI Powerhouse"
- Court Partially Grants Samsung Electronics' Injunction to Prohibit Industrial Action... 100 Million Won Penalty Per Day for Violations
- President Lee Attends Gwangju May 18 Ceremony... Declares 'A Nation Where the People Are the True Owners' at Democratic Cemetery
- "That? It's Already Stashed" Nightlife Scene Crosses the Line [ChwiYak Nation] ③
In the second quarter, sales momentum is expected to continue due to the regular April sales and the Family Month in May, raising expectations for the second half's performance. An industry insider said, "Revenge consumption is likely to continue in the second half as overseas travel remains difficult. However, if the uncertainties related to COVID-19 are resolved faster than expected, it could negatively impact the performance."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
