"Department Store Renewal Effect" Shinsegae Posts Q3 Operating Profit of 102.4 Billion Won... Highest Quarterly Record (Comprehensive)

Shinsegae Achieves Record Q3 Sales of 1.6671 Trillion KRW and Operating Profit of 102.4 Billion KRW
Differentiated Content through Renewal and Recovery of Consumer Sentiment... Growth in Department Stores and SI
Continued Improvement in Subsidiaries’ Performance Including Duty-Free and Casa... "Expecting Best Performance Surpassing 2019"

Shinsegae achieved its highest quarterly performance ever in the third quarter of this year. This was the result of growth in department store scale through renewals and improved performance of consolidated subsidiaries such as Shinsegae DF and Shinsegae Casa.

Shinsegae announced on the 9th that its consolidated operating profit for the third quarter of this year reached 102.4 billion KRW, a 307.1% increase compared to the same period last year. It surpassed 100 billion KRW for the first time in the third quarter. Sales for the same period increased by 37.3% to 1.6671 trillion KRW.

Department store sales for the third quarter were 509.6 billion KRW, a 15.0% growth compared to the same period last year. Operating profit rose 81.1% to 72.7 billion KRW. Both sales and operating profit marked the highest performance ever for the third quarter. The department store results include separate entities in Daegu, Gwangju, and Daejeon, but exclude outlets operated by Shinsegae Simon.

Following strong growth in overseas fashion (29.7%) and luxury goods (32.7%) in the first and second quarters, the recovery in daily life ahead of the phased "With Corona" policy contributed significantly to the performance improvement, with popular genres such as women’s fashion (15.7%) and men’s fashion (19.8%) rebounding. The inclusion of performance from the new Daejeon Shinsegae Art & Science store also had an impact.

In the third quarter, Shinsegae strengthened its core department store competitiveness by continuing new initiatives such as ▲industry-first introduction of mezzanine floors (Shinsegae Gangnam branch) ▲establishment of the largest luxury cosmetics specialty hall in Korea (Shinsegae Gangnam branch) ▲industry-first introduction of paid membership for food halls (Gyeonggi branch). The Daejeon Shinsegae Art & Science, launched in August, exceeded 40% of its sales target within two months of opening, signaling a positive outlook as the region’s top store.

Consolidated subsidiaries including Shinsegae International, DF, Central City, and Shinsegae Casa also showed favorable performance. International recorded sales of 350.2 billion KRW and operating profit of 14.1 billion KRW, supported by solid results in overseas fashion and cosmetics sectors and increased domestic fashion demand. Sales rose 4.9% year-on-year, and operating profit more than doubled.

Overseas fashion (15.4%) and imported cosmetics (37.5%) sectors led sales growth with strong consumer sentiment recovery. Despite seasonal off-season and social distancing impacts, the domestic fashion sector improved profitability through brand optimization and strengthening online channels. The Jaju segment achieved sales growth (+10.5%) through increased brand awareness and e-commerce channel expansion, with expectations for both scale and profitability growth through future distribution network restructuring and online business expansion.

The online business sector, SI Village, recorded a high growth rate of 38.9% year-on-year, driven by balanced growth in overseas luxury goods, domestic women’s wear, cosmetics, and Jaju. Shinsegae International plans to secure new growth engines by expanding live commerce and strengthening luxury MDs.

Shinsegae DF posted sales of 796.9 billion KRW and operating profit of 22.9 billion KRW. Sales increased by 82.3% year-on-year, and operating profit turned positive. Factors included the change to a revenue-based rent system at Incheon Airport duty-free shops since September last year and reduced accounting costs due to lease accounting effects pre-reflected in 2019 and last year. The company expects accelerated performance recovery as the phased daily life recovery begins this month, increasing visitors to duty-free shops.

Central City recorded sales of 60.3 billion KRW, a 3.9% increase year-on-year, driven by increased rental income from hotels and department stores. Operating profit was 10.3 billion KRW, down 26.9% due to initial costs from the new hotel Onoma opening.

Shinsegae Casa achieved sales of 60.2 billion KRW, growing 28.7% year-on-year due to stable sales from new stores and online (Good.com) channels and increased demand for premium product lines. Although operating loss was 1.1 billion KRW due to investment costs from new store openings and online business expansion, the company said the deficit narrowed compared to the previous year.

A Shinsegae official said, "We recorded the highest quarterly performance ever in Q3 through department store scale growth achieved by offline store innovation and successful stabilization of new stores, along with improved subsidiary performance. In Q4, we will continue strong performance based on strengthening offline core business competitiveness such as department stores, ongoing recovery of Shinsegae DF’s performance, and growth of subsidiaries including SI and Shinsegae Casa."

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