"Solid Department Store" Shinsegae Reports Q3 Operating Profit of 153 Billion Won, Highest Quarterly Record (Comprehensive)

Operating profit consensus (173.6 billion KRW) missed... Sales 1.9551 trillion KRW, up 17.3%
Department store sales 609.6 billion KRW, up 19.8%... Operating profit 109.4 billion KRW, up 50.5%
Daejeon Shinsegae early stabilization, on-off content performance evaluation
Shinsegae Inter, 7 consecutive quarters of growth and strong subsidiary performance

Shinsegae Department Store Main Branch (Photo by Shinsegae).

[Asia Economy Reporter Yuri Kim] Shinsegae recorded its highest quarterly performance ever this year, driven by solid results from its department stores in the third quarter and improved earnings from subsidiaries such as Shinsegae International.

Shinsegae announced on the 7th that its consolidated operating profit for the third quarter reached 153 billion KRW, a 49.4% increase compared to the same period last year. Sales during the same period rose 17.3% to 1.9551 trillion KRW. This marks the highest performance ever for a third quarter. However, operating profit fell short of the market consensus (estimate of 173.6 billion KRW) compiled by FnGuide. Sales slightly exceeded the consensus (1.9265 trillion KRW). Net profit was 94.5 billion KRW, down 50.0%.

The department store business posted sales of 609.6 billion KRW, up 19.8% year-on-year, and operating profit grew 50.5% to 109.4 billion KRW (including separate corporations in Gwangju, Daegu, and Daejeon). Increased outdoor activities boosted fashion demand, with major categories such as women's fashion (31.7%), men's fashion (29.1%), and golf wear (33.7%) showing significant growth. Sales during the Chuseok holiday also rose 21.1% year-on-year, contributing to overall growth.

Notably, in the third quarter, Shinsegae Gangnam Store’s Young Contemporary specialty hall targeting millennials, the industry-first large-scale NFT (Non-Fungible Token) event at Centum City Store and Daejeon Shinsegae’s Art & Science, and the strengthening of the Shinsegae Department Store Mall specialty hall on SSG.com all contributed to sales through differentiated content. The Daejeon Shinsegae, which opened in August last year, also influenced results by becoming a landmark in the central region, attracting customers equivalent to half the national population within a year. Leveraging unique cultural and artistic content such as an aquarium and gallery, along with exclusive luxury brands, Daejeon Shinsegae achieved sales of 800 billion KRW within one year of opening, signaling its rise as a nationwide department store alongside Centum City and Daegu Shinsegae.

Consolidated subsidiaries including Shinsegae International and Shinsegae Central City also posted strong results. Shinsegae International’s third-quarter sales were 387.5 billion KRW, and operating profit was 24.2 billion KRW, up 10.7% and 71.0% respectively from the same period last year. This marks seven consecutive quarters of growth since the first quarter of 2021.

Shinsegae DF’s sales increased 7.5% to 856.6 billion KRW, while operating profit fell 77.7% to 5.1 billion KRW. Airport store sales surged 287% due to increased airport departures, but downtown store sales declined by 5%. Shinsegae Central City also recorded sales of 85.4 billion KRW, up 41.6% year-on-year, driven by increased rental income from department stores and higher hotel sales. Operating profit rose 119.4% to 22.6 billion KRW. Shinsegae Live Shopping, incorporated into Shinsegae since August, posted sales of 42.9 billion KRW and operating profit of 1 billion KRW by leveraging differentiated content such as developing its own premium fashion brand.

Shinsegae Casa achieved sales growth of 12.8% year-on-year to 67.9 billion KRW, thanks to product competitiveness and the successful establishment of new stores and Good.com (online). Despite challenging conditions such as rising raw material prices, exchange rates, and a downturn in real estate and construction markets, it managed external growth. However, operating losses widened by 4.7 billion KRW to 5.8 billion KRW.

A Shinsegae official stated, "Thanks to the growth of our department stores, which are presenting a new distribution paradigm both online and offline, and the improved performance of our subsidiaries, we have continued to achieve the highest year-on-year results for seven consecutive quarters. We will maintain solid performance in the fourth quarter based on offline innovation, strengthened differentiated digital content, and the steady growth of subsidiaries such as Shinsegae International."

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