[Click e-Stock] "Shinsegae, Favorable Department Store Business Environment Continues"

On December 4, IBK Investment & Securities raised its target price for Shinsegae from 2.5 million won to 3 million won, citing a continued favorable department store business environment and a high likelihood of improved performance in 2026. The firm maintained its 'Buy' investment rating.

The fourth-quarter same-store sales growth rate for Shinsegae Department Store this year is expected to exceed 10%, far surpassing initial forecasts. Nam Sung-hyun, an analyst at IBK Investment & Securities, explained, "Rising asset values are driving increased demand for overseas luxury brands," adding, "We also expect higher customer traffic due to the expansion of inbound foreign tourists and the reopening of the flagship store after renovations."

Sales growth among foreign customers remains robust. Analyst Nam noted, "The number of inbound foreign tourists in October was 1,739,000, up 8.7% from the same month last year, and Chinese tourists are now entering without visas." He estimated Shinsegae's fourth-quarter revenue at 1.9967 trillion won (up 9.6% year-on-year) and operating profit at 159.2 billion won (up 53.8%). The company's 2026 operating profit forecast was revised from 513.4 billion won to 552.1 billion won.

Nam further stated, "The impact of Shinsegae Duty Free's withdrawal from Incheon Airport's DF2 (cosmetics, perfume, liquor, and tobacco duty-free zone) is likely to become significant starting in the third quarter of next year, and profit growth is expected as major department store renovations are completed." He also noted, "Continued growth in the Central Hotel business unit driven by increased inbound foreign demand, as well as potential efficiency gains from restructuring the SI (Shinsegae International) and Shinsegae Casa business units, are highly likely."

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