Shinsegae Co., Ltd. Reports Strong Third-Quarter Performance
Shinsegae Co., Ltd. has revealed its preliminary results for the third quarter, showcasing a positive trend in sales revenue and operating profit. According to the company’s announcement, third-quarter sales revenue increased by 6.2% compared to the same period last year, reaching 1.6361 trillion Korean won. Operating profit also saw an upward movement, rising by 7.3% to 99.8 billion Korean won.
Department Store Business: Growth and Strategic Adjustments
The department store business reported sales of 622.7 billion Korean won, marking a 0.5% increase from the previous year. However, operating profit fell by 4.9% year-on-year to 84 billion Korean won. A company source attributed the slight decrease in operating profit to strategic investments aimed at future preparation. The source added, “We are gradually reducing the margin of decline each quarter.”
To improve performance, Shinsegae Department Store is focusing on major store renovations and new business initiatives. In August, the Gangnam branch launched the industry’s largest food hall. Renovations for overseas fashion categories are currently underway at key stores, including the Main Branch, Gangnam Branch, Centum City, and Daegu Shinsegae. Upcoming projects include the Main Branch’s ‘The Reserve’ renovation and the opening of SSG Food Market Cheongdam. Additionally, new businesses such as premium travel service ‘Via Shinsegae’ and online shopping platform ‘Beyond Shinsegae’ are in progress.
The source highlighted that strong growth in luxury jewelry and watch categories, along with robust sales in home appliances and furniture, and increased fashion demand due to a sharp drop in temperatures contributed to a 10% sales increase compared to the same period last year.
Consolidated Subsidiaries Show Resilience
Shinsegae International and Shinsegae DF, both consolidated subsidiaries, demonstrated resilience in their operations. Shinsegae International reported third-quarter sales of 310.4 billion Korean won and an operating loss of 2 billion Korean won. Despite this, the imported fashion segment grew by 12.1%, while the cosmetics division achieved record-high quarterly sales of 111.1 billion Korean won. Cosmetics sales increased by 16.7% year-on-year, marking the first time sales exceeded 100 billion Korean won in the traditionally slow third quarter. However, declining domestic fashion sales and increased global investments in cosmetics led to an operating loss.
The source noted, “With rising fashion demand due to early cold weather starting in October, we expect performance to improve from the fourth quarter.”
Shinsegae DF, the duty-free division, saw sales increase by 14.2% to 538.8 billion Korean won due to increased travelers during the peak season and cost efficiency from improved commission rates. However, the division recorded an operating loss of 5.6 billion Korean won.
Other Business Units Report Mixed Results
Shinsegae Central reported sales of 98.1 billion Korean won and operating profit of 27.6 billion Korean won, up 3.9% and 6.6% year-on-year, respectively. This growth was driven by increased rental income from hotels. Shinsegae Live Shopping’s sales rose by 9.9% to 84.6 billion Korean won, with operating profit surging by 84.6% to 2.4 billion Korean won.
On the other hand, Shinsegae Casa experienced a decline in sales by 6.9% to 63.9 billion Korean won, resulting in an operating loss of 400 million Korean won. The source explained that the decline was due to reduced new housing supply amid a construction and real estate downturn, while rising material costs from exchange rate fluctuations contributed to the operating loss.
Future Outlook and Strategic Initiatives
A Shinsegae official stated, “From a mid- to long-term perspective, we have strengthened core business competitiveness through continuous investment, and the results are becoming visible. Going forward, we will maintain steady growth through consistent innovation, the return of Incheon Airport DF2, and business restructuring efforts to enhance competitiveness across all subsidiaries.”