Hyundai Department Store's Q2 Sales Reach Record High... Duty-Free Stores Continue to Post Losses

Zinus Faces Decline with Operating Profit Down 23%
Sales Reach 1.0238 Trillion Won, Up 5.5% Year-on-Year

Hyundai Department Store received a somewhat disappointing report card for the second quarter of this year.

Hyundai Department Store announced on the 8th that its consolidated operating profit for the second quarter of this year was tentatively estimated at 42.8 billion KRW, down 23% compared to the same period last year. Sales increased by 5.5% to 1.0238 trillion KRW. Considering that the market had estimated operating profit and sales at 42.3 billion KRW and 1.0102 trillion KRW respectively, these figures slightly exceeded expectations.

Hyundai Department Store Apgujeong Main Branch exterior.
[Photo by Hyundai Department Store]

By business segment, the department store recorded sales of 611.9 billion KRW and operating profit of 71 billion KRW in the second quarter of this year. These figures represent increases of 3.0% and 18.3% respectively compared to the same period last year. Sales were the highest ever on a quarterly basis. The company explained, "This was thanks to continued strong sales centered on young fashion and sports product categories."

The duty-free shop's sales rose 23.8% to 240.5 billion KRW compared to the same period last year, but operating losses increased from 900 million KRW to 3.9 billion KRW. The company stated, "Although sales increased due to a rise in the number of travelers, operating profit recorded a loss due to increased marketing expenses," but added, "The deficit narrowed on a cumulative basis for the first half of the year." The duty-free shop's cumulative operating loss for the first half of this year was 9 billion KRW, down 7.5 billion KRW from 16.5 billion KRW last year.

Global online furniture and mattress company Zinus reported sales of 206.3 billion KRW, a 6% decrease from the previous year. Operating losses also turned to 14.2 billion KRW. In the second quarter of last year, Zinus recorded an operating profit of 5.2 billion KRW. A company official explained, "Sales and operating profit were sluggish due to increased promotional expenses to liquidate existing bulky boxed inventory and a temporary decrease in orders from major clients." However, they added that since May, client orders have normalized and profitability is expected to improve through expanded shipments of small box products, anticipating a turnaround in the third quarter.