Total Sales Reach 2.7089 Trillion KRW, Up 4%
Department Store Operating Profit Recorded at 88.3 Billion KRW
Duty-Free Business Continues to Face Losses
Shinsegae announced on the 8th that its consolidated operating profit for the third quarter was preliminarily estimated at 93 billion KRW, down 29% from the same period last year. Total sales increased by 4% to 2.7089 trillion KRW.
Among these, the department store business recorded total sales of 1.6877 trillion KRW, up 2.1% compared to the third quarter of last year. Operating profit was 883 billion KRW, down 4.5 billion KRW from the same period last year due to increased depreciation expenses from renewal investments in major stores such as Gangnam, Daegu, and Times Square.
Shinsegae Department Store's majority of outlets continued to grow sales through the third quarter, and plans to sustain growth in the fourth quarter by unveiling the new main building ‘Shinsegae Square’ and leveraging various content.
Consolidated subsidiaries also maintained sales growth. Shinsegae Live Shopping recorded net sales of 77 billion KRW (16.3%) and operating profit of 1.3 billion KRW. The rise of in-house fashion brands newly launched this fall such as EditionS, Bluefit, and Edited, along with the synergy effect of differentiated products linked with affiliates, contributed to the external growth. Despite a temporary loss of 2.8 billion KRW due to the unsettled T-Mef incident, operating profit increased compared to the previous year.
Shinsegae DF posted net sales of 471.7 billion KRW (8.2%) and an operating loss of 16.2 billion KRW. The company explained that operating profit declined due to increased rent at Incheon Airport, sluggish Chinese consumption, and the won-dollar exchange rate gap, but external growth continues.
Shinsegae Casa recorded net sales of 68.6 billion KRW (10.1%) and operating profit of 200 million KRW (2 billion KRW). Thanks to the popularity of competitive in-house brands such as the bestseller ‘Campo’ and the sleep-specialized brand ‘Materasso,’ it achieved both external growth and sound management, signaling a positive outlook for annual profitability this year. Shinsegae International posted consolidated net sales of 296 billion KRW (-6.3%) and operating profit of 2.1 billion KRW (-3.9 billion KRW). Additionally, Shinsegae Central City recorded net sales of 94.4 billion KRW (0.2%) driven by strong hotel division sales and achieved operating profit of 25.9 billion KRW (1 billion KRW).
A Shinsegae official said, "Despite weakened consumer sentiment and a challenging distribution environment, most subsidiaries including the department store achieved sales growth," adding, "As a content creator, the department store will lead the industry while simultaneously enhancing the core competitiveness of subsidiaries to continue sound growth."
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