"Foreign Visitors and Consumer Sentiment Drive Growth"... Hyundai Department Store's Q3 Operating Profit Up 12.3% YoY

Cumulative Operating Profit Reaches 271.9 Billion Won This Year, Up 54.2% Year-on-Year
"Department Store Performance Improves Thanks to Influx of Foreign Customers and Strong Consumer Sentiment"

Hyundai Department Store has shown growth in both sales and operating profit this year, driven by an increase in foreign visitors and strong performance in the department store sector.

According to the Financial Supervisory Service’s electronic disclosure system on November 5, Hyundai Department Store’s consolidated operating profit for the third quarter was provisionally tallied at 72.6 billion won, up 12.3% year-on-year. Cumulative operating profit for the first to third quarters of this year reached 271.9 billion won, a 54.2% increase compared to the same period last year.

Third-quarter sales amounted to 1.0103 trillion won, a decrease of 2.6% from the previous year. Net profit for the period was 47.6 billion won, up 67.4%. Cumulative sales for the year reached 3.1886 trillion won, a 5.9% increase year-on-year.

This is attributed to improved performance in the core department store business and an increase in foreign visitors. In the third quarter of this year, the department store segment recorded sales of 576.8 billion won and operating profit of 89.3 billion won, up 1.5% and 25.8% respectively from the previous year. All product categories in the department store performed well, and the recovery in consumer sentiment accelerated the growth trend. In addition, the proportion of foreign sales at Hyundai Department Store has continued to rise this year. For the department store segment, the share of foreign sales increased from 1.5% in 2019 to 5.5% last year, and is expected to exceed 6% this year. The company expects foreign sales to reach about 600 billion won this year, representing growth of about 20% compared to last year.

A Hyundai Department Store representative said, "The growth momentum of the department store segment has been strengthened by the Korean content boom and the visa-free entry policy for Chinese visitors, which have led to an increase in foreign customers. In addition, thanks to the government's economic stimulus measures and the resulting recovery in consumer sentiment, sales of major product categories such as fashion, luxury goods, and high-end jewelry have been strong, leading to a significant increase in both sales and operating profit."

Duty-free sales reached 222.5 billion won, down 2.5% year-on-year, mainly due to the closure of the Dongdaemun branch. However, thanks to strong performance at airport locations and operational efficiency improvements, operating profit turned positive, recording 1.3 billion won. The company stated its goal to accelerate qualitative growth in the duty-free segment, focusing on profitability through increased tourist numbers and cost efficiency.

Global online furniture and mattress company Zinus posted sales of 241.7 billion won, down 11.4% year-on-year, due to a temporary decline in orders following U.S. tariff hikes and a delayed effect from price increases. During the same period, the company recorded an operating loss of 19.7 billion won, returning to the red.

The company expects the high growth trend in the department store segment to continue going forward. A Hyundai Department Store representative explained, "With the government's economic stimulus measures, consumer sentiment is recovering, and strong sales across all product categories, including fashion, are expected to support steady growth. Sales growth has continued through the third quarter, and growth momentum is expected to strengthen in the fourth quarter with strong performance from new F/W collections." The representative added, "The completion of the APEC Korea-U.S. tariff negotiations in October has alleviated concerns about sluggish exports that were expected to limit domestic demand recovery next year. As a result, we anticipate that stable consumption trends will continue next year, sustaining our growth trajectory."