Hyundai Department Store’s Q3 operating profit jumps 30.1%...Department stores perform strongly, duty-free profitability improves

[Financial News] Hyundai Department Store boosted its operating profit by at least 30% in the third quarter of this year, driven by growth in both its department-store and duty-free businesses. Department-store profitability improved amid a boom in inbound tourism (foreign visitors to Korea) and strong sales of high-margin product categories, while the duty-free business continued to post profits for a fifth consecutive quarter.
According to the Financial Supervisory Service’s Data Analysis, Retrieval and Transfer System (DART) on the 4th, Hyundai Department Store’s consolidated operating profit for the third quarter of this year rose 30.1% year on year to 94.6 billion won. Revenue for the same period increased 16.0% to 1.1723 trillion won.
The department-store division recorded operating profit of 114.1 billion won, up 27.8% from a year earlier. Revenue rose 6.5% to 614.5 billion won. An increase in foreign customer visits and strong sales of key product categories, including fashion, luxury goods and high-end jewelry, drove the improvement in performance. Cumulative operating profit for the first three quarters of this year was 360 billion won, up 40.7% year on year.
The duty-free division also continued to improve its profitability. Operating profit rose 145.6% year on year to 3.2 billion won, while revenue increased 64.8% to 366.6 billion won. The business thus posted profits for five consecutive quarters. Cumulative operating profit this year was 12.8 billion won, marking a shift into the black from a year earlier. Hyundai Department Store attributed the results in part to an increase in arrivals and departures and sales growth in the DF2 area at Incheon International Airport, which opened last April. The DF2 area carries cosmetics, perfumes, liquor and tobacco.
By contrast, Zinus, the group’s furniture and mattress affiliate, struggled amid weaker consumer spending in the US market. Its third-quarter revenue fell 6.8% year on year to 225.2 billion won, and it posted an operating loss of 12.5 billion won. Its cumulative operating loss this year was 69.3 billion won, marking a shift into the red. The main factor was a decline in business customers’ mattress demand amid weaker consumer spending in the US, a key market. Hyundai Department Store said, however, that operating performance improved significantly from the previous quarter as customer orders gradually returned to normal and the effects of changes to its profit-and-loss structure began to be reflected.
A Hyundai Department Store representative said, “The department-store division saw increases in both sales and operating profit, driven by more foreign customer visits and strong sales of key product categories such as fashion, luxury goods and high-end jewelry. The duty-free business also saw both sales and operating profit rise, thanks to an increase in arrivals and departures and steady growth in the DF2 area at Incheon International Airport, which opened last April.” The representative added, “Zinus plans to continue restructuring across its business to sustain the improvement in profitability in the fourth quarter as well.”
[email protected] Kim Hyun-ji Reporter