Shinsegae posts record third-quarter operating profit of 164.3 billion won, up 64.6% year on year

[Financial News] Shinsegae posted its highest-ever operating profit for a third quarter, buoyed by growth in its department store business and improved profitability at key subsidiaries.
According to the Financial Supervisory Service's Data Analysis, Retrieval and Transfer System (DART), Shinsegae's consolidated operating profit for the third quarter of this year rose 64.6% year on year to 164.3 billion won. Revenue for the same period increased 3.2% to 2.9034 trillion won.
The department store business achieved both top-line growth and improved profitability. The department store division's third-quarter revenue, combining separately incorporated entities such as Gwangju, Daegu and Daejeon Shinsegae Art & Science, rose 8.5% year on year to 1.8565 trillion won. Operating profit for the same period increased 23.5% to 103.7 billion won.
Sales growth was also strong at major stores. This year's third-quarter sales at the Shinsegae Department Store Main Store rose 44% year on year, while sales at the Gangnam and Centum City branches increased 17% and 14%, respectively. Strengthening the competitiveness of luxury and contemporary brands, attracting distinctive food and beverage (F&B) brands, and expanding experiential content are believed to have contributed to the improved results.
Growth in the number of international customers also supported sales. Shinsegae Department Store's cumulative sales to international customers from the first through the third quarter of this year totaled 850 billion won, more than doubling year on year to an all-time high. The increase reflected greater spending by international tourists, particularly at major stores such as the Main Store, Gangnam and Centum City branches.
Consolidated subsidiaries also contributed to the improved results. In particular, Shinsegae DF, Shinsegae Central, Shinsegae Casa and Shinsegae Live Shopping Inc. each posted their highest-ever operating profit for a third quarter.
Shinsegae DF, which operates the duty-free business, recorded third-quarter revenue of 451.1 billion won, down 16.3% year on year, but returned to profit with operating profit of 25.3 billion won. Operating profit improved by 30.9 billion won from the same period a year earlier, reaching its highest level ever for a third quarter. Expanded customer-focused services, including VIP services coordinated with affiliates such as the department store business and premium airport pickups, contributed to improved profitability. The cumulative number of members this year rose 27% year on year, while average spending per customer increased 15%.
Shinsegae Central posted third-quarter revenue of 107.2 billion won and operating profit of 31.2 billion won. The figures were up 9.3% and 13.0%, respectively, year on year. For the first time since it became part of Shinsegae in 2012, its third-quarter operating profit topped 30 billion won. The result reflected steady performance in its existing leasing business, supplemented by growth in its hotel business amid rising demand from international customers.
Shinsegae International Inc. also returned to profit. Its revenue for the third quarter of this year rose 16.6% year on year to 299.5 billion won, while operating profit reached 5.1 billion won, turning positive.
By business segment, revenue from fashion and cosmetics rose 17.3% and 15.9%, respectively, year on year. Overseas brands such as UGG and Herno drove growth in fashion, while sales of in-house cosmetics brands including YUNJAC and VIDIVICI increased 18.4%.
Shinsegae Live Shopping Inc. posted third-quarter revenue of 84.8 billion won and operating profit of 3.2 billion won, up 0.2% and 33.3%, respectively, year on year. Its operating profit was the highest for a third quarter since it became part of Shinsegae in the third quarter of 2022. Strengthening product competitiveness, particularly through its in-house fashion brands Shinsegae Men's Collection, Bluefit and Edited, contributed to the improved results.
Shinsegae Casa also achieved both top-line growth and a return to profit. Third-quarter revenue rose 85.0% year on year to 118.2 billion won, while operating profit turned positive at 900 million won. Building its business portfolio with JAJU, expanding sales of key products such as Campo, and strengthening its online-exclusive product lineup supported the improved results.
Starting in the third quarter of this year, Shinsegae will strengthen its shareholder-return policy. It plans to increase quarterly dividends to around twice their previous level and also retire treasury shares to enhance shareholder value.
A Shinsegae representative said, "The competitiveness of our core department store business and improvements in our subsidiaries' management fundamentals have translated into results, allowing us to post our highest-ever third-quarter operating profit." The representative added, "We will continue investing for the future while building momentum for an overwhelming competitive edge through the business specialization of each company."

[email protected] Jang Yu-ha Reporter