Shinsegae reports better than expected net profit of $118.2 million

Shinsegae Department Store's Gangnam branch in southern Seoul. [SHINSEGAE DEPARTMENT STORE]

Shinsegae reported an expectation-beating net profit of 150.9 billion won ($118.2 million), up 69.2 percent on year.

Net profit was more than double the market consensus of 74.8 billion won compiled by FnGuide.

The company logged revenue of 1.77 trillion won, up 33.8 percent on year and higher than the market expectation of 1.68 trillion won.

Shinsegae runs Shinsegae Department Store, Shinsegae Duty Free and subsidiaries like Shinsegae International.

Its department store business logged sales of 585.3 billion won, up 18.7 percent on year. Operating profit rose 47.6 percent on year to 121.5 billion won.

Golf wear helped the growth with sales rising 54.6 percent on year. Mens’ wear sales rose 23.7 percent and women’s wear rose 21.7 percent.

Sales from its duty-free business jumped 61.2 percent on year to 772.1 billion won. The company said branches at airports saw sales rise 134 percent on year due to international travelers returning from lifted quarantine restrictions.

It reported a 2.1-billion-won operating loss compared to an operating profit of 23.1 billion won the previous year. The company blamed the Shanghai lockdown and rising Covid-19 cases in China from preventing travelers from entering the country, who used to make up for a large portion of duty-free purchases. Sales from daigong, or professional Chinese sellers who buy duty-free items in bulk to re-sell in China, haven’t fully recovered, but slightly increased 3 percent on year.

The company's apparel retailer Shinsegae International logged sales of 352.2 billion won, up 3 percent on year. Operating profit jumped 55.4 percent on year to 33.1 billion won as demand for fashion returned with Covid-19 transitioning into an endemic.

Shinsegae shares rose 3.89 percent to 254,000 won on Wednesday.

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]