Shinsegae Inc.'s profit drops 50% on year, base effect blamed

Industry

Published: 07 Nov. 2022, 16:49

Shinsegae Inc.'s profit drops 50% on year, base effect blamed

Shinsegae Inc. reported a net profit of 94.5 billion won in the third quarter ($67.4 million), down 50 percent on year.

The figure fell short of analyst expectations of 101.5 billion won as compiled by FnGuide.

Shinsegae said the on-year drop was largely due to the base effect from a one-off gain a year earlier. In the third quarter of 2021, the company booked a 146.6 billion won gain after it increased its stake in Gwangju Shinsegae.

In September last year, Shinsegae acquired 52.08 percent of Gwangju Shinsegae, which operates the department store’s Gwangju branch. It now owns a total 62.5 percent of Gwangju Shinsegae.

The company logged revenue of 1.96 trillion won, up 17.3 percent on year. The figure beat analyst expectations of a 1.93-trillion-won revenue.

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

Its department store business logged sales of 609.6 billion won, up 19.8 percent on year. The company said rising apparel sales helped, along with increasing purchases of food and Chuseok gift sets as families gathered for the first Chuseok without social distancing measures since the outbreak of Covid-19.

Operating profit jumped 50.5 percent on year to 109.4 billion won.

Sales from its duty-free business rose 7.5 percent on year to 856.6 billion won. The company said visitors to airport duty-free branches surged 287 percent on year as many turned to international travel, although non-airport branch sales only rose 5 percent.

Operating profit fell 77.7 percent on year.

Shinsegae International logged sales of 387.5 billion won, up 10.7 percent on year. Operating profit rose 70.9 percent on year.

Shinsegae Casa's sales grew 12.8 percent on year to 67.9 billion won. The operating loss was 5.8 billion won, compared to an operating loss of 1.1 billion won the previous year.

The company blamed the drop in the number of housing transactions.

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