Shinsegae operating profit soars 7% on year as subsidiaries flourish

Shinsegae Department Store in Gangnam District, southern Seoul. [YONHAP]

Shinsegae reported 163 billion won ($120 million) in operating profit for the first quarter, marking a 7 percent increase over a year ago thanks to growth across its subsidiaries.

The figure surpassed the market consensus of 162.7 billion won compiled by market tracker FnGuide.

Sales rose 2.6 percent to 1.6 trillion won, slightly below the analysts’ expectations of 1.63 trillion won. The company recorded 1.5 trillion won in sales last year.

Shinsegae saw better performance from major subsidiaries, including its crown jewel department stores.

Sales of its department store business increased 7.9 percent year-on-year to 1.8 trillion won, a record high for quarterly sales, according to the company’s press release.

Shinsegae Casa recorded an operating profit of 1 billion and sales of 68.5 billion won from January to March this year, successfully making a turnaround.

Shinsegae Live Shopping, the unit in charge of the group's TV-based online shopping business, posted an operating profit of 5.6 billion won, jumping 6.2 billion, along with sales of 78.2 billion won. The surge is attributed to strong performance by its private fashion brands such as Blue Fit, Edited, and Ellaconic.

Sales of Shinsegae DF, a duty-free shop operator, fell 4.8 percent from the previous year to 486.7 billion won. However, the company expects to improve owing to continued traffic growth at Incheon International Airport.

Shinsegae Central City’s operating profit and sales increased to 26.2 billion won and 88.9 billion won, respectively.

Shinsegae International recorded 11.2 billion won in operating profit, up 8.9 percent, and 309.4 billion won in sales, down 0.9 percent, but the growth of the cosmetics business in Shinsegae International was particularly notable.

The cosmetic division marked a record high in quarterly sales after it posted an operating profit of 6.5 billion won and sales of 104.3 billion won. The performances of its beauty brands, such as Yunjac, Poiret, and Swiss Perfection, significantly boosted Shinsegae International’s overall earnings.

BY CHOI HAE-JIN [choi.haejin@joongang.co.kr]