Seoul: Shinsegae Inc., the operator of South Korea's major department store chain, reported a significant increase in its first-quarter net income, with figures nearly doubling from the previous year. This growth is attributed to robust department store sales, which were bolstered by a rise in foreign travelers.
According to Yonhap News Agency, Shinsegae's net profit for the January-March period reached 145.4 billion won (US$98 million) on a consolidated basis. This represents an 88.5 percent increase from the 77.1 billion won recorded during the same period last year, as disclosed in a regulatory filing by the company. Operating profit also experienced a substantial increase, surging 49.5 percent on-year to 197.8 billion won, while sales climbed 10.9 percent to 1.84 trillion won.
The company's financial performance surpassed market expectations, with analysts initially estimating a net profit of 74.7 billion won, based on a survey conducted by Yonhap Infomax, the financial data arm of Yonhap News Agency. The stronger-than-anticipated earnings were primarily driven by significant sales growth in Shinsegae's department store business.
The department store division reported sales of 2 trillion won, marking a 13 percent increase from the previous year. This growth was supported by revamped store spaces and a surge in foreign visitors. Sales from foreign customers soared 90 percent year-on-year, making up 6.9 percent of the total sales.
Shinsegae International, the company's fashion and cosmetics subsidiary, also saw a rise in sales, reaching 295.6 billion won for the first quarter. This is a 15.7 percent increase from the previous year, driven by the growing demand for imported cosmetics brands. Additionally, the duty-free retail division experienced a 5 percent on-year rise in sales, totaling 589.8 billion won, as overseas travel began to rebound.
Separate government data highlighted a 23 percent increase in the number of foreign visitors, reaching a record 4.76 million in the January-March period, further supporting Shinsegae's positive financial results.