On the back of strong performance in its core department store business, Shinsegae is expected to surpass 7 trillion won in sales this year. It will be the first time in four years since 2022 that Shinsegae posts more than 7 trillion won in sales.
At the end of this month, Shinsegae's duty-free subsidiary, Shinsegae DF, will withdraw from the DF2 (liquor and tobacco) zone in Terminal 2 at Incheon Airport, making an annual sales decline of around 300 billion won unavoidable. Even so, analysts say growth at the department stores—driven by the main store's renewal effect, the competitiveness of the Gangnam store, and rising foreigner sales—will deliver top-line growth that more than offsets the decline.
According to FnGuide on the 24th, Shinsegae is estimated to post 7.1276 trillion won in sales and 619.2 billion won in operating profit this year. Compared with last year, sales would rise 2.9% and operating profit 29%.
In 2022, Shinsegae recorded all-time high results with 7.8128 trillion won in sales. However, in 2023, total sales fell to 6.3571 trillion won due to a sharp drop in results at duty-free subsidiary Shinsegae DF. After 6.5704 trillion won in 2024 and 6.9295 trillion won in 2025, the company is again on the verge of reentering the 7 trillion won sales range this year.
Sales indicators at the department stores have been strong since the start of the year. With the luxury category continuing high growth of around 20%, the fashion category is also recovering, lifting both sales and profitability, according to analyses.
Jang Min-ji, a Kyobo Securities analyst, said, "Shinsegae's first-quarter department store managed sales (gross merchandise value) growth rate is expected to be about 20%, likely the highest growth rate in the department store sector."
The Myeong-dong main store, which has been renewed since last year to focus on luxury and attract more foreign shoppers, is emerging as a key outlet. According to Shinsegae Department Store, first-quarter luxury sales at the main store rose 29.8% from a year earlier. During the same period, luxury jewelry increased 55.6% and luxury watches 36.9%, driving overall growth.
An expansion in foreign consumer spending is also emerging as a new growth pillar for the department stores. According to the Ministry of Culture, Sports and Tourism, the number of foreign tourists visiting Korea in the first quarter rose 23% on-year to 4.76 million, a record high for a first quarter.
Brokerages estimate Shinsegae Department Store's first-quarter foreigner sales growth rate at about 80% to 90% year over year. Orin-a, an LS Securities analyst, said, "The share of foreigner sales in Korea's department store industry still remains in the mid- to high-single digits across all stores," adding, "Given the increase in foreign tourist numbers and the diversification of consumption channels, there is considerable room for further gains."
Shinsegae Department Store's strength also includes its broad presence in key commercial districts in both Seoul and the regions. Shinsegae holds No. 1 local sales stores at major hubs including the Gangnam store in Seoul, the Centum City store in Busan, the Daegu store, and Daejeon Art&Science.
While department stores are leading top-line growth, the duty-free business, long seen as a drag on results, has entered a phase of profitability improvement. Shinsegae Duty Free will exit the DF2 zone at Incheon Airport at the end of this month. The zone generated around 400 billion won in annual sales, making about a 300 billion won sales decline inevitable for Shinsegae Duty Free this year.
However, because airport duty-free stores carry heavy rent burdens, the duty-free segment's profitability is expected to improve as expenses ease despite a smaller top line. The industry expects Shinsegae Duty Free to swing to a profit from the second quarter after returning the DF2 zone.
Other subsidiaries are also expected to help improve results. Shinsegae International, which posted a 11.5 billion won loss last year, is shifting its business toward cosmetics over overseas fashion and is projected to return to profit this year. Shinsegae Casa is expected to narrow its losses thanks to the transfer of the JAJU division, and Shinsegae Live Shopping is also projected to maintain moderate growth.
Nam Seong-hyun, an IBK Securities analyst, said, "With the main store renewal effect, inbound demand, and improved duty-free profitability coming together, Shinsegae's earnings momentum is likely to continue into the second half."