Hyundai Department Store said in a filing on the 6th that its preliminary results for the first quarter show revenue of 950.1 billion won and operating profit of 98.8 billion won. Compared with a year earlier, revenue fell 13.5% and operating profit fell 12.2%.
However, the department store institutional sector, its mainstay, showed solid growth. First-quarter net revenue for Hyundai Department Store's department store institutional sector rose 7.4% on-year to 632.5 billion won. It was the highest first-quarter revenue on record. Operating profit for the department store institutional sector also increased 39.7% from a year earlier to 135.8 billion won.
Expanded sales of high-margin fashion categories drove the improvement in department store results. Since the fourth quarter of last year, sales of fashion items such as winter outerwear have increased, and profitability improved as consumption focused on overseas luxury brands spread across all categories, including domestic fashion brands.
An increase in sales to foreign customers also supported the strong performance of the department store institutional sector. Among all Hyundai Department Store locations, The Hyundai Seoul, which attracts the most foreign visitors, saw first-quarter sales to foreign customers jump 121% from a year earlier.
The duty-free institutional sector continued its profitability improvement trend. Hyundai Duty Free posted operating profit of 3.4 billion won in the first quarter, an improvement of 5.3 billion won from a year earlier, returning to the black. It marked a profit for three consecutive quarters following 1.3 billion won in the third quarter and 2.1 billion won in the fourth quarter last year. However, due to factors such as the downsizing of downtown duty-free stores, net revenue for the duty-free institutional sector fell 27.2% on-year to 213.7 billion won.
Subsidiary ZINUS posted revenue of 139.6 billion won in the first quarter, down 44.2% from a year earlier. It swung to an operating loss of 30.1 billion won in the same period. Amid rising global macroeconomic uncertainty, a decline in mattress demand from U.S. clients reduced both revenue and operating profit.
A Hyundai Department Store official said, "In the second quarter, the department store institutional sector is expected to continue its growth trend as sales across all categories, including high-margin fashion, continue to expand."