Shinsegae posted its highest-ever quarterly results in the first quarter, helped by stronger competitiveness in its core department store business and improved profitability at consolidation subsidiaries.
Shinsegae Co. said on the 12th that under consolidation standards for the first quarter, it logged sales of 3.2144 trillion won and operating profit of 197.8 billion won. Compared with a year earlier, sales rose 11.7% and operating profit jumped 49.5%. Despite an uncertain external environment, including a strong dollar and high oil prices, investments to boost department store competitiveness and efforts to improve the management structure of subsidiaries translated into results, it said.
In the first quarter, the department store business recorded sales of 2.0257 trillion won, up 13.0% from a year earlier. Operating profit rose 30.7% in the same period to 141 billion won, marking an all-time high. By refocusing its brand portfolio and bringing in trendy pop-up stores to strengthen its core business, sales grew sharply among domestic shoppers as well as foreign customers.
At Shinsegae's main store, sales to foreign customers rose 140% from a year earlier, and total foreign sales at the department stores roughly doubled from last year. Shinsegae expects foreign sales at its department stores to top 1 trillion won this year.
Results at consolidation subsidiaries also improved across the board. Shinsegae International posted first-quarter sales of 295.6 billion won and operating profit of 14.8 billion won. Those figures were up 15.7% and 452.6%, respectively, from a year earlier. The imported fashion institutional sector and imported cosmetics institutional sector grew 35.2% and 20.0%, respectively, driving top-line expansion, while in-house fashion brands such as Studio Tomboy, L'ILI, and Man on the Boon rebounded on operating efficiencies and rebranding effects.
Shinsegae International plans to pursue further profitability improvements based on overseas expansion of in-house brands such as AMUSE and Yunjac, and the performance of new brands including PB Philo, CFCL, and Enfant Riche Déprimé.
Shinsegae DF swung to a profit with sales of 589.8 billion won and operating profit of 10.6 billion won. Despite rent burdens following the end of rent reductions for Terminal 2 at Incheon International Airport, measures to improve the management structure showed results, including expanded global partnerships targeting free independent travelers (F.I.T), improved bulk-sale discount rates, and the introduction of competitive K-content. The company said that, having completed its final withdrawal from Incheon International Airport DF2 on the 27th, it expects momentum for further performance improvement going forward.
Shinsegae Central reported sales of 98.8 billion won and operating profit of 26 billion won. Those were up 11.4% and 17.1%, respectively, from a year earlier.
Shinsegae CASA posted sales of 111.4 billion won and operating profit of 1.3 billion won. Thanks to the acquisition of the JAJU business, sales increased 78.8% from a year earlier, and operating profit rose 1,200%. The company expects additional performance improvements once the JAJU business stabilizes.
Shinsegae Live Shopping recorded sales of 89.8 billion won and operating profit of 7.4 billion won. Those increased 10.7% and 29.8%, respectively, from a year earlier. Growth of in-house brands such as Shinsegae Men's Collection and Blue Fit, along with strong sales of premium fashion brands such as Guy Laroche and Sisley, drove the improved results.
Shinsegae held a board meeting on the 12th and resolved to pay its first quarterly dividends. The record date is the 29th, and total dividends amount to about 11.4 billion won. Common shareholders will receive 1,300 won per share.
Shinsegae plans to enhance shareholder value through the introduction of quarterly dividends while also continuing investments in major store renovations and differentiated content to boost corporate value.
A Shinsegae official said, "Despite difficult external conditions, both scale and profitability grew significantly on the back of proactive management-structure improvements and strategic investments," adding, "We will continue to enhance shareholder value through active shareholder returns and pursue ongoing investment and structural improvements to raise corporate value."