[Edaily Reporter Kim Kyung-eun] On the 15th, Daishin Securities raised its target price for #Shinsegae to 1 million won, a 67% increase from the previous level, citing expectations of strong domestic and inbound sales. The firm maintained its “Buy” rating.

In a report released that day, Daishin Securities analyst Yoo Jeong-hyun stated, “Shinsegae’s major affiliates are all in business sectors that benefit significantly from the increase in inbound tourism, and we expect the trend of substantial simultaneous improvements in the performance of department stores and major subsidiaries to continue this year.”

Researcher Yoo noted, “The domestic department store industry has entered a new growth phase, driven not only by the recovery of domestic consumption but also by a surge in sales from inbound tourists,”

and has entered a new phase of growth,” adding, “The trend of rising foreign sales is expected to continue for the time being, given the popularity of K-culture and the weakening won.”

He further predicted, “Just as the Japanese department store industry saw its valuations re-rated due to increased foreign sales in 2023–2024, the Korean department store industry is also expected to continue its re-rating alongside improved performance for the time being.”

Shinsegae’s consolidated total sales and operating profit for the second quarter are expected to be 3.2957 trillion won and 161.3 billion won, respectively. These figures represent year-over-year increases of 14% and 114%, respectively.

Same-store sales growth for department stores in the second quarter is estimated at 26% on a managed basis. Based on favorable consumer sentiment driven by the asset effect, the outlook is that margins will improve as domestic fashion—a high-margin category—continues to grow at a double-digit rate. In particular, the firm expects that the growth rate of sales to foreign customers will expand from 90% in the first quarter to over 110% in the second quarter (over 200% at the main store), driving department store sales growth.

Analyst Yoo stated, “The growth rate of the existing Myeongdong flagship store, which attracts a high concentration of foreign customers, exceeded 70% in the second quarter, up from 55% in the first quarter,” adding, “We expect the growth rate to be upgraded again in the second quarter due to domestic and international factors such as the weak won and the lifting of the Korea-Japan travel ban.”

Shinsegae DF projected that duty-free sales would grow due to increased revenue from individual travelers (FIT) and the expansion of regular store space at airport locations, while operating profit is expected to return to a surplus year-on-year due to lower discount rates at downtown stores. Shinsegae Inter is also expected to return to profitability, driven by strong domestic fashion consumption.