Hyundai Department Store (069960) Q1 2025 earnings summary

Executive summary

• Achieved solid department store performance and improved consumer sentiment post-presidential election, reinforcing its defensive stock status during economic downturns.

• Consolidated Q1 2025 revenue reached KRW 1,098.1 billion, up 15.4% year-over-year, with operating income of KRW 112.5 billion and net income of KRW 88.3 billion; department store, duty-free, and furniture manufacturing segments all contributed to growth.

• Subsidiaries, especially Duty Free and Zinus, showed significant turnaround driven by structural improvements and channel diversification, supporting sustainable profit growth.

• Shareholder return initiatives, including share buybacks and increased dividends, exceeded previously announced value-up plans.

• Total assets stood at KRW 11.36 trillion, liabilities at KRW 5.08 trillion, and equity at KRW 6.28 trillion as of March 31, 2025.

Financial highlights

• Q1 2025 consolidated gross sales rose 5.0% YoY to KRW 2,555bn; net sales up 15.4% YoY to KRW 1,098bn.

• Gross profit increased 14.8% YoY to KRW 643bn, with gross margin improving from 23.0% to 25.2%.

• Operating profit surged 63.3% YoY to KRW 112bn; net profit up 24.8% YoY to KRW 88bn.

• Operating margin rose to 10.2% from 7.2% in Q1 2024.

• Cash and cash equivalents increased to KRW 212.3 billion from KRW 125.9 billion at year-end 2024.

Outlook and guidance

• Duty Free expected to turn around in H2 2025 due to downtown store reduction and focus on airport operations.

• Expansion plans include new department stores and outlets in Cheongju (2025), Busan (2027), Gwangju (2027), and Gyeongsan (2028).

• Furniture manufacturing aims for global growth, especially in North America and online channels.

• Additional share buybacks under discussion for 2025, funded by Hyundai Home Shopping stake sale.

• Strategic asset shifts, including new mega flagship stores and premium outlets, are projected to drive future profitability and ROE improvement.