Hyundai Department Store (069960) Q2 2024 earnings summary

Executive summary

• Q2 2024 gross sales declined by 0.6% year-over-year to KRW 2,477bn, while net sales increased by 5.5% to KRW 1,024bn.

• Operating profit for Q2 dropped 23.0% year-over-year to KRW 43bn, with a margin decrease to 1.7%.

• Net profit turned to a deficit due to extraordinary losses from asset disposals, despite stable recurring profit.

• Revenue for H1 2024 was KRW 1,975.5 billion, with operating income of KRW 111.7 billion and a net loss attributable to controlling interests of KRW 77.2 billion.

• The company operates across department stores, duty-free, and furniture manufacturing, with ongoing expansion in outlets and new business lines.

Financial highlights

• Cumulative gross sales for FY24 rose 1.1% year-over-year to KRW 4,909bn.

• Cumulative net sales decreased 4.5% to KRW 1,976bn, and cumulative operating profit fell 16.3% to KRW 112bn.

• H1 2024 consolidated revenue: KRW 1,975.5 billion, down from KRW 2,068.0 billion in H1 2023.

• Net loss attributable to controlling interests: KRW 77.2 billion (H1 2023: net profit of KRW 74.5 billion).

• Extraordinary losses included a KRW 241bn valuation/disposal loss from Hyundai Home Shopping shares.

Outlook and guidance

• Zinus sales and operating profit are expected to rebound in the second half of the year with new product shipments and new orders.

• The company is pursuing growth through new store openings in Cheongju, Busan, and Gwangju, with significant capital expenditures planned through 2027.

• New business lines in cosmetics and travel are being developed, though expected to have minimal impact on core earnings in the near term.