Hyundai Department Store (069960) Q2 2025 earnings summary

Executive summary

• Consumer sentiment is recovering, aided by government stimulus and consumption vouchers, supporting stable department store performance and a rebound in the fashion segment.

• Duty-free business is expected to turn around in H2, driven by cost efficiency from consolidating operations and increased inbound Chinese travelers due to relaxed visa requirements.

• Tariff risks for Zinus have been mitigated by a US-Indonesia agreement lowering mattress tariffs, and diversification of production to Cambodia.

• Shareholder value initiatives include a 1.3% share buyback, the first interim dividend of KRW 10.8bn, and plans to increase annual dividends to KRW 50bn by 2027.

• The company operates across department stores, duty-free, and furniture manufacturing, with 26 consolidated subsidiaries and a diversified business model including recent expansion into cosmetics and travel services.

Financial highlights

• Q2 FY2025 consolidated gross sales were KRW 2,474bn, down 0.1% YoY; net sales rose 5.5% YoY to KRW 1,080bn.

• Q2 operating profit increased 102.8% YoY to KRW 87bn; net profit was KRW 54bn, up from a loss of KRW 145bn YoY.

• H1 FY2025 gross sales grew 2.4% YoY to KRW 5,029bn; net sales up 10.3% YoY to KRW 2,178bn.

• H1 operating profit rose 78.4% YoY to KRW 199bn; net profit was KRW 142bn, reversing a loss of KRW 75bn YoY.

• Segment revenue: Department stores KRW 1,179.1bn, duty-free KRW 587.0bn, furniture manufacturing KRW 479.4bn.

Outlook and guidance

• Duty-free segment expected to benefit from increased Chinese tourism and cost optimization, supporting a likely earnings turnaround in H2.

• Plans to further enhance shareholder returns through additional buybacks and increased dividends.

• Continued expansion with new department stores and outlets planned in Gwangju, Busan, and Gyeongsangbuk-do through 2028.

• Ongoing investment in furniture manufacturing capacity, including new facilities in Cambodia.

• Focus on premium services, digital transformation, and new business lines (cosmetics, travel) to drive future growth.