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Photo courtesy of Yonhap News |
[Alpha Biz= Ellie Kim] IBK Securities maintained a “Buy” rating and a target price of KRW 130,000 on Hyundai Department Store, noting that solid performance in its core retail and duty-free businesses helped offset weaker overall earnings.
On May 6, Hyundai Department Store shares closed down 3.58% at KRW 107,700.
In a report released on May 7, IBK Securities said the company’s overall performance was weighed down by weak results at its subsidiary Zinus. First-quarter consolidated net sales declined 13.5% year-on-year to KRW 950.1 billion, while operating profit fell 12.2% to KRW 98.8 billion.
Despite this, both the department store and duty-free segments delivered solid results. Analyst Nam Sung-hyun noted that department store revenue rose 7.4% year-on-year, with operating profit surging 39.7% to KRW 135.8 billion, driven by strong sales of high-margin products and luxury goods.
The duty-free business also recorded growth and returned to profitability. “Airport store sales remained stable on rising inbound tourism demand, and reduced discount rates helped the segment post an operating profit of KRW 3.4 billion,” Nam said. He added that profitability has been sustained following the closure of the Dongdaemun store, with further gains expected in the second quarter as the DF2 store—focused on luxury and fashion—opens.
However, Zinus’ underperformance remains a key concern. Nam attributed the weakness primarily to price increases. “One-off base effects in 2025 and tariff-driven price hikes led to weaker demand, resulting in an operating loss of KRW 30.1 billion, a deterioration of KRW 57.6 billion year-on-year,” he said.
Looking ahead, IBK Securities identified three key catalysts for the second half: continued growth in the core retail and duty-free businesses, recovery at Zinus, and expansion of global operations.
Nam emphasized that improvements in Zinus’ efficiency, combined with expansion at department stores and Incheon Airport duty-free operations, could drive performance. He also highlighted the growth potential of “The Hyundai Global” concept.
As part of its global strategy, Hyundai Department Store has opened a Korea-themed pop-up store in Japan and is preparing to launch another location in Tokyo’s Omotesando district in July. “Building on the success of its test store, the company plans to open a flagship ‘The Hyundai Store’ spanning around 200 pyeong,” Nam said, adding that further expansion could help overcome limitations of the domestic market and broaden its global footprint.
Alphabiz Ellie Kim 인턴기자(press@alphabiz.co.kr)
