Shinsegae (004170.KS) saw its stock price rise on the back of strong performance in its department store division. Buying momentum has been building as investors anticipate a recovery in previously underperforming segments including duty-free operations and Shinsegae International (031430.KQ).
According to Korea Exchange (KRX) data on Monday, Shinsegae closed at 323,500 won the previous trading day, up 6.07%. Department store stocks broadly gained, with Lotte Shopping rising 5.13% and Hyundai Department Store up 0.66%, but Shinsegae posted the largest advance.
Strong earnings expectations are cited as the key driver behind Shinsegae's rally. Market sentiment improved as securities analysts forecast the company will deliver an earnings surprise in the first quarter of this year. Bae Song-i, an analyst at Mirae Asset Securities, projected in a recent report that Shinsegae would post net sales of 1.7979 trillion won and operating profit of 167.3 billion won in Q1. "Luxury goods are showing high growth at the 30% level, and fashion is also growing more than 10%, so we expect results that capture both top-line and margin gains," Bae said. "We are also seeing significant improvement in previously underperforming business segments including duty-free and Shinsegae International."
Daishin Securities also offered a positive outlook. Yoo Jung-hyun, an analyst at Daishin Securities, said, "Although concerns about a consumption slowdown are rising as the war in the Middle East drags on, the department store industry is expected to record solid growth this year." Yoo added, "This is because high exchange rates are limiting overseas spending while inbound tourism demand is likely to remain steady." Mirae Asset Securities and Daishin Securities raised their target prices for Shinsegae to 450,000 won and 460,000 won, respectively.
Hanwha Investment & Securities forecast that Shinsegae would achieve an overwhelmingly higher growth rate compared to its peers. Lee Jin-hyup, an analyst at Hanwha Investment & Securities, noted, "Driven by strong domestic demand and inbound sales growth, the department store's same-store sales growth rate is estimated at 22% year-on-year in Q1 this year." Lee added, "The company will demonstrate an overwhelming growth rate thanks to its higher luxury goods ratio compared to competitors."
April 7, 2026 (Tuesday) Securities Section Unboxing [ON AIR Seoul Economy]
