SOUTH KOREA. Shinsegae Duty Free, the Republic’s third-biggest travel retailer by sales, posted an +80.6% year-on-year increase in Q4 net sales to KW823 billion (US$688.4 million).
Enhanced operating profit of KRW12 billion (US$10 million) was in line with market expectations.
Net profit (- KRW4 billion) also represented a sharp improvement over the same quarter last year (see table below).
Parent company Shinsegae said that duty free sales increased due to stable demand from daigou traders (+81%). Downtown sales rose +82% year-on-year with airport revenues up +21% from a very low base due to relaxing social distance restrictions.
For the full year, sales rose +57.1% over a troubled 2021 to KRW2,660 billion (US$2.2 billion). Operating performance turned from a heavy KRW87 billion loss into a KRW78 billion gain (US$65.2 million). Net profit saw a much-improved result with a loss of KRW7 billion.
In a note, BofA Global Research said: “POS-based gross sales for DFS also grew by +29% YoY, ahead of the industry growth (+19% YoY). DFS OP of W12.3bn (vs. W2.6bn OP in 4Q20) was largely in line.”
BofA said that in terms of 2022 guidance, Shinsegae estimates gross sales growth for its duty free arm of around +10% year-on-year and OP growth of around +5%.
