Seoul: Shinsegae Inc., the operator of South Korea's second-largest department store chain by sales, announced on Tuesday a significant drop in its first-quarter net profit, which plunged by 40.5 percent compared to the previous year. The decline has been attributed to reduced consumer demand, impacting the company's overall financial performance.
According to Yonhap News Agency, in the three months ending in March, Shinsegae's net profit decreased to 77.1 billion won (approximately US$54.5 million), down from 129.6 billion won in the same period last year. The company disclosed this information through a regulatory filing, highlighting the challenges posed by sharply reduced consumer spending in the domestic market.
A spokesperson for Shinsegae stated that the company's equity gains from affiliates, which include Shinsegae DutyFree and fashion retailer Shinsegae International, also suffered due to the impact of a weaker won and dampened consumer sentiment. These factors collectively contributed to the decline in the company's quarterly results.
Despite the decrease in net profit, Shinsegae reported a slight increase in sales, rising by 3.8 percent to 1.66 trillion won from 1.6 trillion won in the previous year. However, the operating profit saw a decline of 18.8 percent, falling to 132.3 billion won in the first quarter from 163 billion won a year earlier.