Foreign tourists drive Q1 earnings growth at department stores
2026.05.12 10:46
Lotte Shopping Co. announced in a regulatory filing on Monday that its first-quarter sales stood at 3.58 trillion won ($2.43 billion), up 3.6 percent from the same period a year earlier.
Operating profit for the period reached 252.9 billion won, up 70.6 percent, and net profit improved sharply to 143.9 billion won.
The department store division led the performance.
Operating profit in the department store business soared 47.1 percent on year to 191.2 billion won, while sales increased 8.2 percent to 872.3 billion won.
Both figures marked all-time highs for a first quarter.
Sales at major flagship locations, including the main branch, Jamsil branch, and Busan main branch, rose 19 percent, boosting overall performance. Profitability improved as domestic and international customers flocked to major stores due to pop-up events and large-scale renovations.
Foreign sales, in particular, surged 92 percent.
At Lotte Department Store’s main branch, foreign customer sales more than doubled from a year earlier, with the share of foreign customers climbing to 23 percent.
“Improved customer traffic at flagship stores, combined with a sharp increase in fashion product sales, drove department store revenue growth,” noted a Lotte Department Store official.
Earlier, Hyundai Department Store also posted record results fueled by sales to foreign tourists.
The store recorded first-quarter sales of 632.5 billion won, up 7.4 percent year on year, and operating profit of 135.8 billion won, up 39.7 percent.
Sales of fashion items, such as winter outerwear, and increased sales to foreign customers drove earnings growth.
At The Hyundai Seoul, the most popular Hyundai Department Store location among foreign visitors, first-quarter foreign sales surged 121 percent from a year earlier.
Hyundai Department Store said that the introduction of a wide range of experiential content spanning shopping, food, and beauty attracted tourist demand.
Shinsegae Department Store, which is scheduled to release its earnings on Tuesday, is also expected to post strong results.
According to financial information provider FnGuide, Shinsegae Inc. is projected to report first-quarter sales of 1.81 trillion won, up 8.5 percent on year, and operating profit of 168.2 billion won, up 27.1 percent.
The department store industry anticipates that strong growth will continue, as sales are expected to expand across all product categories, including foreign sales and high-margin fashion items.
According to the Korea Chamber of Commerce and Industry’s Retail Business Survey Index (RBSI) for the second quarter of 2026 based on a survey of 500 retail businesses, department stores were the only retail segment with a business outlook index above the benchmark level of 100.
While supermarkets and convenience stores fell below the benchmark due to high inflation and rising procurement costs stemming from the Middle East conflict, department stores improved from 112 in the first quarter to 115 in the second quarter.
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