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SEOUL, Aug. 9 (Yonhap) — Shinsegae Inc. reported Wednesday that its second-quarter net profit had decreased 4.3 percent year-on-year due to high inflation and a slump in consumer spending.
The South Korean retail giant revealed in a regulatory filing that its net profit for the three months ending in June was 78.7 billion won (US$59.7 million), down from 82.2 billion won during the same period of last year.
Operating profit for the April-June period was 149.6 billion won, a decrease of 20.2 percent from the previous year, while sales dropped 16 percent to 1.57 trillion won.
Shinsegae attributed the decrease to a rate hikes and the increased cost burden due to higher inflation, as well as a base effect following a record net profit in the second quarter of last year due to strong department store sales in the wake of eased virus restrictions.
The company’s flagship department store business saw its sales rise 0.8 percent to 628.4 billion won in the April-June period, marking growth for the 10th consecutive quarter. Shinsegae credited the increase to the renovation of its Gangnam branch in southern Seoul, as well as stronger online shopping.
However, the operating profit declined 23.9 percent due to higher management costs.
Shinsegae’s duty-free business saw its sales fall 40.3 percent year-on-year to 485.1 billion won, but its operating profit jumped 40.1 percent to 40.2 billion won. The company attributed the decrease in sales mainly to fewer transactions with Chinese merchants.